Digital Channels Now Account for 70% Financial Inflow to Banks- UBA

Digital channels are changing the face of banking with about 70% of deposits that come to the banks now done through such compared to 30% that comes through bank branches such as cheques and cash.

The outflow, which is actually payments by individuals, is now over 80% in terms of transaction counts, as bank customers no long lump their transactions any more, said Dr. Yinka Adedeji, head, Consumer and Digital Banking Division at the United Bank of Africa (UBA) Plc., while briefing ICT journalists on UBA’s preparedness in the face of changes in the digital banking on the Continent.

Dr. Adedeji said that there has been an unusual growth and adoption of mobile banking in the Nigeria, especially with convenient at top of the Bank’s innovations in the sector. 

He added that UBA has deployed State-of-the-art technology to drive the next phase of banking services, while the consumer and digital banking divisions have now closed rank to serve the customers better.

He said that the structural changes and reorganisation by UBA was in anticipation and alignment with changes in the financial industry in Nigeria and the Continent at large.

Dr. Adedeji said, “Since the last time we met, the Central Bank of Nigeria (CBN) has removed the penalty associated with digital payments and collections. Initially you would have thought the reason why people are using digital payment channels or cashless system is because of the penalty. Interestingly, the adoption continues and even growing faster. This implies that the adoption goes beyond penalty and hinges on convenience of banking and the security; so, it s right time for electronic or cashless payment in the society.

“We have seen rapid changes so much that about 70% of deposits that come to the banks are done through digital channels such instant transfers (either by mobile, internet), card transfers (using transfer kiosks, ATMs); compared to 30% that comes through bank branches (cheques and cash).

“The outflow, which is actually payments by individuals, is now over 80% in terms of transaction counts, because what you see is people do not lump their transactions any more. Even though the average you see of a transaction is becoming smaller because individuals are breaking up their transactions, knowing they can actually do it 24/7. These are new developments and are very positive. These also have to shape the way banking is done. You will see there will be less emphasis on building on bricks and mortars. It is not just in Nigeria, but across the globe. It also dictates how we do our business across Africa. What is also important to us is the back-end technology behind the transactions. We all have ‘one’ phone but if you imagine the infrastructure behind the scene to support the transaction on your phone it is massive. So the banks are really focusing on setting up a lot of IT infrastructure; the electronic payment infrastructure, security (monitoring and protection of customers). UBA has deployed state-of-the-art security apparatus at the headquarters too and a benchmark for the industry.

“Speaking on UBA’s approach to the market, he said, “We know there are a lot of electronic channels for payment and collections, but everything is now bounded that you have customers account with you. So, the structure and organisation in UBA has transformed in anticipation and changes we have seen in the industry. Before, consumer banking used to be separate unit likewise digital banking, but you will agree with me there is no digital channel/banking without consumer. People have to open accounts with you first; you know about them, before you can give them convenience.

“Therefore, the bank wants to change the strategy from ‘you open an account and we give you convenience’ to ‘people coming to the bank to open an account because there is a convenience that come with it. In other words, before now opening accounts takes the lead before convenience, but we want convenience to be the reason for banking with us. So, the consumer and digital banking units have teamed up to form a division. It is very strategic to us. Which means the account openings, account types, how accounts are opened settles with the division. Even the methods of remittances have changed as we have combined them under same umbrella.

“In addition, collections are now part of the same division. This is apt because collections are going beyond the manual ways. Collections here imply payment of taxes, utilities (such as DStv subscription, electricity bills, etc); it is now beyond paying cash at a particular branch. There is multi-bank when you enter a particular banking hall; that is becoming very digital too. The collections of fees like energy payment to Discos now happen through Point of Sales (PoS); airline tickets, data subscriptions, airtime purchases, these have made banking very interesting. We are making these payments possible in reliable, safe and simple means”.

The Head, Consumer and Digital Banking Division at the United Bank of Africa (UBA) Plc, added that the management are carefully studying all the directions that the CBN is trying to push. “We are aligning with all the regulators in all the countries we operate in, making account opening and financial services very simple through creation of capacities and partnerships with people that are deeper in grassroot banking viz-a-viz agency banking”.