E-Financial
Rethinking Agency Banking with New Innovations in Nigeria
Emmanuel Okoegwale
Few weeks ago, I attended a national financial services agency forum, organized by one of the leading industry players in Nigeria with very impressive attendance from agents, nationwide.
The venue was filled up with enthusiastic agents but with significantly eroded transactional abilities, due to operational challenges that is affecting their service delivery at the last mile and causing significant friction, with customers.
It was a complains galore for the agents as they churn out different negative experiences, disappointments linked to poor support arising from failed transactions, delayed and inadequate reconciliation processes, poor support from providers etc.
Agency banking is provisioning of basic financial services such as cash deposit, cash withdrawal, fund transfer, bills payment etc through third party agents within communities. They deploy their own resources like cash, outlets etc while the service provider, will provide items such as branding materials etc. Point of sale devices are provided by service providers and in some instances, paid for by the agents but recently, some providers are issuing them at no cost.
The agency network is the distribution network, front-end and customer facing entities which require significant resources to build, manage and cultivate.
Cost of building these networks can be significant for many operators if the overall strategy of the provider, is not well defined and it becomes more complex as they reach new geographies, requiring diverse implementation plans.
While the ultimate for service providers, is to unlock the customer value, by enabling them convert cash to electronic value and use the services themselves but the agent as the middle-Man, wants to keep the customers locked into over-the-counter transactions so that, they can continuously, earn fees.
The agent has no compelling reason to educate the customer to acquire and learn how to use the wallet. It’s a loss for the agent whereas the Banks are banking on this front-end partner to provide that education and conversion. There might be value for the agents if the providers can rethink their commissioning strategy that gives the agent some long-term value for converting customers to wallet users with consideration for residual commissions strategies etc.
Shared Agency
Shared agency is visible at the front-end but disaggregated at the back-end with locked-in, float accounts. At the front end, the POS will accept any Bank card issued in Nigeria seamlessly but at the back end, the agent may have multiple agency agreements, so the agent keeps multiple float accounts with multiple providers which fragments His total e-float inventory and its, inefficient. The agent may need to keep switching transaction devices, re-balancing different float accounts, frequently.
Agents are Working, Blindly
From the various complaints of the agents at the event, it was evident that the agents had not been well equipped aside the almighty Point of sale device which most providers think as the ultimate, in setting up, equipping and activating agents.
Operational issues had to be reported through telephone or email to back-office, transaction reconciliation issues must back with POS prints-out which might have faded, missing etc.
Delayed resolution period to resolve agent transaction issues, leading to customer dissatisfaction and sometimes intervention by security personnel and sometimes, loss of agent funds.
A well-equipped agent will save the provider significant time and resources by using digital and innovative tools provided by the provider to manage day -to-day operations in an innovative manner, that adds value to the entire value chain.
The Agent Dashboard
Agency dashboard provides actionable transaction data, which is used to manage customer transaction outcomes, identify and isolate issues which will then increase efficiency and performance of the agents.
The dashboard will enable agents to have simple, intuitive and secure interaction with all their transactions channels like POS, Mobile money transaction data etc via a single interface. It provides critical operational functional that will enable the agent to transact effectively and securely which will then improve the customer trust and overall experience.
Some customers will never sign up for wallets services because of trust issues, they need someone they can hold accountable when things do not work and that is the agent, who should be well equipped to address operational challenges, adequately.
Benefits
The dashboard reduces the agent’s support cost with agents having visibilities on some transaction data via their dashboard and increase uptime and performance.
Agents will be able to report suspicious transaction timely for flagging by the service providers thereby reducing losses, arising from fraud etc.
It will help the providers to reach agents in a timely and efficient manner if there is a ‘run’ on the system.
Agents can deliver improved services which reduces agent and customer friction and improves the customer experiences.
It’s a major win for agents to be able to work more effectively and efficiently in stressful, street-level “Ojuelegba” environments.
Conclusion
For agent banking to prosper in Nigeria, forward thinking and innovative providers, can deliver innovative directions that can empower the agent network with effective tools (front and bank-end) that can drive Nigeria’s match into the digital financial services era.
Dr. Emomotimi Agama, Director-General of the Securities and Exchange Commission (SEC) Nigeria, has said that West Africa is fast emerging as a global epicentre for virtual asset adoption, propelled by a young, tech-savvy population and macroeconomic instability.
Speaking at the West Africa Compliance Summit organised by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) in Praia, Cape Verde, Dr. Agama warned that while the region’s embrace of digital currencies is accelerating, the absence of coordinated regulation leaves it vulnerable to financial crimes and illicit capital flows.
“With over 60 percent of West Africa’s population under the age of 25 and mobile-first fintech platforms thriving, the region has become a global hotspot for virtual asset adoption,” he said. “But we must act decisively. Regulation is not optional, it is an imperative.”
The summit, themed “Adapting and Thriving in a Complex and Evolving Compliance Landscape,” brought together financial regulators, compliance professionals, and security experts to explore the challenges posed by the rapid rise of virtual assets and decentralised finance (DeFi).
Dr. Agama disclosed that crypto transactions in Nigeria alone surpassed $56 billion in 2024, with citizens increasingly turning to stablecoins such as USDT and USDC to hedge against volatile local currencies. He highlighted the growing trend of “crypto-dollarisation,” noting that young professionals now demand salaries in stablecoins, while businesses are adopting platforms like Binance Pay for cross-border transactions.
“The naira’s depreciation, Ghana’s cedi weakness, and persistent forex shortages have fueled this shift,” he explained. “Traditional remittance channels charge up to 10 percent in fees, while cryptocurrencies offer faster and cheaper alternatives. Over $20 billion in remittances flowed into West Africa last year through crypto channels.”
However, he also cautioned that the same innovations driving financial efficiency are increasingly being exploited by fraudsters and criminal actors. He cited GIABA’s report of $2.1 billion in suspicious crypto-related transactions across West Africa in 2024 alone, including the use of privacy coins by terror financiers to evade detection.
“Unregulated exchanges, artificial market crashes, DeFi ‘rug pulls,’ and Ponzi schemes have wiped out billions in investor funds,” he said. “The recent collapse of the CBEX Ponzi platform is just one of many such incidents. Strong regulation and regional coordination are the only path forward.”
Dr. Agama pointed to Nigeria’s recent legislative progress, especially the enactment of the Investment and Securities Act 2025, which formally classifies virtual assets—including cryptocurrencies, stablecoins, utility tokens, and NFTs—as securities under Section 355(4) and Part I of the Second Schedule.
“Under the new law, all exchanges, wallets, and DeFi platforms must be licensed by the SEC,” he stated. “We’ve also established a Fintech and Innovation Department to facilitate ongoing dialogue with industry stakeholders and adapt our regulations to emerging realities.”
He called on West African governments to harmonise regulatory frameworks and strengthen intelligence-sharing, proposing a Unified Virtual Asset Service Provider (VASP) Licensing System under the ECOWAS framework.
“A crypto trader banned in Nigeria should not find safe haven in Ghana,” he asserted. “Financial crime knows no borders. Our collective future depends on our ability to secure this emerging financial frontier.”
NOVA Bank has announced its intention of a strategic shift in its operating license from a national to a regional authorisation, a move, which according to the Bank is aimed at optimising operational efficiency and deepening its impact within key markets.
The management of the Bank noted that the repositioning aligns with the Bank’s long-term vision to consolidate its strengths, streamline its services, and deploy capital more effectively within targeted regions, without compromising its commitment to innovation, customer satisfaction, and sustainable growth.
To this effect, NOVA has applied to the CBN to recategorize its operating license from a National to a Regional Commercial Banking license.
According to the Bank, NOVA maintains a strong financial position, underpinned by robust capital adequacy, liquidity ratios, and a consistent growth trajectory.
NOVA’s Acting Managing Director/Chief Executive Officer, Mrs. Chinwe Iloghalu, explained that following the Central Bank of Nigeria’s (CBN) revised recapitalisation directive in March 2024, NOVA reviewed its growth trajectory and capital utilisation strategy.
“Given the Bank’s current stage of growth, we have chosen the prudent route to optimise what we need, grow efficiently, and scale sustainably. This is a major strategic positioning that will ensure continued efficiency in the deployment of assets and resources,” she said
Mrs. Iloghalu further stated “Indeed, our shareholders have shown strong commitment to ensuring full capitalisation through rights issue by injection of additional 24 billion before end of 2025 to exceed the prescribed capital for regional Banks well ahead of the 2026 CBN deadline”.
In a further affirmation of its strength and stability, Global Credit Rating (GCR) recently reaffirmed NOVA Bank’s BBB rating with a Stable Outlook, citing the Bank’s healthy liquidity profile, improving earnings, and sound asset quality.
The Bank’s audited 2024 financials validate the effectiveness of its growth strategy, recording over 200% year-on-year growth in profit before tax (PBT), alongside improvements across all key financial indicators.
NOVA is set to launch three new branches in the coming weeks, including Owerri, Port Harcourt, and Abuja, to enhance physical access and customer service, while strengthening its digital banking infrastructure to ensure customers continue to enjoy secure, seamless, and convenient banking experiences, anywhere, anytime.
The Chairman of the Board, Mr. Phillips Oduoza, noted that NOVA remains committed to its vision and is thankful for the continued trust of its customers, shareholders, and regulators.
“Every decision we make is deliberate and strategic, guided by sound governance and market insight. Transitioning to a regional license is a recalibration, giving us room to grow optimally, build capacity, and position ourselves for a full national rollout in the next 36 months.” Said Oduoza
West Africa is fast emerging as a global epicentre for virtual asset adoption, propelled by a young, tech-savvy population and macroeconomic instability, according to Dr. Emomotimi Agama, director-general, Securities and Exchange Commission (SEC) Nigeria.
Dr. Emomotimi Agama, DG, SEC
Speaking at the West Africa Compliance Summit organised by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) in Praia, Cape Verde, Dr. Agama warned that while the region’s embrace of digital currencies is accelerating, the absence of coordinated regulation leaves it vulnerable to financial crimes and illicit capital flows.
“With over 60 percent of West Africa’s population under the age of 25 and mobile-first fintech platforms thriving, the region has become a global hotspot for virtual asset adoption,” he said. “But we must act decisively. Regulation is not optional, it is an imperative.”
The summit, themed “Adapting and Thriving in a Complex and Evolving Compliance Landscape,” brought together financial regulators, compliance professionals, and security experts to explore the challenges posed by the rapid rise of virtual assets and decentralised finance (DeFi).
Dr. Agama disclosed that crypto transactions in Nigeria alone surpassed $56 billion in 2024, with citizens increasingly turning to stablecoins such as USDT and USDC to hedge against volatile local currencies.
He highlighted the growing trend of “crypto-dollarisation,” noting that young professionals now demand salaries in stablecoins, while businesses are adopting platforms like Binance Pay for cross-border transactions.
“The naira’s depreciation, Ghana’s cedi weakness, and persistent forex shortages have fueled this shift,” he explained.
“Traditional remittance channels charge up to 10 percent in fees, while cryptocurrencies offer faster and cheaper alternatives. Over $20 billion in remittances flowed into West Africa last year through crypto channels.”
However, he also cautioned that the same innovations driving financial efficiency are increasingly being exploited by fraudsters and criminal actors.
He cited GIABA’s report of $2.1 billion in suspicious crypto-related transactions across West Africa in 2024 alone, including the use of privacy coins by terror financiers to evade detection.
“Unregulated exchanges, artificial market crashes, DeFi ‘rug pulls,’ and Ponzi schemes have wiped out billions in investor funds,” he said. “The recent collapse of the CBEX Ponzi platform is just one of many such incidents. Strong regulation and regional coordination are the only path forward.”
Dr. Agama pointed to Nigeria’s recent legislative progress, especially the enactment of the Investment and Securities Act 2025, which formally classifies virtual assets—including cryptocurrencies, stablecoins, utility tokens, and NFTs—as securities under Section 355(4) and Part I of the Second Schedule.
“Under the new law, all exchanges, wallets, and DeFi platforms must be licensed by the SEC,” he stated.
“We’ve also established a Fintech and Innovation Department to facilitate ongoing dialogue with industry stakeholders and adapt our regulations to emerging realities.”
He called on West African governments to harmonise regulatory frameworks and strengthen intelligence-sharing, proposing a Unified Virtual Asset Service Provider (VASP) Licensing System under the ECOWAS framework.
“A crypto trader banned in Nigeria should not find safe haven in Ghana,” he asserted.
“Financial crime knows no borders. Our collective future depends on our ability to secure this emerging financial frontier.”
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