WhatsApp banking: Path to financial inclusion in Nigeria?

The need to stay competitive and make financial servicing easily accessible to consumers has driven financial institutions across Africa such as United Bank for Africa, First Bank, Guaranty Trust Bank and Absa Bank in South Africa to leverage an ‘experienced’ partnership between WhatsApp and Clickatell- one of WhatsApp business solution providers.

“These banks with the intention to harness from the potential of over 1.5 billion WhatsApp users across the globe, may be one step closer to ending financial exclusion in Africa, especially Nigeria,” a person familiar with the development told business a.m..

Nigeria is yet to win the battle against financial exclusion as data from the Central Bank indicates that 42 percent of the country’s population has no access to any form of financial service, including access to savings, credit, pension and insurance.

The CBN hoped this figure will be down to 20 percent by year 2020 but recently disclosed that Nigeria is not on track to meet the target.

The WhatsApp potential

Although South Africa’s Absa has begun running the WhatsApp banking initiative with a record of over 100,000 users and 300,000 messages in one week of its launch, the Nigerian market potential could be much larger with WhatsApp users when it becomes fully available to consumers from September 1.

According to Google consumer barometer, Nigeria as at January 2018 is the topmost ranked country with the highest percentage (80%) of its population that believes new technologies offer more opportunities than risk.

UBA in its notice to customers explained that its chat banker, Leo will enable customers who are lovers of the app open new accounts, check their balances on the go and carry out basic banking services.

For First bank an understanding of their customer’s needs who are actively engaged on WhatsApp, necessitated the drive for a new way and opportunity to meet customers at their preferred touch points.

Additionally, GTBank explained that following the launch of its Whatsapp Business Solution, the bank would be leveraging the platform to bring financial services closer to customers. The bank however noted that request for basic banking services using the advised prompts will be treated instantly, depending on the Internet connection of the user.

The downsides

A 2018 report of global digital market show that when it comes to average mobile connection speed, Nigeria ranks in the bottom four with 10.5MBPS as its average speed of mobile internet connection as against top ranking Netherland with 54.2MBPS and global average of 24.1MBPS.

Also in comparison to the national population, Nigeria’s mobile connectivity is second to the last of countries surveyed at 84 percent, only better than Kenya who has 77 percent.

The mobile connection performance is below the worldwide average of 112 percent.

Interestingly in West Africa a total of 336 million mobile subscribers were recorded by the GSMA intelligence, showing that 89 percent of the region’s population have subscribed to one form of mobile subscription or the other however mobile social media use is still at a penetration stage of 10 percent.

With WhatsApp being topmost messenger app in Africa the odds are in favour of African businesses like the banks who are channelling solutions through the platform, but connectivity may be a major deterrent.

A survey of people aged 16-64 show that Nigeria is the 8th highest country who spends the most time on social media with an average of 3hrs every day and 5th highest ranked country of people who spend time accessing the internet via a mobile phone with over 5 hours spent.

These statistics can however be improved if diverse expansion strategy with the telecommunication players are created to bring better connectivity to lacking areas of the country.

Customers speak on WhatsApp banking

While the charges seem to be of major concern to users, incessant network downturn seems be a major damper on the WhatsApp banking initiative.

Winifred Agboola, owner of Winnie Cakes when asked about her opinion of the innovation said she did not know much about it yet. Upon explaining that WhatsApp banking will create an avenue where she could transact business, pay bills and engage like in a banking hall, the Ogun state food vendor said “I won’t go for it easily because of network palaver,” further expressing pessimism about the bank charges to be incurred from engaging in WhatsApp Banking.

“Everybody is looking for how to save time and energy in doing basic things, so if WhatsApp Banking will enable my mother in Nigeria to open a bank account where I can transact directly with her, she can pay her light, DSTV and other bills without the necessary physical help it’s a welcome solution,” a software specialist in Texas, America told business a.m.

According to Deji Olushola (PhD), a lecturer with one of the Nigerian universities “Some rural or uneducated urban city dwellers who don’t have access to other social media platforms like twitter, Instagram and Facebook, have embraced and are well acquainted with the use of Whatsapp due to its user friendly nature. They can access their banking needs with this innovation and this could lead to a reduction of the financial exclusion rate, much clamoured for by our financial institutions.

Olushola however cautioned on the same fear that arises with the use of USSD codes in carrying out banking transactions. What are the assurances that false or forced transactions will not be carried out via the platform, in cases of armed robbery? What are the safe-proof measures being considered by the banks to encourage users? He queried.

He also added that if the main aim for the innovative solution, which is to achieve increased speed for banking, is defeated, customer apathy will rise.

Assurance, Assurance

While there are pertinent issues ( such as connectivity, pricing, safety, speed of delivery) to tackle for WhatsApp Banking in Nigeria to end up as a major breakthrough the pioneer banks of the solution have avowed nothing but customer love buoyed by their passion for excellent service delivery, in separate statements made available to business a.m.

Kennedy Uzoka UBA’s GMD said: “Our customers are at the heart of our business and we as a bank, are never relenting in matching our words with equal action. In today’s fast paced world with demands for quick responses, our aim is to make banking seamless and effortless for our millions of existing and potential customers.”

Reiterating, Austine Abolusoro group head of UBA’s online banking noted that “It is a solution that is from the customer’s standpoint, easy to use by anyone regardless of your demography. Leo is ready and waiting to help with any form of banking services.’

For Chuma Ezirim, group head, e-Business, First Bank of Nigeria Limited, “Customers’ expectations are constantly changing and it’s our duty as a customer-focused bank to ensure that our customers are provided with the means to carry out banking services through any channel they desire.”

Segun Agbaje, GTBank’s MD and CEO says, “We are passionate about driving constant interaction with our customers to learn more about how we can serve them better as well as to provide them with the financial solutions that can add real value to their lives.

By leveraging the WhatsApp business solution, we are continuing to expand our service channels as part of our commitment to making banking, cheaper, faster and readily accessible to customers wherever and whenever they choose to bank.”

Making all of this possible is Clickatell, a leading company in global mobile messaging services, enabling businesses to connect with their customers, the company also confirms First Bank, UBA, GTBank and Absa as part of their clients who make up the company’s success stories.