Banks face high costs of maintaining extensive branch networks while having their market share eroded by the ever-growing presence of payments solutions companies and mobile operators providing low-cost alternatives.
February 17, 2016 | Farrah BrakeWest Africa’s retail banking industry is growing at a rapid pace, with growing competition in the once under-served retail banking and SME spaces. Banks are now leveraging technology to serve what were once unprofitable market segments. However, non-traditional competitors have grown significantly, providing services traditionally exclusive to banks. These developments require banks to have strategic technology infrastructure in place coupled with strong risk practices to grow a sustainable retail banking businesses.
In line with Central Bank of Nigeria’s 2020 vision to develop and modernise the country’s payments system, Nigeria’s financial services industry has put greater emphasis on the neglected unbanked population through technology. Banks face the cost of maintaining extensive branch networks while having their market share encroached upon by the ever-growing presence of payments solutions companies and mobile operators providing low-cost alternatives.
Customer service key
The African continent has very high population growth rates, along with strong structural and economic growth and robust internet and mobile penetration. West Africa currently comprises 18 countries with a total population of over 250 million, more than half of whom are Nigerian. While the banking industry in Nigeria has a renewed focus on retail banking, especially in the last few years, it is not as yet a very profitable business. Banks still rely on their corporate clients for business. Despite the vast potential of the market, it is becoming increasingly costly to run retail banking in the region. The cost-to-income ratio for an established retail bank in developed markets can be about 30%. In Nigeria it ranges between 40% to over 60%.
Democratisation of the banking business means that the business is now defined by customers and the competition and not just the bank. The strongest competition in retail banking is coming not from ...
Categories:
Mobile Banking, Operational Risk Management, Retail Banking, Technology & OperationsKeywords:West Africa, Retail, SME, Central Bank Of Nigeria, Financial Services, Channels, Mobile Banking, Digitisation
Banks face high costs of maintaining extensive branch networks while having their market share eroded by the ever-growing presence of payments solutions companies and mobile operators providing low-cost alternatives.
February 17, 2016 | Farrah BrakeWest Africa’s retail banking industry is growing at a rapid pace, with growing competition in the once under-served retail banking and SME spaces. Banks are now leveraging technology to serve what were once unprofitable market segments. However, non-traditional competitors have grown significantly, providing services traditionally exclusive to banks. These developments require banks to have strategic technology infrastructure in place coupled with strong risk practices to grow a sustainable retail banking businesses.
In line with Central Bank of Nigeria’s 2020 vision to develop and modernise the country’s payments system, Nigeria’s financial services industry has put greater emphasis on the neglected unbanked population through technology. Banks face the cost of maintaining extensive branch networks while having their market share encroached upon by the ever-growing presence of payments solutions companies and mobile operators providing low-cost alternatives.
Customer service key
The African continent has very high population growth rates, along with strong structural and economic growth and robust internet and mobile penetration. West Africa currently comprises 18 countries with a total population of over 250 million, more than half of whom are Nigerian. While the banking industry in Nigeria has a renewed focus on retail banking, especially in the last few years, it is not as yet a very profitable business. Banks still rely on their corporate clients for business. Despite the vast potential of the market, it is becoming increasingly costly to run retail banking in the region. The cost-to-income ratio for an established retail bank in developed markets can be about 30%. In Nigeria it ranges between 40% to over 60%.
Democratisation of the banking business means that the business is now defined by customers and the competition and not just the bank. The strongest competition in retail banking is coming not from ...
Categories:
Mobile Banking, Operational Risk Management, Retail Banking, Technology & OperationsKeywords:West Africa, Retail, SME, Central Bank Of Nigeria, Financial Services, Channels, Mobile Banking, Digitisation
