Nigerian banks urged to innovate to compete with fintechs

The Association of Corporate Affairs Managers of Banks (ACAMB) has stressed the importance for conventional financial establishments to embrace innovation and adjust within a shifting landscape. This adaptation is necessary to maintain relevance and effectively compete with fintech companies.

During the second National Stakeholder Conference of ACAMB’s 2023 edition held in Lagos, Mr. Rasheed Bolarinwa, the President of ACAMB, provided this counsel. Speaking under the theme “Marketing Financial Services in Dynamic Times,” Bolarinwa highlighted that fintech firms have been reshaping the financial sector through technological advancements, presenting a challenge to traditional banks.

According to him, traditional banks will have to keep up with the latest innovations to succeed in the current ecosystem.  

A wakeup call 

While noting that the theme underscores the dynamism of the times we live in and the impact on the financial services industry, Bolarinwa said:  

• “As good news as this seems to be, for us as financial services providers, the rate at which fintechs and neo-banks have, and continue to transform the finance industry, is a wake-up call for the traditional financial institutions to keep up with the latest innovations in order to succeed and thrive. Part of the imperative of these dynamic times is the demand on us in the industry to embrace innovation, adaptation, and agility if we must remain relevant in today’s marketplace.’’ 

He noted that among the key indicators of these dynamic times were macroeconomic headwinds that redefine the financial market as well as other markets across the board.

He added that rising inflationary trends, purchasing power parity, and supply shocks occasioned by foreign exchange scarcity had a significant impact on production and the ability of people to save money and invest. 

Other disruptive factors 

According to him, digitalisation was also a major trend that was rapidly disrupting the general ecosystem including the financial services sector.

Bolarinwa added that consumer behaviour was being altered as the mode of buying and selling shifted from the brick-and-mortar traditional mode to online purchases while fostering the increasing adoption of digital payment systems. 

According to him, it is not just that demand for safer, faster, and cost-efficient services is also getting higher as consumers become more sophisticated while competition also gets fiercer by the day. 

Customer trust 

Also speaking at the conference, the Lead Partner, CMC Connect LLP, Mr Yomi Badejo-Okunsanya, urged financial institutions to rebuild customer trust by finding new ways to meet their needs. 

According to him, a study by PricewaterhouseCoopers Ltd. reveals that only 39 per cent of Nigerians trust their banks in contrast to the global average of 56 per cent.

He said, “This lack of trust impedes financial inclusion and digital service adaptation. 

• “When you are promoting your product, you make it look easy in the promotion but when I get there you make it very difficult. In those days when you wanted to sell financial products, you just put a couple of pretty girls in a sweet-looking car, and sometimes, the higher their skirt line, the better; but you cannot do that anymore. 
• “A customer has become so aware; the issues of corporate governance do not allow that anymore also how many banks were there in those days compared to how many they are now? So, competition is key,’’ he said. 

Okunsanya urged the banks to know their customers and market, adding that the era of mass marketing was gone. He also advised financial institutions and other industries to create a strong and active research and development unit in order to succeed. 

He added that innovation and the digital revolution were one of the most significant effects of the digital revolution in finance urging banks to democratise financial services, among others.