Brazil94 million Nigerians are financially underserved, says KPMG
According to KPMG’s Nigerian outfit, the country’s vast and increasingly tech savvy population is suffering from a lack of options with respect to technological solutions, particularly in the FinTech arena. Numerically, this problem plagues 98% of the country’s financially eligible population.
Nigeria is one of Africa’s fastest developing countries, and is currently the country with the highest GDP on the continent. As of 2016, the country also recorded the highest population in Africa, at approximately 186 million people. What is promising for the country in an economic sense is the fact that one third of this population is currently under the age of 24, which is contributing to an expanding middle class across the country.
The population of Nigeria has, according to global Big Four professional services firm KPMG, also been phenomenally quick to embrace the digital arena. Currently, the country has over 148 million mobile telephone subscribers, which represents nearly 80% of the population. Of these, 92 million or nearly 50% of the population use their devices to access the internet on a regular basis.
The usage of new technology spans a number of usual areas, primarily social media platforms such as Facebook, Twitter, LinkedIN, etc. to connect with friends or professional contacts. However, one area into which technology is yet to permeate is that of banking and other financial transactions.
Currently, Nigeria’s financially eligible adult population stands at 96 million. According to a survey from KPMG, 77% of these people are active on the internet for social media purposes, demonstrating relative digital majority. This combination of digital maturity and financial eligibility represents the ideal opportunity for a booming FinTech market.
However, according to the survey, only 42% of the banking customers in Nigeria use online platforms for one or more banking functions. Moreover, only 40% of the population had interacted with their bank using social media in the past. In essence, a majority of the population is currently missing out on the speed, accessibility, as well as the efficiency that web-based banking platforms have to offer.
Neither side is lacking in any respect according to the report. Financial institutions have invested substantial amounts in making their services available online, while the people are increasingly tech savvy. The problem lies in awareness or conversion. Over two-thirds of Nigerian banking customers said that they had never even considered using their bank’s online platform.
The barriers to using banking platforms cited in the survey included difficulty of signing up, difficulty of usage, and most importantly the ever-increasing global cyber-security risk. As mentioned by one customer, “I do not trust the system, I’d rather go to the bank for the money to be transferred by the bank’s staff than do it myself as I would get the blame should anything go wrong.”
Solutions
The accounting and consulting firm believes that these problems can be solved through a number of comprehensive efforts from banking institutions. Firstly, the firm recommends a quick and easy revamping of online platforms to make them as user-friendly as possible, primarily by reducing the number of steps, improving visual design, and simplifying navigation. The firm advises banks to use their own employees to evaluate the user experience, encouraging them to use online platforms and provide feedback.
In the security realm, the firm recommends spreading awareness about all the measures that banks have taken to ensure the protection of customer finances. In addition, an improvement of the fraud-redressing systems would go a long way in building faith, as a number of customers have expressed dissatisfaction with inaction on their fraud reports.
Lastly, the firm recommends providing 24/7 helplines online, as well as reducing the cost of online platforms, as quick fixes to the problem.
