94 million Nigerians are financially underserved, says KPMG

23 November 2017 Consultancy.africa

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. 

94 million Nigerians are financially underserved

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.

Market trends that are emerging in a post-digital African economy

15 April 2019 Consultancy.africa

The discourse is now moving to a post-digital world, where the differentiating factor among a sea of digitalised firms will become the capacity to deliver personalised services based on individual customer needs – among other things – according to a new report from global management consultancy Accenture.

Businesses in Africa have been navigating a period of rapid digitalisation recently. The continent is set to have as many as 1 billion internet connections over the next two years, which means that the population is set to be wired in. The business environment has been looking to capitalise on this digital market.

While the bigger firms have been quick to adopt digital technology within their operations, smaller businesses were initially weary due to the high costs involved in digital transformation. Nevertheless, a number of these firms are realising the value of digital integration, and Accenture is looking towards the next step.

As per a new report from the firm, most businesses are on their way to digitalisation, which is restoring a certain uniformity to the market. In this context, digitalisation is no longer the differentiating factor. Businesses must now focus on developing mechanisms for customer relationships, among other enhancements.

Market trends that are emerging in a post-digital African economy

The technology that will take centre stage in the new scenario includes distributed ledger technology, artificial intelligence, extended reality and quantum computing (DARQ). Such technologies allow firms to “reimagine entire industries”, as per the firm’s analysis, and nearly 90% of firms are already experimenting with such technology.

Another key trend that is emerging in the post-digital world is the need for cyber security. According to Accenture, cyber security is no longer an individual effort from companies, but must be a collaborative effort across all stakeholders in any given sector that has digitally integrated.

“Ecosystem-driven business connections increase companies’ exposure to risks. Leaders recognise that just as they collaborate with entire ecosystems to deliver best- in-class products, services, and experiences, security must join that e­ffort as well,” says the firm.

“Technology is creating a world of intensely customised and on demand experiences, and companies must reinvent their organisations to find and capture those opportunities as they come,” adds the firm, urging that meeting customer needs is now more about speed than about service.