Journalism in the service of society

How the banks are failing Nigerians

‘Our banks need to think outside the box and invest heavily in their IT infrastructure to be able to compete globally. Nigerians have been very kind to these fair-weather friend banks and it is time, the banks reciprocated this kindness to Nigerians by improving their service offerings’

SINCE the first bank formally opened its first shop here in Nigeria in 1894, Nigeria and Nigerians have been good to the banking industry. In contrast, at least in recent years, the banks cannot be said to have been good to Nigeria and Nigerians.  Wherever one looks in this great nation of ours, there is, quite depressingly, an abundance of human misery. The four dreaded evils of disease, squalor, want and ignorance are mercilessly ravaging our societies and the banks are unfortunately, deepening this sordid state of our existence. How? Many would like to ask!

Principally, banks, whether brick-and-mortar institutions or online, manage the flow of money between people and businesses. Traditionally, banks offer deposit accounts that are secure places for people to keep their money. Banks use the money in deposit accounts to make loans to other people or businesses.  Nigerian banks, like the rest of everything Nigerian are very mediocre in their service delivery and management. Since we worship mediocrity in Nigeria, for the shabby and frustratingly poor services we receive from them, we still celebrate them.  They sincerely have not been adding values to the lives of ordinary Nigerians and are in fact guilty of compounding their problems.

There is very little or no investment in modern technology to improve their services.  I will just use a couple of anecdotal evidence to explain what I mean. I was asked by my steward to transfer N20k to his account when he was in Utako market in Abuja to get me some foodstuff.  After about almost an hour, the money still hadn’t been credited to his account.  So I had to send another 20k, this time, through a different bank and this he got immediately.  Six weeks later, he still hadn’t got the money and neither was it reversed back into my account. I had to go into my bank branch to get a printout of the transaction to prove that it had left my bank and the problem was at his receiving bank.  It took him half a day to gain access to his bank to resolve the matter with the assurance that the money would be in his account within the next five days.

This is totally unacceptable! In a country where the minimum wage is N30k, what if that was all I had. This happens every time and poor Nigerians are forced to queue up for hours at the Customer service sections of these banks to resolve issues that shouldn’t have been there in the first place.  For those who have been used to seamless banking operations in other climes, it can be frustrating. For most Nigerians who have not experienced anything better and have nothing to compare the shoddy services they are receiving with, they probably think that is normal.  A couple of years ago in Kaduna and just a day to Salah, my friend tried to take some cash from the ATM within the premises of his bank (name withheld as they are all guilty). To his consternation, he got the debit alert on his phone and his account had been debited whilst the machine neither dispensed any cash nor release his card.  He tried unsuccessfully to retrieve his card and ended up in the banking hall just about an hour to closing time. He found a few people there making the same complaint to the Customer Service Manager whose only answer was that they should come back after Salah for their cards and that the funds would be reversed to their accounts within five working days.

These are people who had attempted to withdraw N2k and the maximum amount was N5k. To most of them, those were the only monies they had in their accounts to get their families to do something for Salah. My friend was moved with compassion and instead of the N50k he had wanted to withdraw, he gave all nine of them his account details and he withdrew the extra N32k which was the combined amount they all wanted to withdraw and distributed it to them. About a week after Salah, all nine of them had paid back the funds into his account and they all sent him thank you messages.  He wasted valuable time to go to the bank to collect his card.  Meanwhile, the cash that the machine failed to dispense were not refunded until three days after Salah.

It is therefore on the back of these prevalent, horrible experiences that one finds the recent cashless policy of the CBN rather ill-timed and disingenuous. The indescribable sufferings that our people were subjected to by the apex bank’s new notes policy is unpardonable as they were avoidable. At the best times when data traffic on our broadbands are pretty light, it was almost impossible to pay for petrol at filling stations without the petrol attendants having to take the POS machines to different locations, raised above their heads, searching for strong internet signals as if searching for some tagged animals on safari.  With the volume of processing expected to be happening at the same time because of this thoughtless policy implementation, one can only imagine how slow and almost impossible it would be to have any transaction completed online. 

The banks should have been encouraged to invest heavily in improving their IT infrastructure in the first place as you cannot put the cart before the horse. They operate in a competitive global environment where labour mobility is quite fluid and their ICT talents would naturally be drawn to those organisations and countries where their talents are recognised and adequately rewarded. The banks are losing most of their best tech experts in droves to competitors from other climes and they seem too slow to react to this.  This is despite the fact that they have been helped by some unwholesome charges and levies they apply to their customers’ accounts. You get charged for depositing your money in your account! You get charged for withdrawing cash (quite understandably)! You get charged for online transfers – incoming or outgoing! Monthly account management charges and other levies are applied to our accounts that we don’t even bother to check.

Our banks are so painfully innovatively languorous to the point that majority of them are not better than the “alájo” of old. A large majority of them have not improved on their processes and ways of doing banking from those early days. I was bemused some four years ago just before Covid when I was asked by my Account Manager to apply for a Mastercard credit card. Curiously, I asked what the credit limit was and she said it was standard N80k. I smirked and asked what could I do with N80k. To make matters worse, she said I just had to make sure I have minimum N80k in the credit card account to enjoy the privilege of spending my money on a card! I sat her down and explained to her that what the bank was offering me, was not a credit card but a debit card. If I have to spend the money I already have, that is not a credit. She begged me to please still apply for it and to cancel it after the end of the month as she needed to meet her target. That is not banking! I showed her my UK credit card and my statement with a limit of £13k and that it was unsecured and I explained how it works.

The banks have a major role to play in the creation of wealth and in the economic revivification of our ailing economy. For starters, the banks should corporately invest as an institution in a robust credit referencing firm, on whose records/data they can all rely for credit offers/scores. At the moment, the banks will ask for the CofO of the land on which your grand father was buried before you could access a loan of N2m to expand your business. That shouldn’t be so. Without credit and broad access to it, it is almost impossible to grow an economy and you cannot finance long term projects with short term borrowings. Our banks need to think outside the box and invest heavily in their IT infrastructure to be able to compete globally. Nigerians have been very kind to these fair-weather friend banks and it is time, the banks reciprocated this kindness to Nigerians by improving their service offerings.

*Olukiran writes from London; can be reached at [email protected])

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