The Importance of Digital Banking in Nigeria

Digital banking is the computerization of banking services to reduce risk, improve efficiency, and serve customers better. It is an online platform where banks/ financial firms deliver bank products and services. This could either be done through a website, an online banking app or a mobile banking application.

It is important to note that digital banking goes beyond just online banking. Online banking focuses on digitizing “core” aspects of banking, like remote deposits, transfers, and bill pay. However, digital banking goes beyond, digitizing all activities between financial institutions and customers. Online banking, also termed e-banking or virtual banking, differs from digital banking.

 

With the emergence of so many digital banks, digital banking is gradually becoming a familiar word is everyone’s vocabulary. Countries with developed economies have long adopted fintech in a bid to make everyday banking more accessible and now, Nigeria is joining the trend.

Following the establishment of Nigeria’s first traditional bank, the banking industry has encountered numerous challenges. These challenges span from poor asset quality and inadequate capital base to persistent distress, failures, and various other issues.

The traditional banking industry’s challenges are integral to recounting the history of digital banking in Nigeria. These challenges have spurred banks and individuals to introduce several banking technologies to the economy.

Since the inception of Nigeria’s first digital bank, banks have continuously introduced novel digital programs and products to retain customers inclined towards digital banking. The state of digital banking in Nigeria has improved significantly. Many banks have established an online presence, invested in technology, and developed digital banks from scratch.

The quest for better access to services, better prices, and higher privacy has made customers migrate to mobile banking. With the use of their mobile banking app, customers can easily carry out transactions from the comfort of their homes. Digital banks like Mint Digital Bank facilitate easy online account opening, eliminating the need for physical visits. Traditional banks have also found increased efficiency and profitability by embracing digital banking systems. The importance of digital banking in Nigeria simply can no longer be ignored.

The following points, explain the importance of digital banking in Nigeria

1. Improvement of banks’ customer service

The primary concern of many traditional banks has always been to deliver a quality and exceptional quality service. Not all banks have been able to achieve this due to a lack of proper communication between the bank and the customer. Customer service in the banking sector has significantly improved due to digital banking. Real-time support channels, such as live chat and co-browsing, have revolutionized query resolution. Digital banking has eliminated barriers, enabling effective communication between financial institutions and customers from the comfort of their homes. This has helped to foster trust and loyalty between the customer and the bank.

Digital banks have helped traditional banks save money on back-end office operational processes, physical infrastructure, and workers’ salaries

In a bid to be closer to their customers and reach out to everyone, banks have been creating so many branches. Digitalization has transformed accessibility to banking services, saving banks significant capital spent on multiple branches. Now, customers access banks without physical visits. This has reduced bank branch costs and provided accessible, personalized, and easy-to-use banking services to customers.

By introducing automation and shifting transactions online, banks cut costs and streamline operations, offering more value. Digitization slashes overheads and staff expenses, enabling reduced charges for customers. Some simple things such as swapping paper statements with e-statements can save time, money, and also the environment.

2. 24/7 Banking

Digital banking often means 24/7 banking and banking services that are available everywhere. This feature of digital banking has helped customers gain access to their accounts 24/7 and no longer need to stand in lengthy queues for the simplest of transactions. Digital banking via banking apps makes it convenient to bank anytime from anywhere, adding to the customer experience significantly. With just a click, this effortless and easy banking reduces stress and the security risk associated with carrying large amounts of money around.

 3. Financial Inclusion

Digital banking has made it possible for everyone to have available and equal opportunities to access appropriate, affordable, and timely financial products and services such as applying for loans. It has also made customers become managers of their accounts. They can go through their bank records without having to go to the bank to request a statement of account

In conclusion, the importance of digital banking in Nigeria is quite enormous as digitization is gradually taking over the financial institution. Hence banks must make investments in technology for a better future

Mint Digital Bank is a tech-startup in Nigeria, provided by Finex Microfinance bank. Finex microfinance bank is licensed by the central bank of Nigeria and all deposits are insured by the Nigerian Deposit Insurance Corporation (NDIC)

We offer our customers a better banking experience using the latest banking technologies. The digital platform promises no hidden charges, giving customers the power to decide exactly what kind of banking they need with no surprises or hidden charges.

Why Nigerian Consumers Should Choose Digital Banking

Banks in Nigeria continually restructure, but one certainty remains – digital banking has firmly established itself through recent  technological advancements introduced by banks.

Digital banks are banks that let you carry out all banking processes over the internet using your computer or a mobile device without having to visit a bank branch.

With the outburst of so many digital banks, consumers have been encouraged to choose digital banking. If you don’t own an account with a digital bank, you may be wondering why so many consumers use them and how they differ from traditional banks.

There are many similarities, but major differences have made digital banks attractive to web-savvy consumers. Identifying the main reasons why you should choose a digital bank can help you choose the right banking solution for your needs.

1. Absence of Additional Fees and Hidden Charges

One of the top reasons to use a digital bank is that you can own and access an account online as often as possible without incurring additional fees. Opening a digital bank account is entirely free, and upon account creation, you gain access to all privileges as long as you maintain the account with the bank. Most digital banks do not charge monthly maintenance fees for holding an account.

Many digital banks like Mint offer accounts services without any hidden charge to anyone—often no minimum operating balance

Most digital banks omit extra charges such as withdrawal and transaction fees, offering a seamless experience without needing a physical branch visit.

2. Higher Interest Rates on Savings

Digital banks are known for paying higher annual interest rates on savings accounts.

If you seek the highest interest rates, consider a digital bank like Mint, offering up to 8% interest on deposited funds.

 3. Digital Banking Saves Time

Consumers frequently visit banks for various reasons—complaints, deposits, bill payments, etc. Banking used to be time-consuming, but mobile banking, a part of digital banking, allows easy handling of banking services via an internet-ready mobile device. This helps you to maximize time during limited business hours. In case of complaints or difficulties, most banks offer customer service—via live chat, email, toll-free phone lines or social media channels

4. Digital Bank Accounts Could Be Accessed From Anywhere

The fact that digital bank accounts could be accessed from anywhere and at any time is another reason why you should consider digital banking. With your bank app, you can easily access your account information making banking possible while at work or odd hours. All you need to access your account is an internet access, your username and password.

5. Scheduling of Regular Payments

Digital banking has offered consumers the freedom to schedule regular payments such as rents, salaries, energy bills, and other fixed payments ahead of time using the mobile banking app. These payments are automatically deducted from your account when the time for payment comes up. Some digital banks send reminders days before payment, allowing you time to fund your account if there are insufficient funds. Payment of regular bills could be scheduled to be a recurring/one-time payment to payee.

Mint Digital Bank offers tech products that facilitate money transfers, bill payments, loan repayments, and more through a single app. Users can request money, top-up phones, fund virtual cards, and set up recurring payments conveniently.

With Mint payments, you can set up auto-debit or even reminders for bills that must not be missed. However you want it, it is all in your control to decide.

6. Latest Technology

If you are computer literate or you just love to keep up with the times, then you should consider digital banks as they generally lead the way in banking technology. Most digital banks offer certain tech-forward features before even the largest traditional banks. One of such features is mobile check deposit- This is a good way to fund online bank accounts without having to mail in deposits or pay visits to a bank.

Digital banks provide exclusive features. These include self-account management, annual budget preparation, and flexible goal-saving accounts. These are not readily accessible in other banking avenues.

8. Security

Are you searching for a secure way to carry out bank transactions? Then you should consider digital banking. When utilized with a reputable bank providing deposit insurance by the Nigerian Deposit Insurance Corporation (NDIC), consumers generally consider digital banking secure. However, staying vigilant against phishing scams is crucial. These scams involve copycat websites tricking users into divulging personal or bank details. It emphasizes the need to keep your system updated.

Digital banks are a convenient option for customers seeking affordable, higher interest accounts with advanced features. Overall, they’re a useful addition to the banking world.

Mint Digital Bank is a bank provided by Finex Microfinance bank. The Central Bank of Nigeria licenses Finex Microfinance Bank, which also ensures all deposits through the Nigerian Deposit Insurance Corporation (NDIC).

Mint Digital Bank which is the best bank to bank with works with an advanced tech team. The team is committed to safeguarding your privacy and ensuring top-notch security with Mint products. They keep your personal information confidential and tailor the best banking services for you.

While digital banking gains prevalence, consumers should prioritize online safety. This includes safeguarding personal data like PINs and passwords.