- Technology has empowered fintechs to be able to improve the banking experience for Nigerians
- This has made them more popular than their traditional commercial banks
- Here are five reasons fintechs appear to have edged commercial banks in Nigeria
If the valuation of Nigerian financial technological companies (otherwise known as fintechs) was put into consideration, then a shift has happened, as more Nigerians appear to trust fintechs more on a daily basis. A number of Nigerian fintechs have crossed a billion-dollar valuation while many are worth more than half a billion in the same currency.
These fintech startups, like Flutterwave, OPay, Paga, Kuda, Palmpay, Moniepoint, Nomba and Piggyvest, among numerous others, are redefining banking through their innovation and technology, thereby outsmarting their traditional counterparts.
A shift from the traditional banks to the fintechs seemed inevitable, considering the significant patronage fintechs enjoy from people in Nigeria and beyond.
They employ various strategies to meet their customers’ needs by leveraging technology, and this has tilted the scales in their favour, leaving the traditional commercial banks scrambling to catch up.
5 reasons fintechs edge out commercial banks
Here are five reasons they have an edge over traditional banks:
- Instant transfer
Customers of these fintechs enjoy the privilege of instant transfers, a quality that customers of some traditional banks do not enjoy. Many customers have complained of getting their money days or hours after a transfer is made.
- Cashbacks and awoofs
Some of these fintechs offer their customers cashback on each transaction they perform. Some offer their customers 3 per cent cashback on each airtime top-up, while others offer their customers 1.5 per cent on every airtime or bill payment. There are also those who reward customers with cashback on the first five bill payments they make in a month.
The cashback and discounts apply for the first five bill payments you make in a month and range from 15 points for your first airtime recharge of N100 to a 2% bonus when you pay for Cable TV and electricity. These points can then be exchanged for value-for-money items on the fintech’s exchange centre.
And in terms of bonuses, otherwise called awoof by Nigerians, fintechs know how to engage people. They sometimes enlist celebrities to help splash money while trying to win the patronage of bonanza seekers.
- Cheaper and fewer charges
Unlike traditional banks, which charge customers per transaction and for SMS at the end of the month, these fintechs have much cheaper and fewer charges, and some do not even charge at all.
- Occasional downtime
There have been cases where people complain of being stranded after eating at a restaurant and unable to make payment or transfer because of their bank’s poor network. This is not the case with these fintechs. They seem to have cracked the code to maintain their networks and avoid downtime.
- Easy access to quick loans
Customers of most traditional banks have to go through a rigorous process to obtain loans, but some of these fintechs offer very quick loans with customer-friendly interest rates.
Nevertheless, some traditional banks are now adopting the strategies of these fintechs by giving customers access to soft loans and offering more services like airtime and data top-up, cable and TV subscriptions, and electricity bill payments. Some traditional banks also have their own fintechs.