With digital banking market set to cross the $9 trillion mark by 2024, the Chartered Institute of Bankers of Nigeria (CIBN) has charged the financial sector to leverage digital banking to remain competitive or struggle for survival in the changing banking terrain.
Indeed, the Institute pointed out that the Central Bank of Nigeria’s (CBN’s) National Financial Inclusion Strategy which aims to significantly increase financial inclusion rates from 58.4 per cent recorded in 2016 to 80 per cent in 2020, would be hindered by banks who chose to operate under the current banking model, while banks who choose to stay ahead of the curve can leverage digital banking to further facilitate the efforts of the Apex bank.
The president and Chairman of Council, CIBN, Uche Olowu, at the 2019 CIBN Lagos State Branch, Bankers and Stakeholders Night in Lagos, said in view of these developments, banks who wish to survive would need to rethink their business models in order to stay relevant.
He stated that the benefits of this pro-activity are significant not only for survival in the changing banking terrain but for economic growth and development as well.
He said in rethinking their banking models, the banking industry should consider further adoption of technological advancements such as Robotics and Artificial Intelligence, Machine Learning and collaboration with Fintech Firms in increasing coverage and access points.
He advised that banks must remember the core services and consider more innovative ways to offer such services outside of the traditional avenues
He reaffirmed the Institute’s commitment towards building the capacity of professionals and would be professionals in the banking industry.
Also speaking at the event, the president, Fintech Association of Nigeria President, Dr. Segun Aina, predicted that due to cyber crimes he identified as the biggest threat to all banks in the digital age might lead to another global financial crisis.
Aina who also doubles as the, Chairman, Global Banking Education Standards Board, warned that most regulators and operators might not be prepared for the financial downturn.
He stressed that governments of different countries might also not be able to provide bailouts to banks like they did previously in 2008.
According to him, banks’ losses to fraud in Nigeria jumped to N15.15bn in 2018, an increase of 539 per cent compared to N2.37bn in 2017, maintaining that internet & technology based sources of fraud accounted for 59 per cent of fraud cases and 43 per cent of actual loss.
“According to NDIC, cybercrime will cost the world $6 trillion annually by 2021, which he said rose upward from $3 trillion in 2015. Global spending on security awareness training for employees is predicted to reach $10 billion by 2027, up from around $1 billion in 2014. Training employees how to recognize and defend against cyber attacks is the most under spent sector of the cybersecurity industry.”
He noted that the UN e-Government Survey 2018 showed Denmark coming first place while Nigeria ranked 143 out of the193 member countries surveyed.
He said Nigeria requires an integrated all inclusive (private-public) approach to fast track implementation of the Digital Government Initiatives & Programs to be able to harness the potential of the digital revolution.
“The practice and business of banking have been totally transformed in the last two decades as a result of adoption of digital to meet the unique needs of customers and the public; comprised of a large population of youths and young adults. In today’s environment, embracing digital is no longer something good to do – It’s a mandate for survival. Banks must take actions today to guarantee survival & competitiveness tomorrow,” he said.