The Federal government through the apex bank in Nigeria, the Central Bank of Nigeria create monetary and financial framework with policies and regulations for effective adoption, promotion and management of digital financial services and enhancement of financial inclusiveness across nigeria market space. In this plan, digital banking services are effective managed and control to improve the banking services in Nigeria.
FINANCIAL SETBACKS AND CHALLENGES IN NIGERIAN BANKING SECTOR
These are factors that mitigates the banking services thereby affecting the economic development and growth in Nigeria. These problems includes:
LIMITED ACCESS TO BANKING SERVICES
Over 60% of Nigerians does not have access to the banking services in Nigeria. They does not have account with the banks or they did not use its financial services for their economic and commercial activities effectively which affects their business growth and development.
However, Those nigerians are uneducated and unlettered which means that they need aids to be able to write and read banking instruction and documents so unable to use the services, formal institution like banks offered during financial transactions and services. English language is Nigerian business language while majority of nigerian still cannot understood and use it effectively. Many Nigerians are in rural areas where banks and other banking infrastructures are not sufficiently located. They are found scantily in urban centres where it will cost huge transportation fee for simple banking services so make it very difficult for them to access banking services.
Poor road networks, lack of electricity and limited internet connectivity hinders the establishment of banks and its allied infrastructures all over the nation for their services to be used by Nigerians. Many Nigerians are poor, barely can feed and cater for their needs and that of their dependents. They lives below $1 USD daily so they perceives banking services as unaffordable due to account maintenance fee, transaction costs and minimum balance requirement for banking services in Nigeria. Many Nigerian does not have proper and legal identification documents that are needed to open and operate an account with the bank in Nigeria.
FIAT BASED ECONOMY
Nigerian market have been cash based economy for years where a significant percentage of financial transaction and services are conducted using physical cash rather than digital and electronic means. Nigerians relied on fiat currencies for daily transaction activities as they are uneducated and illiterate with digital financial services. They prefer the cash, Naira which is the local currency which drives the market dynamics and trend because it have a cultural value with them. They are accustomed with the fiat currencies for conducting business and trading.
Many Nigerian have myth about other kind of currencies apart from naria, their local currency so they dislike them which have affect their adoption rate, implementation and usage. They insist on cash and reject other forms of currencies strongly due to trust issues over electronically based currencies and transactions. Many Nigerians prefer to held their money at hand believing that their value is based on its tangibility.
FRAUD AND SECURITY
Recently, Violent crime and insecurities have increased within Nigerian shores which have hinder banking service and economic development in Nigeria. Killing, kidnapping, Armed robberies etc have happened around banks and its environs which challenged the banking service and heightened the fear toward using of banks for transaction of various kind.
With this factor, locality and functionality of banks and its infrastructures have seriously considered and its establishments are around secured area and mostly in the urban cities for tight security to ensure safer banking services and protection of lives of the bank officials and employee in the bank.
Fraud of various kinds are great concern and hindrance to the increasing banking services. Identity theft where personal and sensitive informations of the bank clients are stolen which facilitates unauthorized transactions and operation of fraudulent banking service. Dishonest banking officials and employee which have access with the sensitive clients' details and data often misuse their privileges for fraudulent activities.
THE POTENTIAL OF DIGITAL BANKING SERVICES OVER THE TRADITIONAL FINANCE PROBLEMS
FINANCIAL LITERACY CAMPAIGN
Top banks with governmental backing have launched educational campaign with technological advancement to enlighten the public on the benefit and proper usage of various fintech startups, electronically gadget required for digital banking services. With these knowledge and afaffordableadgets, many nigerians will perform banking services even from their homes thereby improved their accessibility and bring banks closer to them and the number of Nigerians engaging with banks and digital banking services will increase too. More economic growth and development will be witnessed in the Nigerian market space.
Radio programs, Talk shows, T.V shows, Seminars, Work show are strategically organized for promotion and creation of awareness which Nigerian have enjoyed for effective banking services recently. Implementation and empowerment projects are ongoing in Nigerian rural and villages for proper and legal documentation necessary for opening and operating of banking services and transactions.
Nigerians are intricately wise, clever and intelligent that can adopt the knowledge of digital transaction and cryptocurrencies easily. No wonder, many Nigerian youth are thriving on internet space and crypto world like Hive blockchain for effective transaction and usage. Governments can promote regulatory sandboxes and grants for fintech startups development, promotion and usage.
CONCLUSION
There are many financial woes and challenges encountered in our traditional financial institutions in Nigeria. These financial worries and problems limits economic development and financial prosperity of Nigerians. A solution have come with business transaction and services. In the recent years, Digital banking services have been growing with many banks and fintech companies and startups offers online and mobile banking services. These platforms allow nigerians to perform stress-less financial transactions and services like payment of bills, trading, accessibility of loan, account and portfoilo creation and management through their smartphones, computers and other electronic gadgets.