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Fintechs: Here Are Nigeria’s Top Next Generation Banks
The banking sector in Nigeria is quickly evolving with the spring up of next generation banks (Fintechs). This article aims to shed light on the difference between the old, the present and the millennials.
The first wave of banks in Nigeria, Union Bank (formerly called Barclays), First Bank, UBA Bank and Afribank had their activities serving individuals, small and medium-sized companies, as well as large corporations and organizations. These banks were commercial banks mainly profit-focused and gave little attention to individuals and personal banking.
They were more focused on providing services to medium and large businesses while providing wealth management services to high network individuals, families as well as providing banking services to state and federal institutions. It is also worth noting that these banks were created in the colonial era.
The competition in Nigeria’s banking sector intensified, partly due to regulatory imperatives of universal banking and also due to customer awareness of their rights. First wav banks were heavily focused on commodity and import-export trading.
The second wave of banks in Nigeria started in the 1980s with the growth development of indigenous banks. Ecobank was created to be the first West African owned and managed bank. FCMB, GTBank, Access Bank and Zenith Bank were also created by Nigerians and incorporated in the 1980s.
These banks were tailored to provide retail and investment-focused banking or what one would describe as ‘bank for the basis’, moving from cheque book to ATM-style of banking. This was particularly championed by GTBank and Zenith Bank.
They also introduced the use of technology at the backend and later introduced basic internet banking. They pride in a large number of bank branches to reach a wide range of customers. Their focus at this stage was to acquire market shares but neglected the user experience and added value.
Also, recent studies show that customers, especially the millennial have become increasingly demanding, as they require better user experience, value for money and instant service delivery. They want additional improvement of value from their chosen banks at better costs. Millennials want a seamless and efficient service delivery system that does not require queuing up in banking halls or in ATM service points. And this has resulted in the spring up of the next generation banking service providers- The fully digital banking services (Fintechs).
The digital banks in Nigeria include VoguePay Digital (VPD), Piggyvest, AlatbyWema, Opay, Carbon and Kuda. These financial service providers utilise technology and innovation to make the banking process seamless and better user experience for their customers.
Fintechs also offer less service charges compared to traditional banks because their system accommodates less operational costs, total automation of their systems compared to traditional banks. Digital banks offer quick service to individuals and businesses. Another interesting aspect of these providers is that some of them offer more services than the usual banking services. Let us take a look at some digital banks and their unique services.
1 VPD.money (aka VoguePay Digital): VPD.money digital banking service app is the best designed and most ambitious banking app in Nigeria. This is because of the numerous, flexible features which appeal to its wide range of users. It is also the first Nigerian digital banking app that aims to give it’s customers borderless capabilities. It enables users to request money in multiple currencies and open international bank accounts and so much more. For example, Nigerians in the diasporas can gain instant access to a Nigerian account (with an active BVN) while Nigerians who travel to the UK or US for instance, are able to generate UK or US accounts.
VPD.money rewards its users with discounts in the form of cashbacks when they pay for services using the app. VPD.money also encourages a savings culture as the cashback its users receive gets saved in their cash wallet. It also enables its users to keep track of their daily, weekly and monthly expenses by showing them exactly what and what they spend their money on.
2. Piggyvest: PiggyVest is the first online “Savings & Investment” app in West Africa.
It first launched as “Piggybank.ng” on the 7th of January 2016 as a savings-only platform. Then in April of 2019 Piggybank.ng rebranded to “PiggyVest” and then began to offer DIRECT investments opportunities to users in addition to savings.
PiggyVest helps its users achieve financial freedom by enabling them to save responsibly and invest on the go.
3. Alat by WEMA:
This is one of the first digital banks in Nigeria and from the name, is a product of WEMA bank.
ALAT was fully launched on May 2, 2017 by Wema Bank Plc with millenials and Gen Z as its target audience. The digital bank app is believed to allocate atm cards to its users within a week of signing up.
The bank also provides multiple savings options including savings goals, target savings and group savings.
4. Opera Pay (aka Opay) : The opay banking app is also a very popular digital banking app in Nigeria.
This app works together with your atm card as you get to top up your wallet, to carry out transactions. One of the best parts of using the Opay digital banks is the accessibility to a good number of other services on its platform. From food vendors down its cash lending service and down to even a web app that allows you to read the news. It also enables its users to pay for utility bills.
4. Carbon: Carbon formerly called Paylater was founded in 2016 with the mission to leverage technology to provide individuals with access to credit facilities. A fully digital consumer lending experience, available 24/7, where an individual can get borrowed funds into a person’s account in minutes.
As the suite of financial services offered in the app expanded from just loans and into payments, investments and personal finance management, the name ‘Paylater’ was changed to Carbon. Carbon represents the aspiration to go everywhere with their customers, to form an essential part of their existence and be versatile enough to change or innovate to fulfill their needs.
5. Kuda: Kuda is another digital bank that offers completely paperless banking services. It is a digital-only-retail bank and has received a banking license from the Central bank of Nigeria.
Kuda coffers its users, a simpler life and smarter spending. It takes about ten minutes to set up an account on the app and it has the features of utility bill payment, and zero sms charges on transfers.
Digitization of the banking sector has revolutionized the whole banking experience. You literally do not need to go to a bank to have an account, make international transactions or send money to anyone.
Today April 29th is a special day. It is the birthday anniversary of Otunba Dr. Mike Adenuga, Chairman of Globacom and Conoil PLC, amongst other flourishing companies who turn 71 years old. A special gift to Nigeria, Dr. Adenuga is a colossus. He is renowned for his business acumen.
When it is comes to business, he’s got the vision. He can see good fortune light years ahead while others are still pandering whether it is feasible. Dr. Adenuga is unafraid to venture where others fear to tread. Fondly called ‘The Bull’ for his fearless and zeal to take “No” for an answer, he’s got this Midas touch that is unparalleled.
Oil, Gas Transformations
He transformed the face of Nigerian oil, banking, and telecommunications industries. In 1991, when oil mining and production was controlled by foreign multinational oil companies, Dr. Adenuga’s indigenous oil company was the first to start drilling crude oil. Today, Conoil has metamorphosed into one of the largest African-owned oil conglomerates on the continent with footprints in the upstream, midstream and downstream of the oil and gas sector.
His forays into the bank industry are well documented where he brought a fresh energy and bespoke financial services with Devcom Merchant Bank and Equatorial Trust Bank (ETB) which later merged into Sterling Bank.
Changing Telecom Services Narrative
If there is anyone who has single-handed transformed Nigerian telecommunications industry, that person is no other than Dr. Adenuga. His tenacity to recover his Digital Mobile Licence (DML) which his company won in 2001 mobile auction but was illegally taken away from him, paid off in 2003 when his company Globacom won the Second National Operator (SNO) licence.
In September 2003, Globacom transformed the Nigerian telecoms market in particular and Africa in general being the first Global System for Mobile Communication (GSM) operator to launch operations with Per Second Billing, Multimedia Service (MMS), Mobile Internet, in additional to plethora of communications suites.
Glo crashed the price of Subscriber Identification Module (SIM) card, leaving other foreign mobile networks scratching their heads in the GSM wars that changed the face of telecom, bringing down the price of SIM Card from N50,000 down to N100 and later to One Naira (N1) only.
Millions of Nigerians became overnight owners of mobile phones lines courtesy of the competition engendered by Glo. Every major step Glo took from the day it commenced operation, other mobile competitors were jittery, helpless and followed the initiative in other to remain in the market.
After establishing the footprints of Glo in Nigeria, Dr. Mike Adenuga (Jr.), also took the telecom giant to Ghana and Benin Republic with mobile operating licences in those countries. Unsatisfied with the routing of calls from Africa countries to Europe then to Africa, he built Glo-1, the first submarine cable system that was solely financed by an individual. Today, Glo-1 links global telecom networks, data centres, banks and Interconnect houses.
Globacom unfazed has going a notch higher with Glo-2 ensuring that Nigerian cities, towns and villages and oil companies are connected to terrestrial fibres through its landing stations in Lagos and Niger Delta.
Digital Financial Services
Dr Adenuga, a man who can see opportunities from afar, has took the lead in procuring Super-Agent licence for Agency Banking and Mobile Money licence from the Central Bank of Nigeria (CBN) with the establishment of Glo Mobile Money and Money Master Payment Service Bank Limited, a Digital Bank delivering financial inclusion services to Nigerians especially in rural, semi-rural and urban areas thus connecting them to the formal sector.
Man flowing with Milk of Human Kindness
The humanitarian side of this famous Nigerian billionaire is incomparable. Although, coming from a middle-class family, Dr. Mike Adenuga’s (Jr.) academic sojourn in the United States of America and the everyday life lessons internalized from his parents, Chief Michael Agbolade Adenuga (Snr) and Madam Oyindamola Adenuga, shaped his worldview and brought out his humane side in the way he deals with people and businesses.
He has been a major supporter of sports, especially football (Nigerian national teams). He has massively sponsored the Confederation of African Football (CAF) Awards for many years. He was honoured the title of Pillar of Football in Africa for his strong support for African Football at both national and continental. He has quietly rendered support to many without seeking media attention.
Through him, Glo sponsors the annual Ojude Oba festival in Ijebuland and also the Ofala festival in Onitsha, Anambra amongst others, promoting Nigeria’s rich culture.
Humble Beginnings
A man of outstanding wisdom, Dr. Mike Adenuga (Jr.) was born Michael Adeniyi Agbolade Ishola Adenuga on April 29, 1953 at Ibadan, Oyo State. His father was a school teacher while his mother was an outstanding businesswoman.
Dr. Adenuga (Jr) is an alumnus of the famous Ibadan Grammar School, North Western State University, Alva Oklahoma; and Pace University, New York, both in the United States of America where he majored in business administration with emphasis in marketing. As a student in the USA, he supported himself with jobs as a taxi driver and security guard.
Dr. Mike Adenuga (Jr) is a visionary leader, an outstanding entrepreneur and and manager of people and resources. He is a man of uncommon intellect and wisdom have helped him overcome difficult times. Today, he sits atop a vast telecom, oil and gas (Conoil), banking and real estate investments.
As Dr. Mike Adenuga (Jr) clocks 71 years on Monday April 29th, 2024, SiliconNigeria.ng wishes him a marvelous birthday and many happy returns in good health in the service of the fatherland.
