Standard Chartered Plc, a British banking and financial services group, is said to have finalized plans to close at least half of its Nigerian branches as it transitions to digital banking.
This comes at a time when the Nigerian banking industry is facing stiff competition from payment service providers, particularly mobile telecommunications companies, which were recently granted operating licenses by the Central Bank of Nigeria (CBN).
According to Bloomberg, the Nigerian subsidiary of the London-listed bank already closed some of its offices in December and will eventually reduce its branches in the country to only 13 from approximately 25.
According to the report, some anonymous insiders said that as part of its new strategy, Standard Chartered Bank will strengthen its mobile banking services and hire agents to reach out to new customers and handle cash deposits and withdrawals across the country.
Standard Chartered Bank’s new focus reflects efforts by Nigerian banks to embrace digital banking amid a fintech boom that has put much of Africa at the forefront of the mobile money revolution.
Rather than opening more physical branches, Nigerian banks are reducing costs by establishing networks of authorized agents, or people within communities who sell their products and services.
Through high-volume low-value transactions in a secure technology driven environment, enhanced financial inclusion will also help increase access to deposit products and payment/remittance services for small businesses, low income households, and other financially excluded entities.
With a reported 250 companies in the system, Nigeria’s financial technology space has become a highly competitive subsector of the economy.
Financial technology is essentially an initiative aimed at providing financial services to consumers the technologies may include the internet, apps, mobile phones, and other technological devices, with these companies offering services such as money transfer, depositing a check with your mobile phone, applying for credit, and raising funds for business.