Encomium
-banks splash N400 billion in acquiring ATMs
A new report has found that bank customers in Nigeria are the heaviest users of Automated Teller Machines (ATM) in the world. The study by EY, a global business and financial advisory firm, also showed that Nigerians have the highest sensitivity in Africa and the second highest globally to close accounts based on poor experience.
The EY’s 2014 Global Consumer Banking Report surveyed over 32,000 bank customers in 43 countries, including Nigeria, Kenya and South Africa.
The study also found that Nigerian bank customers are among those from the top three countries that use social media when making decisions on selecting a financial service provider.
After a number of years of sharp decline, confidence in the banking industry is on the rise, trust in individual banks is high and most customers across the globe are satisfied enough to recommend their main banking provider, according to the report of the survey.
Banks are providing traditional banking services well but are viewed as falling short on important aspects of the customer experience, and are also increasingly vulnerable to competition from new providers of banking services, the report stated. The survey found customer experience to be a main driver of trust, and customer experience is also the single most common reason that customers open and close accounts, adding that it is more important than fees, rates, locations, press coverage or convenience.
The report read in part, “52 per cent of customers globally have opened or closed at least one product in the past year and 40 per cent plan to in the coming year. In South Africa, 44 per cent of clients surveyed said they intend to open or close an account in the next year. This is higher than the average for the African countries surveyed (34 per cent) and the global average of 40 per cent.
“Experience with a service provider is not only a key driver of trust; globally, it is also the single most common reason for opening and closing accounts.”
On the country, the report states, “Nigerian bank customers have the highest level of trust for primary financial service providers in Africa and second globally behind India.
“24 per cent of Nigerian customers have experienced a problem with their banks that required resolution. 72 per cent of customers were either very satisfied or satisfied with the response that they received. However, 28 per cent were less than satisfied.”
EY’s Advisory Banking Sector Leader for Africa, Mr. Colin Daley, said in a statement, “Despite another challenging year for banks globally, confidence in the banking industry among African customers has experienced a significant increase, most notably in Kenya and Nigeria, with South Africa tracking the global trend.”
ENCOMIUM Weekly check revealed that the nation’s banks have so far invested a whopping N400 billion in the acquisition of Automated Teller Machines (ATMs) deployed across the country.
A recent report revealed that there are about 13,000 active ATMs performing transactions across the country at bank branches, hotels and airports. It was gathered that the cost of ATMs is determined by their functionalities which include mono-functional, cashless and multi-functional ATMs.
A mono-functional ATM is the type mostly deployed by banks in the country which dispenses cash as well as carrying out other transactions such as payment of utility bills and cost $20,000 (N3.2 million). This type of ATM is the one mostly deployed by banks in the country.
Multi-functional ATMs whose cost is between $50,000 (N8 million) and $100, 000 (N16 million) are those that, aside dispensing cash, also accept cash deposit as well as cheque. There are few of this type deployed in the country.
Cashless ATMs, as the name implies, does not accept or dispense cash but rather carry out electronic payment transactions only and it costs some $3,000 (N480,000).
The two major brands of ATMs deployed by the banks are NCR and Wincor Nixdorf.
President and Chief Executive Officer (CEO) of the firm, Eckard Heidloff, who spoke in Lagos during the formal opening of its representative office in the country, said Nigeria holds huge growth prospect on the continent, adding that her population of over 165 million and vast human and material resources make the country the leader of the continent. He said the growing banking sector presents vast interest in new technologies for the country.
There is no contesting the fact that the introduction of Automated Teller Machine (ATM) has changed the face of electronic payment in Nigerian banks. Banks in the country are now adopting self-service technology because it is cost effective in the long-run. In the past few years, banks and the financial services industry, in particular have embraced the concept of e-money. Changes are beginning to take place in the Nigerian financial landscape and customers are increasingly raising the hope of expectations of quality customer services.
ATM was introduced into the banking system to solve the problem associated with late night or off banking withdrawal of money. In other words, it was introduced to serve the people where there are no tellers (bank officials) either due to closure or over the weekend when there is limited working hours.
It could only be natural, therefore, that the whole world, including Nigeria would embrace this innovation aimed at making banking easier and faster. The banking industry grew due to the mechanical device because of the desire of bank customers to do banking transaction at the speed of lightning.
The various facilities provided by the ATM are cash withdrawals, cash deposits, balance inquiry, request for statement of accounts, change of Personal Identification Number (PIN), cheque book requests, transfer of funds from one account to the other and other services like bill payment.
Also, ATM provides 24 hours services. A customer can withdraw cash up to a certain limit anytime of the day or night and need not wait to be attended to by bank staff or be affected by the instability of the banking system.
The technology promotes faster service delivery. It is a common phenomenon in Nigerian banking institution to see queues inside the banking hall, struggling and at times, quarreling for their turns to make withdrawals and deposits. This situation has promoted the common trend of bank robbery because of the raw cash lying bare in the banking hall. Today, the story has changed. Nigerians now engage in faster service delivery in withdrawal of cash.
ATM gives convenience to bank customers.
However, in line with the Nigerian system or any innovation, various customer-unfriendly issues have been raised over the introduction of ATM in the banking industry. The complaints and cries of bank customers over the ills of the ATM cannot be overlooked anymore in light of its raging pains to customers.
The first issue that comes to the fore is the efficiency of the ATM in Nigeria. The machine has been notable for gross malfunctioning. This may partly be due to lack of in-depth technical knowledge of the handlers. For instance, it is common for the ATM to deduct money from one’s account without actual payment to the owner only to re-credit such account. There is also the “pick” failure which prevents the equipment from dispensing the correct amount of cash. Many banks in Nigeria today do not encourage its use as such because of the associated problems which may not allow account balance in some instance, although those who invented the ATM actually anticipated some problems with its introduction. However, the type of problem being encountered in Nigeria may differ entirely from the ones anticipated in a healthier society.
By far, the most disturbing problem is that of fraud by some unscrupulous Nigerians. As usual with some Nigerians, they have been devising various means of stealing money from the ATM’s. In actual fact, many have succeeded in robbing bank customers through the ATM while some were not that lucky as they were caught in the process and handed to law enforcement agents. Unfortunately, those activities of fraudsters are responsible for the management of different banks in the country deciding not to leave the machines outside the banking hall when they close for the day. Ordinarily, the ATMs are expected to operate 24hours a day, but nowadays, most banks place the machines permanently in the bank premises to prevent thieves from stealing money from it.
ENCOMIUM Weekly had a chat with some ATM users who confirmed the story…
FUNMI ADESOKAN
“Seriously, my ATM is my second identification card. With it, I am secured financially. However, it is tempting because I always have the urge to withdraw as many times as possible, especially when I see things to buy.”
JIDE GEORGE
“I can’t do without my ATM. I believe the report because today alone I have made use of it twice at Ogba and Agege, Lagos. Especially now that they have removed the tariff on internet banking transaction. I withdrew N60,000.”
YINKA ADEWUNMI
“Anytime I forget my ATM at home, I’m like a naked being. However, the only problem is when there is no network on your bank’s ATM.”
KUNLE OSUNJAIYE
“I always have issue when I go out with my ATM. I always withdraw anyhow. I have withdrawn thrice today. It’s helpful but it encourages excessive spending.”
– FEMI OYEWALE
