Emmanuel Ochayi
A report by KPMG titled “In Pursuit of Value” revealed a decline in weekly Automated Teller Machine (ATM) usage, dropping from 70% to 40% due to the scarcity of physical cash in circulation.
Surveyed customers from Nigerian and Ghanaian banks in 2023 shared their struggles with the unavailability of cash in bank ATMs, leading to a notable shift towards agency banking and increased digital transactions.
Join our WhatsApp Channel“Currently, four in 10 customers report weekly ATM usage, a notable decline from the previous seven in 10 over the last few years,” mentioned the report.
This decline aligns with a rise in agency banking, with six in 10 customers favoring bank agents every week, highlighting the persistence of cash dependency.
READ ALSO: Bank Investors Earn N248.68 billion Amid Naira Scarcity Caused By CBN’s Policy
The survey also disclosed a 52% increase in digital payments between January and October 2023, as per NIBSS data.
This surge was largely a response to the cash crunch triggered by the Central Bank of Nigeria’s naira redesign policy.
“The initiative to overhaul the Naira aimed to regulate cash circulation and reduce reliance on physical currency,” explained the report.
However, the poorly implemented policy resulted in declining economic activities, causing hardships for Nigerians.
As a consequence of the surge in digital payments, Tier-1 banks struggled with multiple transaction failures. Fintech companies stepped up to meet the challenge, leading to a change in customer preferences.
The survey revealed a notable shift, with 58% of respondents either switching banks or opting for fintechs, a rise compared to the mere 15% who made such moves in 2022.
Moreover, the report highlighted a drastic change in reliance on fintechs for primary banking needs, rising from four percent in 2022 to 13% in 2023 among retail banking respondents. This indicates a radical shift in consumer behavior amidst the changing landscape of banking and payment preferences.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
