Naira Redesign: Will Lessons From Banks’ Poor Network Lead To Improved Customer Service?

Stakeholders in the banking and financial sector, in a media parley in Ibadan recently captured the difficulties Nigerians have been experiencing due to the naira redesigning and cashless policy of the Central Bank of Nigeria (CBN). They,, therefore expressed optimism that the lessons learnt will subsequently improve banking services. ISAAC ASABOR writes

If there is a frustrating experience that banks customers in Nigeria collectively and individually passed through (and still passing through) in the bid to meet the Central Bank of Nigeria’s (CBN) directive for the return of old 200, 500, and 1,000 naira notes to commercial banks not beyond January 9, 2023, as they ceased to be legal tender in the country but was later pronounced to be legal tender, and to be in circulation until December 31, 2023, it is that of persistent service network failures that prevented them from consummating digital banking transactions so much that not a few Nigerians have had to struggle with bad networks from their banks amidst the naira scarcity, which implements the cashless policy seem even more unrealistic.
In fact, the situation has become knotty that some Nigerians are now turning to payment solution providers, like OPay, Smartcash and Palmpay, among others as a way out of the quagmire. Without resorting to exaggeration, a lot of people have experienced disappointments over transaction failures to a worrisome level so much that it has drawn the attention of key stakeholders in the banking and financial sectors of the economy.
It would be recalled that financial experts a few weeks ago advised banks and mobile telecommunication companies to improve their Information Technology capacity to ease the challenges of electronic transfer of funds.
They advised a media parley in Ibadan on the difficulties Nigerians have been experiencing due to the naira redesigning and cashless policy of the CBN.
A Financial Expert, Tunji Adepeju, said the problem with electronic transfer in the country has to do with inadequate IT infrastructure, and of which many concurred with him saying that banks have not invested much in the upgrading of their internet infrastructures.
He said, “There is not as much use of POS or USSD transfer before as we do now. Naturally, when there is pressure right from the internet service provider, there would be an overload, leading to poor network, and due to the rush, there would be a crash.
“That is what we are having with our IT infrastructure now. You make a transfer and it doesn’t go at the right time or you use your POS, your account is debited and the other party did not receive the credit.
“This is just unfortunate. I want to believe that the banks must be working on their infrastructure,” Mr. Adepeju re-emphasised.
He noted that the Nigerian Inter-Bank Settlement Systems (NIBSS) should also put up a more robust system in place, due to the increase in transfer rate.
“When you do a transfer, it will seem like it didn’t go, but if you do it again, you will be crediting the recipient twice.
“Again, if you do a transfer and you are using the One Time Password (OTP) to confirm the transfer, it ought to come in almost immediately after you requested it, but now, it comes about 15 to 20 minutes, which renders it invalid.
“These are issues that they have to look at from their respective banks and since everything goes through NIBSS, it also has to improve its server,” Mr. Adepeju said.
Another financial expert, Lolade Adesola, was of the view that the cashless policy was for the good of all.
She said that the policy ought to have been done gradually without a rush.
Also, an Economist, Samson Olalere, said that the overload on electronic transfers was due to the inability of Nigerians to access banking halls for their transactions.
“The IT capacity to cope with the traffic caused by the lack of cash was not prepared for, which led to congestion; hence, the difficulty to transfer.
“There was a need to expand the capacity of electronic transfer and internet banking before the policy was effected, but nobody was expecting it; even, the banks and NIBSS were not expecting it.
“They were operating on the capacity they had, which is about a ratio one over 10 of what we are supposed to have, hence, the congestion in service and the inability to transfer money.
“This is affecting the people as the capacity of the banks and service providers is low,” Mr. Olalere added.
According to NIBSS’s recent data for January 2023, there was a surge in the number of Nigerians, using mobile banking, putting the worth of registered mobile transactions for the period at N2.37 trillion.
This figure, which might be occasioned by the country’s ongoing cash shortage, represents a staggering 125 percent increase over the same period in 2022.
Without a doubt, the hardship caused by the cash crunch affected every aspect of life so much that not a few Nigerians languished under the situation. Unfortunately, the forgoing harrowing experiences that manifested in the form of network failures at the height of the prevailing cash crunch crises collectively stand on their heads as online banking is reputed to have many benefits. Two of the most important are speed and convenience. People who participate in online banking under normal network conditions can access their accounts, view their statements, make transactions, pay bills, and much more.
In fact, from the comfort of their homes, offices, or on the go they can seamlessly transact business with their banks.
Against the foregoing, it is surprising that despite the benefits online banking is known for that not a few customers are gnashing their teeth for subscribing to the services being rendered by virtually all the commercial banks in Nigeria.
At this juncture, it is expedient to say that the challenges are highly significant both for banks that offer online banking and also for their customers, who depend on the banks to operate effectively. Without a doubt, Nigerian banks that offer online banking services need to know these challenges so that they can efficiently navigate them, and pave the way for the existence of a non-problematic cashless economy which the federal government and the CBN have been aiming at since more than a decade ago.
While agreeing with the immediate past president of the Association of Telecommunications Companies of Nigeria (ATCON) and the National Coordinator for the Alliance for Affordable Internet Engineer, Olusola Teniola, in his views earlier in the year at a media parley, it is expedient to recall that he said, “We are too reactive. Maybe the systems are tested only in the laboratory and so when launched in the public, we become guinea pigs, and even the bankers themselves are trying to understand the system. That is why they can’t attend to you immediately because there are errors they can’t account for.”
To my view, the pervading network failures being experienced by bank customers in Nigeria amid the prevailing cash crunch should serve as a wake-up call
In fact, the rising e-channel transaction is a wake-up call to banks and their boards to upgrade extant infrastructure. It is no longer business as usual.
To buttress the foregoing view, data released by the Nigeria Inter-Bank Settlement System Plc (NIBSS) shows that the volume of transactions performed electronically by Nigerians surged 55 percent in January 2023.
Further analysis indicates that the number of NIBSS instant payment (NIP) users increased to 541 million in January 2023 from 348 million in January 2022, highlighting the growing trend toward a cashless society.
In value, the industry data reported N38.7 trillion in January this year, a 45 percent rise from N26.6 trillion recorded in the corresponding period of last year.
Tajudeen Ibrahim, Director of Research and Strategy, Chapel Hill Denham, said a major driver to the surge is the naira redesign policy, “As cash in hand became scarce, most Nigerians had no other option than to adopt the available electronic channels as NIP is the most preferred platform in use.”
Looking at the challenges faced by e-payment in the ongoing cash crunch despite its surge compared to what was reported in January 2022, Ibrahim noted that the robustness of this electronic platform to accommodate a large number of users and transactions at the same time was a major challenge.

According to NIBSS, over the years, Nigerian banks have exposed NIP through their various channels, that is, internet banking, bank branch, kiosks, mobile apps, Unstructured Supplementary Service Data (USSD), POS, ATMs, etc., to their customers.
Chairman, of the Association of Licensed Telecom Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, said, “We provide the pipe for transportation of all financial transactions between banks and their customers. What happens at the interconnectivity end of the financial transaction is not under the control of the telecom operators whose infrastructure the banks are using to provide digital financial services to their customers.
“All other online applications like Unstructured Supplementary Service Data (USSD), e-commerce, website, and internet browsing, are working perfectly except for mobile apps used for financial transactions, which I think, is a result of an increased volume of transactions on the mobile apps of banks because the ATMs are no longer dispensing cash as they should and the banks are not releasing cash across the counters, leading to cash crunch in the economy.”
Adebayo told newsmen that the banks need to build more capacity and strengthen their banking applications to make the apps resilient enough to accommodate the pressure. Considering the foregoing, it is expedient for commercial banks in the country to learn lessons from the prevailing poor banks’ networks in the ongoing cash to improve customer service.
Meanwhile, it is expedient that commercial banks in Nigeria should learn from lessons learned from poor banks’ networks during the prevailing cash crunch, and ensure that the lessons learned lead to improved customer service.