It has been observed that the surge in transactions and the inability of traditional banks to meet customers’ demands created opportunities for digital banks....CONTINUE READING
Mr. Uzoma Dozie, the Founder and Chief Executive of Sparkle, a digital-powered microfinance bank, disclosed this in an interview. He said the period when most Nigerians couldn’t access cash from banks made digital banking popular…..CONTINUE READING
He said, “There was increased awareness, appreciation and adoption of our services. The first thing the situation did was that it created awareness as people were looking for other options. Although we had been doing digital marketing, the cash crunch created more awareness and visibility for us. And when people try it, the experience and speed gave them confidence.
“So, adoption was very high. Since we started, we have had close to one million downloads. Some people would just download and keep it on their phones without activating it. So, with the cash crunch, a lot of such people started using the app. We also saw people who had opened accounts, but were not using them, started using those accounts.”
He added that this actually improved transactions volume during the period and many digital banks benefitted from it.
“Our transactions volume moved from over 12,000 daily to over 20,000 daily and in terms of value, we now do over N400 million daily. And you know word of mouth is quite strong and so people who have experienced our service, now tell others about us.
“Fortunately for us, we had gone through a system upgrade which was meant to increase capacity. So, we didn’t get caught up in the capacity issue as accounts were working and transactions were going smoothly during that period of the surge. It also helped in validating that digital is here to say.
“Also, another thing for us which is very key is that there were no issues of fraud. Cyber threat is one of those things that people are scared of with digital organizations. We made sure that we developed a trusted organization before we went out marketing our bank so that anybody who uses Sparkle feels safe that their transactions and data privacy is well protected”.
Speaking on the overall idea of what the Central Bank of Nigeria (CBN) is trying to do with the cash redesign and promotion of the cashless policy, Dozie said the move was meant to help engender economic growth. By reducing cash, you are trying to reduce the cost of transactions and also make it more secure to do transactions.
He said, “People have been used to moving cash about and here, you are trying to make them have less cash, which is safer, more secure and more experiential. Nigeria has a financial inclusion agenda and digital solutions would help the country achieve it. They always say cash is king, but during the lockdown when cash couldn’t move, we saw that people were stranded because they couldn’t do transactions. Clearly, cash has limitations on what it can do and if we continue to use cash, we wouldn’t be able to scale and we wouldn’t be able to reach the bottom of the pyramid and we wouldn’t be able to scale in terms of even lending money to people.
“The thing about cashless is that when you are using digital financial inclusion, you are able to capture a lot of information. If I know more about the people and what they are doing, then I can lend more to them even without looking at their statements. That is the issue”.
While speaking of the experience of his company, Sparkle, which has been three years in operation, Dozie said, “I would say that it has been an education because working in a traditional bank and moving to a digital bank is completely different. I think the transition was easier and more interesting for me because when I was at Diamond Bank, we built a retail platform and in doing that, we had to work with fintech. So, I understood the digital ecosystem. So, I moved from a traditional banking system to a hybrid traditional system and now digital. So, it was an education for me.
“We started just around the time of COVID-19, from working 9 am to 5 pm daily to remote working and now, we are in a hybrid stage where people are working from different parts of the world. The world of work has completely changed.
“Today, I understand better the power of small businesses in Nigeria. When you are working in a traditional bank, I think you are beclouded by a lot of corporates and big businesses. But now, we are working in a space whereby you have to attend to the needs of millions of individuals and millions of entrepreneurs and small businesses…..CONTINUE READING
