Remodeling Savings Practice through Digital Banking
The surge in patronage for digital banking in Nigeria has unlocked a new vista of opportunities in the publicity of the culture of savings and personalised banking, reports Festus Akanbi
With the latest resolve of the Central Bank of Nigeria (CBN) to pursue its cashless policy with renewed vigour through a cocktail of directives that discourage cash withdrawals from banks, financial analysts said it is natural for attention to shift to digital banking platforms, which boast of better capacity for more efficient, customised, and exceptional services to business and private concerns in the new dispensation.
Although the current banking reforms took effect this year, the savings culture that digital banking promotes has existed in various societies since man’s inception.
As the wind of change continues to blow in the financial sector, experts believe the time has come for digital banks, which are products of the rapidly growing fintech sector, to take the lead in the transformation marked by the government’s deliberate effort to discourage the use of cash for payments and other financial transactions.
According to reports, Nigeria had 3.7 billion real-time payments in 2021, ranking sixth among countries with the largest real-time payments markets, with over 200 fintech firms in Nigeria providing online access to mobile payments, digital banking, and commercial and personal finance activities.
Digital banks, like traditional banks, allow their customers to save and invest.
However, when exclusivity and personal touch are considered, analysts believe that digital banks have the upper hand, particularly among younger generations. The roll call of the leading digital banks in Nigeria includes Smartsaver, PiggyVest, Cowriewise, Carbon, Kuda, and Eyowo. The list includes Alladin, V Bank, SumoTrust, Jetseed, Rubies, ALAT, GoMoney, Mint, Koloplay, and Sparkle.
SmartSaver prides itself on its multi-dimensional, unique products and services that include; helping its users build their net worth over time with a particular product, Guaranteed Investment Savings (GIS), coupled with an extraordinary 25% interest rate per annum on personalised savings. It also allows users to collect loans with no collateral, handle bill payments and make transfers on their secured app. With its launch in 2017, this platform has served millions of Nigerians and continues to impress and add to its already impeccable reputation as Nigeria’s top digital bank.
Piggyvest offers its users the opportunity to save and invest. Piggyvest has risen to become one of the country’s most popular and used digital banks. It became the first online saving platform in Nigeria and West Africa in 2016, when it made its debut as Piggybank, having one of the best automated saving apps. It offers its users personalised and adaptable plans with up to 10-15% interest rate on savings and 25% on investments that allow four withdrawal dates.
Cowrywise, launched in 2017, has become one of the top saving platforms in the country. It boasts a user-friendly interface and interest rate calculator. It provides its users with interest rates of up to 10-15% that vary according to the user’s personal choice, thus giving both high and low-earners the freedom to save at their own pace. It also allows users to save as a group.
Carbon is one of the country’s most transparent and secure digital banks. Founded in 2012, it is a multi-dimensional VC-backed company. Although more famous for its zero-collateral loans that reach up to N1 million, it also offers users a 16% interest rate per annum when registered users invest in its Payvest product. Additionally, its user-friendly app allows users to pay bills, make low-cost, hassle-free transfers, recharge airtime, and a unique free credit report that shows their credit history in all financial institutions.
The Kuda Bank ranks as one of Nigeria’s most popular leading digital banks, known as the ‘bank of freedom.’ It is free of the obscene fees that conventional banks frequently impose on their consumers. This software makes budgeting, saving, and intelligent spending easier.
Eyowo, an innovative payment solution, was launched by a Nigerian firm, Softcom, in 2019, and it said the platform would revolutionise how people send, spend, save, receive, and borrow money. The company said that Eyowo aims to provide simple, modern, and reliable financial services to anyone with a phone number. These include consumers, retailers, businesses, and developers.
Eyowo is a digital bank that believes that if you have a phone number, you should be able to use current financial services for free. As a result, they offer simple and modern finance software that you may use with your phone number.
Alladin is a digital ecosystem bank that provides small businesses with quick access to loans, high-interest savings and investments, a robust marketplace of over 40,000 sellers and buyers, and a social feed to foster interaction between all customers in one digital app.
The company launched its digital app in 2021 and created Africa’s first marketplace digital app. This unique feature creates a connection between buyers and sellers, successfully combining banking and commerce into one digital app.
V Bank is an all-in-one digital bank that enables you to access your account and perform all your banking transactions from one app from the comfort of your home or office. It is a product of VFD Microfinance Bank. They operate as a Microfinance bank, and their services include access to loan services, fund transfer services, USSD banking, Target Savings, and Fixed Deposits.
SumoTrust is an automated savings and investment platform helping reshape Africans’ poor saving and investment culture. The bank provides a platform for individuals who need money to start a business, pay for rent, buy a property, buy a car, do some shopping, pay school fees, etc. It offers an automated savings and investment platform that is helping to reshape the poor protection and investment culture in Nigeria.
Jetseed is another dominant player. Pettysave Limited wholly owns it. They operated with the Pettysave name before the change in 2021. It works using cooperative and microfinance banking licenses (Marvelous MFB). The bank explained that third-party partnerships provide all money transmissions through regulated and licensed entities in their respective jurisdictions. At the same time, funds are invested in insured and vetted private ventures boasting solid financial track records to ensure the safety of capital and guarantee returns.
FairMoney is a product of Fairmoney Microfinance Bank, and the company is known for its cheap loans, bill payments, and transfers. The savings products are FairLock and FairSave. FairLock is like a Fixed deposit, and FairSave is a flexible savings option. FairSave offers 10% interest per annum while offering up to 18% per annum.
Rubies Bank allows you to create virtual dollar cards when users create an account. It is one of Nigeria’s few digital banks that help manage future billing. Among Rubies’ other features are savings, investing services, and the option to request money and make invoices.
Alat is a Nigerian digital bank administered by a traditional bank (Wema Bank). Alat, like most digital banks, provides free debit cards delivered to customers’ homes. They also have virtual cards available.
You can save alone or in groups with Alat. You can also conduct standard banking transactions. If you are an Alat user, you can also get access to quick loans.
GoMoney is another Nigerian digital bank that enables people to send and receive money and send payment requests, reminders, and receipts.
You can divide payments with friends or anybody else with a GoMoney account. When you open a GoMoney account, you’ll receive both physical and virtual cards.
Mint is a trusted digital bank that aims to provide more Nigerians with financial autonomy. You may set spending limits on your account, lock your card, create virtual cards and fund them, and set regular payments with Mint as your bank.
Mint bank also allows you to open a current account with as little as N2000.
This is another savings bank doing well in terms of offerings and acceptability. The available options are EasySave and Autosave. You can automate your savings by schedule, daily, weekly, or monthly. Kolopay offers an interest rate of up to 10%, allowing you to have multiple accounts with the Koloshare feature to invite others.
Sparkle is a leading operator of another top Nigerian digital bank formed by the former CEO of Diamond Bank, presently part of Access Bank, Uzoma Dozie. Sparkle has two accounts: one for personal use and one for corporate use. A debit card, an expense tracker, customised savings, bill payments, and other banking services are all included with the personal account.