Artificial intelligence (AI) has become a buzzword in today’s world. But beyond being just a trend, decision-makers are already fussing about how to deploy the technology into their operations. For Damola Giwa, Managing Director of Digital Banking at ARM Group, artificial intelligence could solve the problem of mis-banking which is prevalent in Nigeria’s banking sector.
Mr Giwa said this while speaking at the Business Day C-Suite Executives Roundtable Dinner which was held recently in Lagos. At the event titled Innovating for Impact; Harnessing Technology to Drive Business Transformation, the MD described mis-banking as a financial inclusion problem whereby banked Nigerians are bombarded with products that they do not need, rather than those they need.
“I think in Nigeria, we are still currently underbanked or mis-banked. Nobody is providing you with a very tailored solution that meets your needs. Most of us receive emails from our banks selling us products that do not really connect with us. And it is not their fault really because they don’t know you. So AI will ensure that you can understand the customer, understand their needs and we can reach out to them even before they know they have those needs,” said.
AI in the face of Nigeria’s banking problems
Though growing in leaps, Nigeria’s banking sector yet appears to be failing in a number of ways. One of them is financial inclusion, a space that has since been overrun by various fintechs providing payment solutions. A paper presented by Oluwaseun Adesanya for SystemSpecs noted that misconception is one of the biggest problems facing financial inclusion in the country.
“Generally, there is a belief that once it works anywhere else (including Kenya), it can work in Nigeria. But the reality is that the culture and economy ideology differ because Nigeria is still predominately cash based,”
This general misconception is quite prevalent with banks and other financial services providers such that even for the banked population in the country, there is still a major problem of mis-banking. Financial services providers need to tackle this if they must provide the correct services to the correct customers.
Another major problem in the banking sector in Nigeria today is poor access to credit which is the overarching problem with inclusion. The ARM MD of Digital Banking, Damola Giwa, pointed out that at the core of banking is the provision of credit.
“Let’s not be deceived by what we do in Nigeria currently like paying bills etc. Banks exist to be able to drive the real sector. Only 6 per cent of adults in this country said they have access to credit from licensed financial institutions. So why are our financial institutions not lending? It is because they don’t really know you guys. So I think over time, if you rightly deploy data and artificial intelligence we will be able to get more data and answer those questions about credit triple C; character, capacity and all, and determine the customers that really need the money and will be able to pay back,” he said.
He, however, advocated for the need to ensure that innovation is not all about using bots which is another form of AI. He insisted that innovation must be really focused on solving the real problems. As such, a mindset shift is required to decipher which technology is going to bring more advantages to the customers.
“At the core of innovation is an obsession for the customer. Your sustainability as a business is directly related to how you can meet the needs of the customer in a unique way, better than the competitors. So if you have a system that ensures you can do that well, then tech becomes an enabler for that,” he said.
See also: CAC registration is an attack on financial inclusion and our jobs – POS operators
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