A month (or two) back, Seyi Taylor of Tech Cabal said he’s expecting to see an app-only bank in Nigeria soon.
I’ve just been thinking about how it will work all day and all I keep hearing is “it cannor work”
First, is it achievable? Then, can this really work in naija? I’ll love to hear your thoughts on this.
Oh Yes. Someone is already doing it. And they have celebrated a year birthday.
Next…
I may not be able to speak on behalf of CBN.
In some ways even the traditional banks are leveraging enterprise solutions like IBM to open more branches on people’s phone. 
An app with a bank charter might actually be on its way If regulation does not get in the way.
My 2 cents.
Regulation doesn’t stop it. There are some caveats but in summary as long as there is a valid banking license and at least 1 physical office, with all the minimum tech requirements (which is really out-of-date) and risk requirements met, it is possible.
From an execution standpoint, as long as it’s tailored to a local customer-validated value proposition and not an attempt to blindly mimic the Simple’s or NUMBER26s or Bunqs or Atoms of this world (there are quite a few successful ones in other climes), it should succeed.
I know a few local offerings will be appearing sometime soon.
But if we localise the Simples dont you think it will work, just want to know more
Good to have your view on this @philiprohv, you are in position to enlighten better.
It may or may not work. There are no right answers without customer validation. I do know however that there is a need for such a value proposition among youth (mostly undergrads) and young professionals. The execution of it though, given our own unique operating environment and its attendant challenges, is another story.
@KelvMakanjuOla I prefer to call it a mobile bank or internet (e) bank because a lot of people in Nigeria don’t even know what an app is.
It’s very achievable and needed. Some variation of this already exist in Nigeria (ex Piggy Bank, Paylater, Aella Credit etc.), only that they are not necessarily “banks”, yet offer similar services.
The regulations opening an internet bank should be the same as any regulation opening a small bank in Nigeria.
Outside Africa, there are Ally Bank, Tangerine Bank, Zag Bank, and so many more…
To solve the no branch issue, Tangerine Bank partners with cafés in Canada. In Nigeria, an internet/app bank can partner up with Shoprite, Spar, etc and even give incentives to shoppers. It’s a win win situation for all parties.
How does a customer with raw cash at hand deposit into his account.?
I know that most companies pay their workers via internet banking , but what of carpenters , bricklayers and and traders that get paid hand to hand. How do they deposit?
They can do that at the bank’s agent points - local stores, post offices etc.
ATM deposits in designated locations with partners.
Not scalable. How many of those ATMs will you need to deploy? Don’t forget that a lot of handholding will also be required for such transitioning.
This endeavor is incredibly vast! I can tell you for a fact. There are so many models one could follow. One key thing that people embarking on this journey would quickly realize is that you have to be very specific and focused on your target audience. Carpenters,Bricklayers etc, would most likely not be your primary audience if your value proposition revolves solely around your app…
Yes, and I also agree with this:
You do not need to a lot of ATMs and you can implement ATM in addition to post office and local stores (depends on the reputation). The traditional bank branches aren’t exactly fully scalable either.
You can also have employee supervised ATM as well to solve the handholding problem.
What event/experience informed this? We shouldn’t be passing GSMA and CGAP knowledge as a fact.
No event or GSMA/GCAP knowledge sir. I’m speaking from the trenches.
To clear any ambiguity though I am not saying that Carpenters and other artisans cannot be served by an app-based bank. But the OP is specific about the bank being app-ONLY. That category of customer cannot be served by an app-only value prop in this country, for now. You will have better success going the no-frills agent banking route (combined with USSD and a simple-plain-as-day-app) than pushing some sophisticated, complicated app alone, aimed at meeting ALL their needs.
All based on my experience so far sir.
I think this is key but only the first step. After the target audience is identified, then one will need to determine what service to offer - not universal banking. See below quote from a post I wrote - How Fintech Can Power Small Business in Nigeria which touches on OP’s original question as well.
Don’t try to be everything to everyone. Instead a good approach is to pick a niche, then go deep to understand it. Doing that means chances are higher that you can be enormously successful at solving the problems, faced by that specific group of small business owners
In summary, I definitely think a mobile app only bank stands a good chance - if executed well.
Exactly! Hence my stressing Customer-Validated Value Proposition .
I’ve been thinking of how cash deposits would be possible. Maybe making it possible to link one’s traditional bank to the app-only bank might solve the probs…abi how you see am?
Would absolutely love it!!
The hassle of going to banking halls in Naija isn’t FUN!!( Mixed aroma of Yves Saint Lauren+ Issue Miyake,Attitude of staff and the ques)
I have accounts with both Tangerine and the new mobile bank created by former tangerine founder Zenbanx which is more like money transfer.
In Canada, you can deposit your cheque by taking the picture within the app and you get credited within 5 business days but usually get to spend like $200 immediately. Also, there is interac email transfer that allows people to email money to any bank users and you get it instantly after answering the security questions and proceed to deposit to any banks.
You can linked your bank account with the mobile bank, so that you can do direct deposit and withdrawal between the accounts.
The advantage of mobile banking is that they offers free & interest chequing account.