Digital Banking Forces Standard Chartered to Reduce to 13 Branches From 25

Admin 12-Jan-2022 Business

The boom in e-payment system  in Nigeria has forced the London-listed Standard Chartered Plc to reduce its branches from 25 to 13.

According to a foreign news platform, the bank had already shut some offices in December and will eventually operate only 13 branches, down from 25, in Nigeria, citing an exclusive document, all in its bid to embrace  and expand retail business through digital banking.

Since its commencement of operations in 1999 in Nigeria, Standard Chartered has focused on corporate banking. But in order to expand its retail base and  grow the number of its customers to 500,000 in the next two years, the lender is banking on digital technology to attract consumers quickly. It was also reported that the bank is planning to start digital lending to process small loans quicker and increase the volume of retail credit, according to the news outlet.

Banks and other financial service providers have been adjudged important actors in scaling up FinTech solutions by experts, warning that banks that fail to innovate will lose their market share.

A 2019 publication by GSMA Intelligence, a definitive source of global mobile operator data, analysis and forecasts, and publisher of authoritative industry reports and research , disclosed that in some markets, there have been concerns that mobile money could change the landscape for traditional banking, disadvantaging commercial banks.

‘‘A particular issue arises if mobile money becomes a substitute for demand deposits in banks, which would constrain their lending capacity and deteriorate their liquidity position. If this drives a negative impact on the financial performance and health of commercial banks, this could have implications for broader financial  stability in a country.

It would also reduce the role that commercial banks play in the financial system and therefore weaken the transmission of monetary policy.’’ A faculty member of Lagos Business School (LBS), Dr. Olayinka David-West, recently said banks needed to embrace innovation if they want to succeed and ward off threat by the Fintech start ups. She said the financial services sector has witnessed digital entrepreneurship in the form of the fintech majorly because they are highly innovative, inexpensive startup skillset, very entrepreneurial and passionate and have no defined guidelines/regulations.

Source: The Sun

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