‘Automated-Teller-Machine’ (ATM), Most Visible Proceed Of The Banking Sector Reforms To Nigerians; (BVN Least Significant)

Abuja, Nigeria. June 9th, 2015 – A poll commissioned by BusinessDay Media and conducted by NOIPolls Limited in April 2015 revealed that majority of Nigerians (91 percent) see the introduction of the ATM as a major (most significant) reform in the banking sector over the last decade and this is the same across all the geo-political zones and age groups. The introduction of the NUBAN number (44 percent); internet banking (42 percent), Point of Sale-POS (32 percent) and Mobile Money Services (23 percent), were also mentioned as key banking sector reformation changes. The least mentioned was the bank verification number (BVN) (2 percent), which was introduced in February 2014, by the Central bank of Nigeria (CBN) as part of its cashless policy to capture customers’ data, give every customer in the Nigerian banking system a unique identification number that can be verified across all banks in Nigeria and check fraud in the banking system.[1] This finding therefore suggests the need for more rapid awareness creation on the BVN to Nigerians given the close deadline for registration in June 30 2015.

More findings from the poll revealed that ATM services are the most used form of electronic banking services as indicated by majority of the respondents (68 percent). This is followed by 10 percent of the respondents who indicated they use Mobile Money and this is mostly true for Bank customers in the South-West (19 percent) and South-South (17 percent) zones. Respondents also indicated Point of Sale-(OS) (6 percent), Internet banking (6 percent), and Credit Card (2 percent) as other electronic banking services used by customers. Nevertheless, a considerable proportion of bank customers (18 percent) do not use any of these services mentioned. Nigerians in this category most likely to be senior citizens aged 60 years and above.

Finally, in an evaluation of critical attributes of ATM and POS as electronic banking services, respondents rated ‘Ease of Use’ and ‘Security’ of ATMs as good with a rating of 4.4 and 4.0 respectively; while rating ‘Proximity’ (3.8), ‘Reliability’ (3.8), ‘Availability’ (3.7) and ‘Resolution Time’(3.5) of ATM  above average. Similarly, the Ease of Use/Operation of POS received a good rating, while other attributes such as; Security (3.9), Reliability (3.8), Resolution Time (3.5), Proximity (3.8) and Availability (3.7) rated above average. It is significant to note that, Ease of Operation was rated high for both the ATM and the POS while resolution time was rated lowest.

Brief Background

The Federal government of Nigeria introduced the Banking Sector Reform in the year 2004 with the aim of having a more efficient and reliable banking sector to enable better security of customer’s monies and strengthen growth potential in banks business operations.

The cashless policy which was introduced in 2012 as part of the reforms to reduce the high risks attached to currency management in Nigeria and also to intensify the national payments system, as in the past high lending rates and service charges were inherited by customers due to heavy operational costs in the banking sector. These operational costs were high as a result of huge cash transactions of goods and services on a daily basis.  Frequent printing of currency notes, cash movement, cash management, currency sorting were all attributes of the high operational costs, therefore, the CBN and the Bankers’ committee met to encourage a platform where cheques and electronic payment could be used for a higher and increasing proportion of transactions in accordance with global standards.[2]

In order to foster the Cash-Lite policy of the CBN, there was a massive deployment of Automated Teller Machines (ATMs) and Point of Sale (POS) terminals which allowed customers pay for goods and services using their ATM cards. Other alternative distribution channels were also launched like the Mobile Telephony, Internet Banking, etc. Data from the recent Financial Strength Rating revealed that ATMs were the most frequently used, followed by mobile payments, POS terminals and Internet Banking, among the various e-banking channels.[3]

Against this background, NOIPolls Limited conducted a poll for BusinessDay to measure the opinion of Nigerians regarding the reforms they have witnessed in the banking sector, as well as measure their evaluation of the electronic banking services with a focus on ATM and Point of Sale (POS) services.

Key Findings

In order to measure the level of awareness of Nigerians on the banking sector reforms / changes, respondents were asked: Compared to 10 years ago, what major reform/change(s) have you witnessed in the banking sector? Results revealed that most Nigerians (91 percent) see the introduction of ATM in banking services as the most significant innovation under the banking sector reforms in the last 10 years, and this opinion cuts across gender, geo-political zones and age-groups. This is followed by the introduction of the NUBAN number as mentioned by 44 percent of respondents; which was mostly indicated by the 60+ age-group.  This is not surprising as the introduction of the shorter unique NUBAN number would have come as a great relief to this age group over memorizing lengthy account numbers as practiced before the banking sector reforms.

Internet banking (42 percent), POS (32 percent) and Mobile Money (23 percent) were other changes in the banking sector reform mentioned by respondents. The South-West zone accounted for the largest proportion of respondents who attested to witnessing these as major reforms in the banking sector. On the other hand the North-West zone accounted for the least proportion of respondents who indicated the introduction of NUBAN number (25 percent) and Internet banking (23 percent), while the North-East zone accounted for the largest proportion who witnessed POS (13 percent) and Mobile Money services (9 percent).

Improved Customer Service is the least change that was mentioned by respondents with only 2 percent attesting to this. This suggests that adequate customer satisfaction is still lacking across various  operating banks in the country.

To gauge the use of electronic banking services by bank customers, respondents were asked: Which of these electronic banking services do you currently use?  Findings revealed that majority of the bank customers (68 percent) use ATM services, and this cuts across gender, age-group and geo-political zones; although, the South-South zone (74 percent) accounted for the highest proportion for respondents who use ATM services.  In addition, 10 percent of the respondents indicated they use Mobile Money and this is mostly true for bank customers in the South-West (19 percent) and South-South (17 percent) zones.

Other electronic banking services used by customers include; Point of Sale (POS) (6 percent), Internet Banking (6 percent), and Credit Card (2 percent). Moreover, a considerable proportion of bank customers  (18 percent) do not use any of these services, customers in this category are most likely to be senior citizens aged 60 years and above, as well as bank customers within the age-group of 46-60 years.

To gauge the frequency of use of ATM services by bank customers, respondents who use ATM services (68 percent of the total) were asked: How often do you use ATM services? Overall, most bank customers who use ATM services indicated they use the service ‘more than once a week’ (38 percent), this is followed by 19 percent who indicated ‘once a week’ and 16 percent who indicated ‘once a month’.

Further analysis based on gender revealed that bank customers who use ATM services ‘more than once a week’ are mostly males (46 percent) than females (27 percent).  Analysis by geo-political zones revealed that the majority across almost all geo-political zones use ATM services ‘more than once a week’ with the highest proportion seen in the North-West and South-West zones, with 45 percent each.

In addition the larger proportion of Bank customers in the North-East zone (31 percent) mostly use ATM services ‘once a month’ while a considerable proportion of bank customers in the North-Central zone (21 percent) admitted they rarely use ATM services.

Subsequently respondents who use POS services (6 percent of the total) were asked: How often do you use POS services? Findings revealed that the larger proportion (26 percent) of customers who use POS indicated they ‘rarely use’ it; this is mostly true for bank customers in the North-West zone (53 percent) and South-East (39 percent).  Although 19 percent of the respondents especially from the South-West zone (30 percent) reported they use POS services ‘more than once a week’, in addition, 15 percent of the respondents indicated they use POS services once a week and the North-East zone (45 percent accounted for the highest proportion of respondents in this category.

With the aim of gauging the perception of Bank customers on critical attributes relating to the use of ATM services, respondents were asked: On a scale of 1 to 5, where 1 is very poor and 5 is very good, how would you rate the following attributes relating to ATM Services; a. Ease to use, b. Security, c. Reliability, d) Proximity, e) Availability, and f) Resolution Time? Overall, respondents rated the ease of use and security of ATMs as good with a rating of 4.4 and 4.0 respectively; while rating Proximity (3.8), Reliability (3.8), Availability (3.7) and Resolution Time, above average. The ease of use of ATM services received the highest rating while resolution time, which is the time taken for banks to resolve issues relating to ATM services, received the lowest rating amongst all other attributes.

Analysis based on geo-political zones revealed that the ease of use of ATM services received a good rating across all geo-political zones, although the highest ratings on this attribute were from the South-South and South-West zones with 4.5 each. Similarly, Security on ATM services received a good rating across almost all the geo-political zones except for the North-West zone (3.9) where a rating above average was obtained for this attribute.

Finally, respondents were asked to rate the same attributes for POS as rated for ATM services in the previous chart and findings revealed that the Ease of Use/Operation of POS received a good rating, while all other attributes including; Security (3.9), Reliability (3.8), Resolution Time (3.5), Proximity (3.8) and Availability (3.7)  above average.

The North-East zone gave the highest rating on the Ease of Use/Operation (4.8), Security (4.4) and Reliability (4.5) of POS compared with other regions. This therefore supports findings from the previous question asked about the rating the most frequently used electronic banking service by the North East zone when compared with other regions such the North-East and South-West regions.

In conclusion, the poll revealed that a large proportion of the adult Nigerians surveyed believe that the introduction of the ATM is a major reform seen in the banking sector.  While Improved Customer Service and the Bank Verification Number, BVN, was seen as the lowest of all the reforms. Suggestion: Analysis of results revealed that the age group of 60 and above registered the highest percentage of respondents that indicated the introduction of NUBAN numbers as a major initiative of the banking sector reform. Majority of Nigerians use the ATM as a means of banking transactions, with further results revealing that  more men than women uses this electronic banking service than any other alternative means of transaction. Finally, bank customers rated the ease of use of ATM and POS as good, while the resolution time for both services received the lowest rating, although with an average rating.

Survey Methods

The opinion poll was conducted in April 2015. It involved telephone interviews of a random nationwide sample. 1,500 randomly selected phone-owning Nigerians aged 18 years and above, representing the six geopolitical zones in the country, were interviewed. With a sample of this size, we can say with 95% confidence that the results obtained are statistically precise - within a range of plus or minus 2.5%.

About NOIPolls

NOIPolls Limited, No1 for country specific polling services in West Africa. We conduct periodic opinion polls and studies on various socio-economic and political issues in Nigeria. More information is available at www.noi-polls.com

About BusinessDay Media

BusinessDay, established in 2001, is a daily business newspaper based in Lagos, Nigeria. It is the only Nigerian newspaper with a bureau in Accra, Ghana. BusinessDay Media Ltd is the leading medium for up-to-date news and insightful analysis of business, policy and the economy in Nigeria, a critical decision-making tool for investors and managers. It provides unbiased news and informed analysis on politics, governance, social and economic trends.

Disclaimer

This press release has been produced by NOIPolls Limited and authorized for release by BusinessDay Media on the NOIPolls media platform to provide information on all issues which form the subject matter of the document.

Kindly note that while we are willing to share results from our polls with the general public, we only request that NOIPolls be acknowledged as author whenever and wherever our poll results are used, cited or published.

NOIPolls hereby certifies that all the views expressed in this document accurately reflect its views of respondents surveyed for the poll, and background information is based on information from various sources that it believes are reliable; however, no representation is made that it is accurate or complete. Whilst reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any views expressed herein by NOIPolls for actions taken as a result of information provided in this report. Any ratings, forecasts, estimates, opinions or views herein constitute a judgment as at the date of this document. If the date of this document is not current, the views and content may not reflect NOIPolls’ current findings and/or thinking.

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[1] http://www.premiumtimesng.com/business/169879-cbn-sets-new-deadline-for-bank-customers-verification.html

[2] http://www.cenbank.org/cashless/

[3] http://www.cenbank.org/OUT/PUBLICATIONS/BSD/2003/E-BANKING.PDF