July 14, (THEWILL) – The Nigeria Inter-Bank Settlement System (NIBSS) is engaged in a silent revolution of the financial services sector through its mandate which focuses on problem-solving initiatives. The far-reaching impact underlying the labyrinth of its activities will expand the e-banking revenue of relevant entities and, also, boost financial inclusion – two major areas of consideration.
This is because NIBBS, as an enabler, focuses on continuous improvement and innovation as the core of its problem-solving mandate. The global demand for its services creates no room for campaign or strategic media visibility. This is considered a distraction to an organisation that does not play in the league of fast-moving consumer goods firms engaged in household sachet consumptions.
According to the Managing Director/CEO, Premier Oiwoh, NIBBS upgrades its systems continuously. A reason for this is that the NIBSS was established to carry on business as a service-oriented institution providing mechanism for problem-solving innovations.
He explained that with 65 million Bank Verification Numbers (BVN) holders enjoying the products offered by the financial services institutions, NIBSS plays a major role in facilitating the technology-based innovations that make for seamless financial transactions.
This is in line with part of its mandate: “To provide infrastructure for the automated processing and settlement of transactions between banks acting on their own account as regards deposit placements, Treasury Bills Transaction, Naira settlement on inter-bank foreign exchange transactions.”
“NIBBS is a silent trail-blazer in the modern financial services industry supporting the technological revolution that has transformed the banking landscape. They have made us forget that up-country cheque clearing took 21 working days while domestic clearing required 14 working days,” said Tony Akalonu, a retired bank executive now into consulting service.
Shielded from the prying eye of the public at its serene base overlooking the popular Bar Beach in Victoria Island, Lagos, NIBSS houses amazingly sophisticated facilities that pass human understanding.
The young workforce – from management team to the lowest member of staff – exude extraordinary aura of clinical concentration to the screen of their computer laptops in the cool and quiet paperless office environment that operates every moment of the day and night.
There are screens monitoring real time performance of the financial services institutions’ systems – downtime, network connectivity, POS and others ICT-related workings.
“When we notice such disruption, we call the bank concerned to know the cause and what they are doing about it, because there should be no service obstruction, every second counts”, Oiwoh said, while explaining the functions of the monitoring gadgets strategically placed in different units.
Oiwoh said NIBSS is working towards a totally biometric system that the fingertip would play the role of cards because our focus is continuous upgrade of existing facilities.
“We are working to make Nigeria work; hence NIBSS must guarantee Nigeria’s efficient payment system. We will continually remain in our creative thinking because technology is about creating value, and collaboration is the key”, the NIBSS boss told visitors to the facility.
The Federal Government and the banks have benefitted from the revolution in the financial services industry through taxes, levies, fees and commissions.
The government collected N49.5 billion from Electronic Transfer Levies in Q1 2024. Typically, EMTL is levied on transactions conducted via platforms, such as mobile money, internet banking, and other electronic payment methods. It applies to all electronic transfers of funds placed in a Nigerian-licensed bank or financial institution.
Similarly, the banks have recorded significant revenue increase through their e-banking activities which is promoted by NIBSS.
Analysis of the FY 2023 financial statements of the Tier-1 group in their Holco structures, revealed that the Big Five generated a total of N385.85 billion in e-banking revenue as against N277.14 billion in 2022, representing a 40 percent increase.
UBA earned the highest e-banking income among the Tier-1 financial services institutions. The bank generated N125.57 billion in 2023 representing 32.5 percent of the Tier-1 group total income for the year.
By this, Africa’s Global Bank grew its e-banking income by 59 percent when compared with N75.94 billion it earned in 2022 to emerge the first in 2023, followed by Access Bank which recorded N101.61 billion against N59.65 billion in the previous year, accounting for a 70.34 percent rise.
First Bank grew its e-banking income by 20 perent to N66 billion in 2023 from N55 billion in the preceding year, ranking it the third among the Big-Five group.
It was followed by Zenith Bank with e-banking revenue of N51.81 billion compared to N45.73 billion in the preceding year, representing a growth of 13.3 percent.
The financial statements of Guaranty Trust Bank revealed that the 34-year-old bank recorded N40.82 billion as e-banking income in 2023, against N31.73 billion in 2022, constituting a 28.6 percent increase.
The Q1 2024 financial statements of the Tier-1 group (excluding FirstBank of Nigeria) amounted to N108.95 billion against N64.32 billion or 70 percent increase and followed the same performance trend by the major banks.
UBA’s N44.35 billion e-banking revenue in Q1 2024 representing 60 percent of the total e-banking income by the four Tier-1 banks was the highest during the period. It was followed by Access Bank which recorded N33.38 billion, while Zenith Bank and Guaranty Trust Bank earned e-banking income of N19.96 billion and N11.26 billion respectively.
The remarkable increase in e-banking revenue of the banks shows the high level of interest in alternative payment system by bank customers as the CBN pushes for expansion in financial inclusion across the country.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
