Conventional Banks Will Lose All Their Customers To NeoBanks

I was alarmed over how neobanks in less than a decade of existing in Nigeria are sweeping through Nigeria’s banking space and snatching up old-time customers from conventional banks. 

If you go to local and city markets and ask, there is a high chance that the market vendors are using either Opay, Kuda, Palmpay or Moniepoint. If you intend to make a transfer to an Uber rider, cab driver or delivery bike rider, chances are that the driver or rider is using either Opay, palmpay, kuda or Moniepoint. 

I enquired from some of the users who excitedly turned themselves into unpaid ambassadors of the neobanks and I found out that why most of the conventional bank customers are migrating to neobanks in droves are majorly two reasons; first which is immediate receiving of credit alerts once the sender initiates and concludes the transfer transaction. 

They say that if a buyer pays through a transfer, they receive the credit alert instantly unlike conventional banks where the sender will be debited and the receiver will not be credited for hours and this has caused a lot of problems for them. Secondly, most of those neobanks do not charge arbitrarily. Most of them do not even charge the sender the sending charges and the receiver the receiving charge that conventional banks charge. 

The issue of a receiver not getting credited immediately after a sender or buyer transfers money was a big problem that needed to be fixed. It stalled commercial and economic activities. Some cab riders, Uber drivers and even market vendors have gotten into fights with their passengers over this issue. Some people have been embarrassed and left stranded over this problem. So once everyone heard that there is a bank that the users get credited to immediately the sender transfers the money the flood gate was flipped open. 

As for the second problem of incessant charges. Neobanks fixed that as well. Users testify that they do not get the end-of-the-month charges, card maintenance charges, VAT charges, transfer charges and whatever other charges conventional banks use to rip their customers off. 

To add sugar to already sweet tea, some of these neobanks as well have features of letting their customers who are out of cash to borrow money using the app and pay back the money gradually. You can borrow without providing collateral, or a guarantor or without going through the unnecessary stress that conventional banks subject customers who want to borrow. 

More so, opening an account with a neobank is very easy. It is as easy as opening a social media account. I opened an Opay account the other day and I was amazed at how fast and easy it was. That same day I was able to carry out transactions inside that app immediately after I finished creating the account. Unlike conventional banks where it takes a lot of form filling and requesting of documents upon documents just to open an account and after you open, you will have to wait for some weeks before you are able to withdraw money out of the account. 

The “killer feature” of a neobank like Opay is the feature of your mobile phone number becoming your bank account number once you sign up. That was the most attractive feature for me. Now I don’t have to cram numerous ten digits of bank account numbers since my mobile phone number is my bank account number.

Finally, I have never seen or heard that the mobile apps of these neobanks experienced a glitch. Unlike conventional banks where the app and the Ussd will stop working for a whole day. In fact the reason that forced me to abandon my conventional bank accounts and go for a neobank is that the conventional banks are always getting me stranded. Two of my bank apps stopped opening for the whole day and I was stranded. I was complaining about it and someone suggested I go for a neobank. I heeded that suggestion and they have not failed and I have never looked back ever since.

For someone like me who prides himself as an old school to migrate from using conventional banks to neobanks it is a pointer that the neobanks are really doing things right, fixing problems that conventional banks are not fixing.

I know it is not a wild dream for me to imagine a scenario where in the coming years, conventional banks will lose all their customers to neobanks. I can bet on it that if conventional banks do not sit up and introduce most of these killer features that are already in use by neobanks and especially fix their mobile and internet banking they will lose all their customers.

The world has gone digital and customers want things quicker, easier and without stress. It’s no longer the case where customers will have to queue up in banking halls just to carry out a transaction. Some conventional banks are adjusting themselves to become challenger banks.