The cashless banking initiative of the Central Bank of Nigeria (CBN) is being hindered as the Nigerian banks continue to experience technology skills gap due to a brain drain that is consuming experienced tech personnels in the sector, LEADERSHIP can exclusively reveal.
Findings showed that the IT department of most of the banks are now manned by inexperienced hands who cannot cope with the traffic on internet banking platforms. According to sources, although, hike in brain drain in the banking sector started after COVID-19 pandemic, precisely, 2021, the banks were managing the situation, until the Naira redesign policy of the apex bank kicked off early this year, hence, spiking the rate of usage of electronic and mobile banking platforms for banking transactions, a development the current personnel manning the IT backend of most banks are struggling to cope with.
The CBN had, in October 2022, announced its intention to redesign the nation’s currency, as effort to check terrorism financing, counterfeiting and imbalances in the fiscal space, to enable the apex bank take control of the currency in circulation and to move the country into a full-fledged cashless economy, initially, by January 31st, 2023.
Since the beginning of this year, when the policy was fully implemented, Nigerians have cried out over the fact that they could barely laid hands on the new naira notes, which is the only legal currency now accepted in the economy, due to insufficient cash in circulation.
This, in turn, has forced Nigerians to turn to internet banking system for their transaction. This could have been the means to moving the economy to a cashless economy, stakeholders have said, even as they lamented the poor network, infrastructure deficit and inexperienced tech, that have marred the policy in recent time.
The CEO, Precise Financial System, Mr Yemi Okeremi told LEADERSHIP, that the banking technology in Nigeria is fairly sophisticated, with respect to the country’s level of development.
Okeremi added that the naira redesign, leading to little cash in circulation and surge in the use of internet banking system, has caused more harm than good, as the fragile infrastructure put in place by the banks have further depleted as a result of traffic.
He said, “For me, we are not ready for the cashless policy. Before this time, we had enjoyed fairly good internet and mobile banking and that is because the banks had scaled up based on what was on ground. They know the number of Nigerians who have signed up for their internet banking services and they also have idea of the Nigerians that are banked and have put infrastructure in place to service them.
“All of a sudden, the CBN then came up with the idea that all Nigerians must go cashless. This is like double of the figures that were using their internet services. There are many Nigerians who have accounts with banks, but not using their internet banking services. These set of people were forced to start using internet banking overnight, which has slowed down servers, thereby delaying transactions or even declining them.’’
He also said that many tech experts have left the country for greener pastures, leaving the less experienced personnel to manage the infrastructure in the bank. He said, ‘‘Most of these fresh graduates do not know the nitty-gritty on how to manage some of the software and hard ware used in the banking sector. Also, poor internet connectivity has marred the seamless transition to cashless, in the sense that, for cashless policy to work, people must transact and receive alert immediately.
“In essence, infrastructure deficit, brain drain, and social problem, whereby every Nigerians now want to use internet banking at the same time are the reasons why Nigerians are having issue with internet banking.’’
He however urged CBN to reconsider its decision. “We know cashless process is great for any economy to grow, however, CBN would have been gradual in the process of turning the Nigerian economy into cashless economy. The banking sector is doing the best they can do, because nobody envisaged the traffic of internet banking. I must commend them, however, I would appeal to them to scale up, to meet this present challenge.
“On broadband connectivity, the telecoms sector is doing its best, in that the industry is planning to scale up broadband connectivity level to like 70 per cent by 2024. If that happened, people will be able to receive alert of transaction on time,” he stated.
In the same vein, head, operations, Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbolahan Awonuga, has urged the banking sector to upgrade their capacity. Awonuga said, “What the government is doing now is that they want a total cashless environment. We are taking about digital economy, but there must be some level of preparation. The bank should be able to accommodate the traffic flow of their customers.
“If everybody should go into cashless, the internet platforms of the banks should be able to manage the traffic. The reason we are experiencing delay in transaction or declined transaction, is because there are lots of traffic at the backend. People want to do internet banking at the same time, however, because of the capacity, they cannot enter at the same time.”
He advocated for more partnership with fintech companies. Awonuga disclosed that there are some few fintech companies who are working with banks to ensure seamless online internet banking, while calling for more to join as effort to salvage the current situation.
Speaking with LEADERSHIP, the president of the Chartered Institute of Bankers of Nigeria (CIBN), Ken Opara, noted that the industry is currently suffering from talent drain. He said, “There is a whole lot of resignations and people leaving the industry particularly the younger ones. The figure is quite high. You train and then immediately you train them, they leave the country and then you start all over again. It is a real challenge. The banking industry is losing a lot of younger ones. It is affecting the pull of manpower particularly the younger ones.
“They are moving in large numbers outside the country. We are experiencing a pull of people out of the industry to outside the country and these are the younger ones that we are supposed to hand over to after a period. So, succession planning is hindered, productivity is lowered because these guys are the next generation of people. That is also slowing down activity.”
Also, Head, Financial Institutions Ratings at Agusto & Co, Ayokunle Olubunmi, affirmed that the mass exodus is impacting the succession plan in the banking industry.
He said, “Some banks are already having issues with their succession plans, so they are ensuring that, for each role, they have two to three people that understand it. So, if someone leaves, there is another to take over. It is not only the banking industry that is challenged, it all of the sectors of the economy from manufacturing to insurance and banking industry. The challenge is such that it is not even the lower cadre that is moving out, it is middle management and even in some cases upper management. A lot of companies are losing their best hands and even their technical hands.
“Zeroing it down into the banking industry, one area that is actually affected the most is the tech guys. Remember that a lot of banks are actually moving into digitization. So, people are losing their tech guys. Unfortunately, it is not a skill that is readily available like that. The talent pool is not that vast. The tech guys are moving to Canada and Europe. So, that has significantly affected them. It is such that in some banks, departments have lost a lot of their staff. All banks are affected and that is why you see all of them recruiting. This is how bad it is. For the banks, they actually have to manage it, because unfortunately as a bank, changing the trend is outside their purview. For banks, it is now about how you can actually adapt.”
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