E-Financial
Report Predicts New Rounds of Banking Sector Consolidation
A report by McKinsey and Company has stated that digitalisation will enable Nigerian banks to achieve between 25 and 40 per cent cost-reduction.
The report also urged banks to plan for another round of consolidation in order to thrive beyond the crisis by growing their capital base faster than the rates of inflation and devaluation of the naira.
It emphasised that another round of consolidation was inevitable given the need to meet Basel III requirements, manage the possible deterioration of asset quality and some foreign exchange-based commitments to service.
It also called for portfolio restructuring, warning that the Nigerian economy could not afford another portfolio crisis, which is likely to occur.
The report titled, “Nigeria’s banking sector: Thriving in the Face of Crisis and Bold Ideas to Help the Industry Build Resilience and Drive Long-term Sustainability,” also urged the Nigerian banking industry to boldly utilise the lessons it learnt from the COVID-19 pandemic disease interruption to drive sustainability in the industry.
It argued that bold thought and actions were required beyond the crisis, even as it enjoined banks to continue with their adjustment to a remote operating model, revisiting portfolio priorities and some valuable lessons in order to adapt to the “next normal.”
It also recommended four bold initiatives that would enable the lessons of the past few months to drive sustainability in the banking industry beyond the COVID-19 crisis.
The four dimensions, according to the report, are scale, efficiency and productivity, data and analytics as well as talent hunt.
It stated that scale could be achieved either by targeting specific market segment or geography to bring down marginal costs.
“In Nigeria, significant opportunities remain for banks to develop scale across segments–for example by targeting small and medium-size enterprises (SMEs), which have significant unmet needs in the banking sector–or by targeting geographies such as the north of the country, which has been historically underserved,” the report said.
The report also said that efficiency and productivity could be attained by transforming operating models to serve customers as they would want to be served.
“The McKinsey Financial Insight Pulse survey conducted in October 2020 found that most consumers expect to increase their use of digital and mobile banking services even after the crisis, with 53 percent of consumers wanting their banks to make it easy to get a line of credit and 36 percent desiring improved bank websites to facilitate online transactions.
“In Nigeria, we’ve also seen a surge in agent-banking transactions during the crisis, opening up new possibilities for delivering services to more people at lower costs. However, these shifts may reverse unless steps are taken to hardwire new behaviors and attitudes. Now is an opportune moment for banks to revisit and interrogate matters of efficiency and productivity in a disciplined manner.
“Actions taken out of necessity during the lockdown such as online training, virtual performance management sessions, remote working for certain jobs, and adjusted operating hours for branches could be refined for implementation on a permanent basis,” the report said.
The McKinsey stated that rethinking end-to-end digital options for card subscription and renewal, PIN reset, and electronic channel issue resolution, to name a few, could unlock new growth, adding that sales and lending processes, which have been heavily reliant on physical interaction, could be reviewed to identify automation potential, especially for SMEs.
“Ultimately, reimagining these processes in line with consumer requirements will lead to a redefinition of the role (and size) of the branch network and required coverage model,” it said.
The report also advocated for improved data and analytics by leveraging technology for commercial risk and operational effectiveness because rapid shifts in consumer behavior that is driven primarily by physical distancing have led consumers to embrace digital options at a scale and pace not seen before in the country.
“This, in turn, is clearing the way for banks to ramp up their use of data and analytics to enhance services and reduce costs. Previous McKinsey research has demonstrated that data and analytics can potentially increase a bank’s cost advantage by 10 percent and improve cost-to-income ratios by up to 15 percent, even in a recession,” the report said.
It suggested risk and sales as two immediate areas that could be explored and realised through digital marketing by developing new risk models that are powered by artificial intelligence and machine learning that improve accuracy and efficiency and leverage real-time transaction data to understand market and customer dynamics.
It, however, advised banks to find the best talents that could support their shift to digital operations as “the crisis has prompted dramatic shifts in working behavior–notably working from home models– that are opening up new avenues for banks to attract and retain the skills they need to support their shift to digital.”
The report said that banks could attract talents by improving on their employee value proposition, which is often perceived to be less attractive than those of technology companies that are competing for the same talent.
It also advised banks to develop capabilities for identifying and funding viable businesses within the intervention fund category; restructuring their funding base to reflect the realities of the current CRR impact and “use this opportunity to educate the frontline on the implications of CRR and the effective cost of every deposit.”
ChatPay has launched Africa’s conversational banking platform, enabling individuals and businesses to access financial services through WhatsApp.
The Lagos-based fintech startup, is in controlled rollout, connecting WhatsApp to linked-bank management, airtime and supported electricity payments through simple conversations.
The company said the platform is designed to enable users to send money, pay bills, buy airtime and manage business transactions within WhatsApp conversations, subject to the completion of regulatory approvals and integration with licensed banking partners.
According to ChatPay, the platform is operated by CP Technology Limited and is currently undergoing a phased rollout ahead of its planned public launch.
The company said the initiative is intended to simplify access to financial services by leveraging WhatsApp, which it estimates is used by more than 50 million Nigerians monthly.
Speaking on the idea behind the platform, Adeoluwasubomi Odebunmi, product lead and co-founder, said the concept emerged while she was studying Software Engineering at Babcock University.
“I saw the gap while I was still in school—how much friction there was just to move money. I didn’t want to just study the problem. I wanted to help fix it,” she said.
Odebunmi said she had previously worked on software solutions spanning e-commerce, real estate management, school administration and artificial intelligence applications before co-founding ChatPay.
Aseoluwa Siyanbola, growth lead and co-founder, said his experience managing Nigerian bank accounts while studying abroad highlighted some of the challenges users face with digital banking services.
According to him, difficulties such as one-time password (OTP) failures and inconsistent banking applications inspired the team to explore conversational banking solutions.
“We each encountered similar challenges and came together to build a solution that simplifies everyday financial transactions,” he said.
cAbraham William, tech lead and co-founder, said the company is focused on improving access to financial services through a platform that many Nigerians already use daily.
“We want to make financial services easier to access by allowing people to carry out transactions through a familiar messaging platform,” he said.
William said he oversees the company’s engineering, technology strategy and system architecture.
ChatPay said its services will be introduced in phases as regulatory requirements are met and integrations with banking partners are completed.
The company added that its newly launched “Founding 2,500” programme will enable selected early users to test features, provide feedback and participate in product development before the platform’s wider rollout.
According to the company, interested users can register for the waitlist and the Founding 2,500 programme through its website.
Founded by Odebunmi, Siyanbola and William, ChatPay said its long-term goal is to expand conversational banking services beyond Nigeria into other African markets after its domestic rollout.
United Bank for Africa (UBA) Plc has been named Nigeria’s Best Bank for Retail Banking and Best Bank for Sustainability Leadership (ESG) at the 2026 Euromoney Awards for Excellence, reinforcing its position as one of Africa’s leading financial institutions.
The awards were presented on July 17 at The Peninsula London in the United Kingdom, recognising financial institutions that have demonstrated outstanding performance, innovation, customer impact and sustainable banking practices.
The double recognition highlights UBA’s growing influence in retail banking and its commitment to advancing environmental, social and governance (ESG) principles across its operations.
According to Euromoney, UBA distinguished itself through a series of sustainability initiatives, including the introduction of a Green Financing Facility designed to support households and businesses transitioning to renewable energy.
The publication also cited the bank’s ₦5 billion financing programme, implemented in partnership with the Bank of Industry (BOI), to provide funding for women-owned businesses.
Euromoney further recognised UBA’s commitment to achieving net-zero carbon emissions by 2050, describing it as a demonstration of the bank’s long-term sustainability strategy.
The publication also highlighted the bank’s efforts to integrate sustainability into its operations through the deployment of solar-powered energy solutions across 50 branches and comprehensive ESG capacity-building programmes that have trained more than 16,000 employees across the UBA Group.
In the retail banking category, Euromoney noted that UBA continued to consolidate its position as one of Africa’s largest retail banking institutions.
According to the publication, the bank expanded its customer base to more than 37 million by the end of 2025, while retail banking revenue increased more than fourfold to ₦429.5 billion.
The awards also recognised UBA’s continued investment in digital banking innovation, particularly enhancements to its artificial intelligence-powered chatbot, LEO.
Euromoney noted that LEO became Africa’s first AI-powered banking platform to facilitate cross-border money transfers in local currencies through the Pan-African Payment and Settlement System (PAPSS).
Commenting on the awards, UBA’s Group Managing Director and Chief Executive Officer, Mr Oliver Alawuba, described the recognition as a validation of the bank’s commitment to delivering value to customers while promoting sustainable development across Africa.
“To be recognised as Nigeria’s Best Bank for both ESG and Retail Banking in the same year sends a powerful message that sustainable banking and commercial success are mutually reinforcing.
“At UBA, we are committed to financing Africa’s future, supporting businesses and communities, promoting financial inclusion, and delivering innovative banking solutions that improve lives.
“These awards belong to our customers for their confidence in us and to every member of the UBA family whose dedication continues to make our vision a reality,” he said.
Also speaking, UBA’s Group Head, Marketing, Brand and Corporate Communications, Mrs Alero Ladipo, said the awards reflected the bank’s unwavering commitment to putting customers at the centre of its operations.
According to her, every innovation, investment and banking solution introduced by UBA is aimed at creating exceptional value for customers while expanding access to financial services.
“These awards are a powerful affirmation of our Customer First philosophy.
“Whether it is supporting entrepreneurs with access to finance, enabling seamless digital payments, advancing clean energy financing or expanding financial inclusion across Africa, UBA remains focused on delivering meaningful impact.
“We are honoured that one of the world’s most respected financial publications has recognised these efforts,” she said.
UBA currently operates in 20 African countries, as well as the United Kingdom, United States, France and the United Arab Emirates, serving more than 45 million customers through a combination of digital banking platforms and physical branch networks.
The bank said it remains committed to strengthening financial inclusion, driving innovation and supporting sustainable economic development across Africa and beyond.
Nigeria Deposit Insurance Corporation (NDIC) has begun paying insured deposits to customers of the 46 recently failed microfinance banks.
Mr Thompson Sunday, managing director and chief executive, NDIC, disclosed this in an interview with the News Agency of Nigeria (NAN) in Abuja.
The interview took place on the sidelines of the International Association of Deposit Insurers Africa Regional Committee meeting.
Sunday said the corporation was using the Nigeria Inter-Bank Settlement System (NIBBS) and customers’ Bank Verification Numbers (BVN) for the payments.
He said the NDIC had traced depositors’ alternative bank accounts and credited them directly without requiring physical visits.
He advised depositors without BVNs to visit the nearest NDIC zonal office for verification and payment processing
“The CBN revoked the licences of the 46 microfinance banks on July 1, 2026,” he said.
He said the NDIC automatically became the provisional liquidator after the revocation, in line with the law.
Sunday said the corporation had commenced payment of the insured maximum deposit of N2 million to eligible customers.
He explained that further payments would depend on the recovery of the failed banks’ assets and outstanding debts.
He said proceeds realised from recoveries would be distributed as liquidation dividends to eligible depositors.
Sunday cited Heritage Bank, Aso Savings and Union Homes as examples of the NDIC’s prompt reimbursement efforts.
He said insured depositors of Heritage Bank were paid within four days of the revocation of its licence.
He added that customers of Aso Savings and Union Homes received payments within 72 hours.
“The law allows us 30 days, but we are working to surpass our previous records,” he said.
The Central Bank of Nigeria (CBN) revoked the banks’ licences for failing to meet regulatory requirements for continued operations.
The apex bank said the action was aimed at protecting depositors, strengthening financial stability and ensuring regulatory compliance.
Nigeria Leads Africa in Online Gambling Regulation – GCI
CBN Has Not Published Annual Financial Statements Since 2022 despite Legal Requirement
ChatPay Unveils Public Waitlist for WhatsApp-Based Banking Platform
GSMA Says High Smartphone Costs Threatens Africa’s AI Future
Dangote Refinery Completes Landmark $2.5bn Private Equity Placement
NRC, Ponzi Scheme Collapses Resulting Loss of Billions of Naira
NASENI Moves to Digitize CCB’s 5m Assets Declaration and Operations
Tokenization, Blockchain Technology will Transform Financial Institutions – IMF
EFCC Busts NIS Visa Overstay Racket, Uncovers N700m in an Account
From Scarcity to Scale: What Africa Can Learn from India’s Agricultural Transformation
General News2 days agoFG Launches C.L.I.C.K.D., Consumer Credit Scheme for Tech Devices
Telecom2 days agoAirtel Nigeria Expands Retail Footprint to Strengthen Customer Access Nationwide
Telecom2 days agoMTN Nigeria Opens Applications for Next Afrobeats Star Season 2 with Bigger Prizes
News2 days agoNPC Opens Nationwide Digital Birth, Death Registration Platform
Telecom2 days agoKaspersky Survey Highlights the Need for Smartphone Security
E-Business2 days agoOvaloop Technologies Unveils Digital Tools to Formalize SMEs Operations Across Africa
E-Financial2 days agoCBN Retains Interest Rate at 26.5% as Cardoso Cites Global Uncertainty Despite Inflation Drop
Telecom2 days agoWhy Africa’s Top ICT Ministers Are Gathering in Abuja This Week