E-Financial

Six Cardinal Sins affecting ATM Accessibility in Nigeria.

Published

10 years ago

July 5, 2016

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“Bauchi Deputy Governor Can’t Access Cash At ATMs”, the headlines screamed on Jul 1 2015. Apparently, there was no money in any of the three ATMs that the Deputy Governor tried, just to access N20k, according to a statement by the Permanent Secretary, Rabi’u Bello.

ATMs are the most popular channel for bank customers
This is indeed a sad commentary for banks in Nigeria, especially against the backdrop of the recent NOI polls on Bank Financial Channels in the country, which revealed that ATMs were the most visible proceed of the banking sector reforms to Nigerians.

According to the survey, of all the bank channels, customers used ATMs 68% of the time compared to just 6% for Internet Banking and 6% for Point Of Sale terminals (PoS) respectively, with most customers using the ATMs more than once a week. The ATM has assumed great importance as the barometer of a bank’s brand as far as customers are concerned.

It is therefore difficult to phantom why banks have not taken advantage of this ubiquitous channel to enhance their brand value and gain customer loyalty.

Given that my company is an active player in the industry as a Value Added Reseller of Wincor-Nixdorf ATMs, I feel obligated to disclose my interest; but it is this same vantage position that affords me the insight to comment on this passionate issue bedeviling Nigeria’s bank customers.

The Six cardinal sins
In my view the unavailability of Banks’ ATM are predicated on six cardinal sins namely; Suboptimal Support Strategy, Low Spread, Low Penetration, Old Systems, Dirty and Mutilated Currency notes, and Techies running the show instead of business savvy personnel.

Suboptimal Support Strategy
The major culprit of ATM unavailability is the suboptimal support strategy of most banks. They are suboptimal because they usually fall on the sword of ‘penny wise and pound foolish’. Consider the following scenarios; a situation where by merely installing appropriate monitoring tools provided by the manufacturers, ATMs can be remotely diagnosed and most times proactively, before a fault occurs. In this situation the fault can be trapped and fixed before it occurs, or in the case where a fault has occurred, the engineer appears at the site with the appropriate spare part, rather than make two trips, one to diagnose and the second to carry the right spare part to fix the problem. By saving on the investment on the monitoring tool, the bank is losing much more on the opportunity cost of unearned fees and more importantly, on brand impairment.

Most banks opt out of weekend support for ATMs in order to save support money. This is akin to cutting down on cleaning at the cinemas at the weekends. This is just so counter intuitive. During the week, the ATM infrastructure benefits from the widespread support from the branches where they are located. The bank’s custodians ensure that the surround environment such as power and networks links are available, and any cash jam or out of service issue is quickly resolved or escalated to the support company. It is during the weekend when that support structure is unavailable that ATM attendance is most required. And it is precisely this critical period that banks chooses not to support their ATMs in order to save cost. What ostensibly happens is that the ATMs breakdown, being mostly mechanical devices, and there is no opportunity for any call-out to repair them. The ATM faults are piled up and reported en-block to the support company first thing on Monday morning, but they become overwhelmed because this bucks the trend of faults forecast under normal circumstances for which they would have been prepared. Being saddled with a ton of faulty ATMs simultaneously is not normal and inadvertently results in shortages of ATM Spares and long wait times. To compound issues, the banks typically do not make it easy for the support partners to have spares on hand by, insisting on maintenance payment in arrears. Maintenance payments in advance will greatly help sufficient spares procurement and readiness to attend to faults on time.
Another ‘catch 22’ situation in the support strategy relates to access of the ATMs for maintenance purposes during the weekend, in the few cases where banks have signed for weekend support. There is the dilemma of having the two people who each have an access key for the ATM, to both be on site, as the keys are simultaneously required to open the ATM from a security perspective. Many of the custodians live very far from the ATMs which keys have been entrusted to them, and so there is an inherent wait time for them to make the long journey to the ATM to open it for the support personnel to have access for repairs, or even for cash loading in the case of a cash out. It may be expedient to zone ATM keys to custodians who live close to the particular ATMs, or make adequate alternate arrangements.

Low Spread
The second cardinal sin is the poor distribution of ATMs across the country, with most of them concentrated around the 5,000 odd bank branches. Going by the statistics of the Central Bank of Nigeria (CBN) that there are 12,000 ATMs in Nigeria, and following the trend of at least two ATMs per branch, leaves only 2,000 ATMs to be distributed across all the other locations requiring cash dispensing in Nigeria. Typically, ATMs should be liberally placed around high footfall areas such as Malls, Markets, Petrol Stations, etc. The realities of distributing only 2,000 ATMs across all these areas are quite stark; not enough to go round. Barely enough to provide two ATMs each, for our 774 Local Government Areas.

Low Penetration
And this leads to the third cardinal sin, low penetration of ATMs where they exist. The story was told around Christmas of 2013, where the only ATMs that seemed to be working on the whole Gbagada axis were the couple at the Charlie Boy Bus stop. Of course the queue had built up to the extent that faint hearted customers rather opted to go without cash than risk the possible consequences of a stampede. The problem could be solved by providing appropriate number of ATMs per location based on a study of the queues. If the intention is to keep the customers from crowding the banking halls, it seems to me a circular argument bickering about the ATM and support costs, because this has to be compared against the cost of a bigger branch and more tellers, with their attendant salaries and benefits should the customers be compelled to go into a branch for lack of adequate ATM channels. The ATM penetration in Nigeria is about 11.4 ATMs per 100k adult population. Comparatively, Indonesia’s penetration of about 37 ATMs per 100k adult population is over three times that of Nigeria. South Africa has 60 ATMs per 100k adult population, while the UK has 124 ATMs per 100k adult population

Old systems
The fourth cardinal sin is over-flogging the ATM well past its ‘use by’ date. Many senior bank officials will typically have their official cars changed after every four years (the ATMs are much less than half the costs of the status cars of the banks’ middle management staff), yet even where statistics show that the cost of repair of a consistently failing old ATM is unsustainable and will be cheaper to replace, there is a deep reluctance to do so. This could perhaps be because the support partners aren’t given the opportunity of slab pricing, where they charge a higher support premium for very old systems. In the end, every shortcut gradually catches up with us. The system is just not able to perform the function for which it was procured, and the customers bear the brunch.

Dirty and Mutilated Currency notes
The fifth cardinal sin is loading the ATM cassettes with currency notes not fit for that purpose. While it is understandable that it is not possible to always have crisp notes in the ATM, every effort should be made to sort and aerate the notes going into the ATM to ensure that that they are fit for purpose, and do not cause cash jams, which throw the ATM out of service, notwithstanding the amount of cash in it. It is common knowledge that bank staff and their friends do somehow find crisp notes for ‘spraying’ at social functions at the weekends. These are the kind of notes that should be loaded into the ATMs and not the unfit ones that will quickly fill the ‘reject bin’ and render the ATM out of service.

Techies running the show instead of business savvy personnel
The sixth cardinal sin which is not limited to banks, is the common mistake of promoting techies out of their area of competence and comfort to business managers. Techies should have their own growth tracks and should aspire to the highest specialist positions where they can continue to usefully contribute to the organization. Having said so, I have seen techies who have imbibed deep management skills and made the cross from the technical line to the business line. These are indeed rare breeds, whose background in both technology and business help them to make better managers. But having pure techies run important businesses such as ensuring that the over 76 million Nigerian bank customers consistently have ATM availability, and the managerial intricacies that this will demand, is not fair to them, nor to the customers. In todays’ cashless Nigeria, e-Banking is going to be the key to the success or failure of a bank, based on her ability to retain customers. The need for this critical Division to be appropriately manned cannot be overemphasized.

If we get these right, then the deputy Governor, and indeed every bank customer will have the true benefit of the use of their ATM cards.

Austin Okere is the Founder of CWG Plc, the largest Systems Integration Company in Sub-Saharan Africa & Entrepreneur in Residence at CBS, New York. Austin also serves on the World Economic Forum Business Council on Innovation and Intrapreneurship.

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E-Financial

Quest Merchant Bank Strengthens Market Position as GCR Revises Outlook to Stable

Published

2 days ago

May 27, 2026

Chike Onwuegbuchi

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Quest Merchant Bank Limited has strengthened its market position following GCR Ratings’ affirmation of the Bank’s national scale issuer ratings of BBB(NG) and A3(NG), alongside an outlook revision to Stable from Rating Watch Negative.

The ratings action marks a significant milestone for Quest Merchant Bank following a transformative period for the institution, reflecting renewed confidence in the Bank’s financial strength, market positioning, liquidity profile and future growth trajectory.

According to GCR, the revised Stable Outlook is anchored on Quest Merchant Bank’s sound risk profile, improved capitalization and strong liquidity, alongside the successful transition of the Bank’s ownership structure following its acquisition by EverQuest LLP after the divestment by FBN Holdings.

The rating agency also highlighted the Bank’s strong presence within Nigeria’s merchant banking sector, where Quest Merchant Bank accounted for c.30% of the sub-sector’s total assets as of 31 December 2025, reinforcing its position as one of the country’s leading merchant banking institutions.

Further strengthening the Bank’s outlook was the successful completion of its ₦42.9 billion capital raise in March 2026 in line with the Central Bank of Nigeria’s revised minimum capital requirements. GCR noted that the capital injection is expected to further enhance the Bank’s capital adequacy position and support the next phase of business growth.

Quest Merchant Bank’s asset quality and liquidity profile also remained key strengths underpinning the ratings affirmation. The Bank maintained a NPL ratio of 3.2%, significantly below the broader banking industry average, while continuing to sustain strong liquidity metrics and resilient earnings performance.

GCR additionally recognised the strategic value of the Bank’s relationship with Custodian Investment Plc, noting the potential for expanded business opportunities, operational synergies and stronger profitability over time.

Commenting on the development, Afolabi Olorode, Ag. Managing Director/CEO, Quest Merchant Bank Limited, said: “This outlook revision is a strong signal of confidence in the future of Quest Merchant Bank and the progress we have made in strengthening our organization over the last year.

“Beyond the ratings action itself, this recognition reflects the resilience of our business, the quality of our balance sheet, and the confidence our clients, partners and stakeholders continue to place in the Bank.

“We have emerged from a defining transition period stronger, well-capitalized and better positioned to capture the opportunities ahead. We remain committed to delivering innovative solutions, creating long-term value and supporting economic growth across the sectors we serve.”

The Stable Outlook reflects GCR’s expectation that Quest Merchant Bank will continue to maintain sound asset quality, stable funding and strong liquidity metrics over the next 12 to 18 months, further reinforcing confidence in the Bank’s long-term strategic direction and operating fundamentals.

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E-Financial

History as NAICOM Licenses First Insurtech Firm under New Reform

Published

2 days ago

May 27, 2026

Ebere Melum-Nwogbo

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National Insurance Commission (NAICOM) has granted an operational licence to CBI Partnering Insurtech Ltd, making it the first fully licensed partnering insurtech company in Nigeria.

History as NAICOM Licenses First Insurtech Firm under New Reform

An insurtech firm is a company that leverages modern technology—such as artificial intelligence, big data analytics, and the Internet of Things (IoT)—to make the insurance model more efficient.

This is line with Nigeria’s evolving insurance regulatory framework.

Insurtech also streamlines operations like underwriting, risk assessment, and claims management.

According NAICOM, the development reflects its commitment to promoting innovation while maintaining market integrity and protecting policyholders.

In a statement issued on Tuesday, NAICOM said the licence was formally presented to the company during a handover ceremony where the commission reaffirmed its dedication to innovation, regulatory reforms and consumer protection within the insurance industry.

The commission noted that the approval comes amid efforts to modernise the sector through the implementation of the Nigerian Insurance Industry Reform Act 2025 and the introduction of specialised guidelines for insurance technology firms.

“The National Insurance Commission has formally granted an operational licence to CBI Partnering Insurtech Ltd, marking a significant milestone as the first fully licensed Partnering Insurtech company in Nigeria.

“This development underscores NAICOM’s regulatory leadership in fostering innovation within a structured and consumer-focused insurance ecosystem,” the statement read.

Speaking during the ceremony, Mr Ekerete Ola Gam-Ikon, deputy commissioner for Insurance, Finance and Administration, said NAICOM was taking deliberate steps to align Nigeria’s insurance market with global standards.

According to the statement, Ola Gam-Ikon referenced the recent enactment of the Nigerian Insurance Industry Reform Act 2025, alongside the commission’s insurtech guidelines, as critical measures aimed at driving transformation within the industry.

He stated that encouraging innovation within a strong regulatory framework remains one of the commission’s strategic priorities.

The deputy commissioner stressed that the licence was issued subject to strict compliance with regulatory and ethical requirements, adding that innovation must be pursued alongside adequate consumer safeguards.

He further noted that Nigeria’s regulatory approach to insurance technology was attracting growing international recognition, particularly in the use of digital solutions to accelerate insurance penetration and sectoral growth.

Presenting the licence to the company, Ola Gam-Ikon was quoted in the statement as saying, “This milestone reflects the Commission’s commitment to responsibly nurturing innovation across the insurance value chain. We congratulate CBI Partnering Insurtech Ltd and expect full compliance with all applicable regulations.

“This licence carries an obligation to uphold the highest standards of governance and ethical conduct. NAICOM remains committed to supporting the growth of insurtech while protecting the interests of Nigerians.”

The commission explained that the licensing of CBI Partnering Insurtech Ltd demonstrates its readiness to support technology-driven business models capable of expanding access to insurance products while ensuring adherence to regulatory standards.

Responding to the licence approval, Suleiman Olalekan Ajani, managing director, CBI Partnering Insurtech Ltd, commended NAICOM for its regulatory guidance and the rigorous licensing process.

Ajani said the company would leverage the regulatory framework provided by the commission to deepen partnerships and deliver innovative insurance solutions focused on customer protection.

“We are honoured to receive this licence from NAICOM. The Commission’s robust regulatory framework provides the foundation for us to scale strategic partnerships and deliver technology-driven insurance solutions that prioritise consumer trust, transparency, and protection,” he said.

The licensing marks a significant step in NAICOM’s efforts to integrate innovation into Nigeria’s insurance ecosystem while ensuring that emerging technology-based operators remain subject to appropriate governance, compliance and consumer protection standards.

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E-Financial

Cardoso Rejects Return to CBN Intervention Era, Warns Against Old Policies

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2 days ago

May 27, 2026

Ugo Onwuaso

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Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has cautioned against renewed pressure on the apex bank to return to intervention programmes previously implemented by the institution.

Cardoso Rejects Return to CBN Intervention Era, Warns Against Old Policies

CBN

Cardoso said such programmes distorted the bank’s financial position and weakened the effectiveness of monetary policy.

He spoke on Thursday during the opening session of the Monetary Policy Committee (MPC) workshop in Abuja, where participants discussed strategies for strengthening monetary policy effectiveness and achieving sustainable macroeconomic stability.

According to a statement issued by the CBN on Sunday, Cardoso said the credibility gradually being restored to the apex bank over the past two and a half years was due largely to its return to orthodox monetary policy tools anchored on transparency, discipline and market confidence.

“The credibility we are now rebuilding and the progress achieved over the last two and a half years stem largely from returning to orthodox monetary policy anchored on transparency, policy discipline and market confidence,” he said.

The CBN governor noted that intervention programmes implemented in the past weakened policy transmission mechanisms and blurred the line between fiscal and monetary responsibilities.

He stressed that the apex bank would continue to prioritise transparency, evidence-based policy decisions and institutional reforms aimed at sustaining macroeconomic stability.

Cardoso said the bank had recorded progress in strengthening internal processes and improving policy coordination, adding that decision-making within the institution was increasingly guided by data analysis, technical evaluations and structured deliberations.

He also said the apex bank had improved communication with investors, businesses, financial markets and the public to make monetary policy direction more predictable and easier to understand.

According to him, the reforms are part of the bank’s medium-term transition towards a clearer inflation-targeting framework focused on price stability.

“These efforts are part of our medium-term transition towards a clearer inflation-targeting framework that places price stability at the centre of monetary policy,” he said.

Cardoso said the transition would require deeper institutional reforms, stronger collaboration among economic institutions and sustained technical work.

Reflecting on the challenges inherited by the current management, he said the CBN faced serious institutional and policy difficulties at the beginning of the administration.

According to him, the bank’s autonomy had weakened, confidence in monetary policy had declined and there was excessive dependence on non-conventional monetary tools.

He described the foreign exchange market at the time as opaque and inefficient, while weak coordination between fiscal and monetary authorities reduced the effectiveness of economic policies.

“These structural issues contributed to rising inflation, exchange-rate instability and declining investor confidence,” he said.

Despite the challenges, Cardoso said reforms introduced by the current management had started yielding positive results.

He said the CBN had restored a more orthodox monetary policy framework under the current MPC structure, relying more on traditional policy tools and the Monetary Policy Rate to control inflation and manage economic expectations.

The governor added that improvements in liquidity management, policy communication and forward guidance had strengthened transparency and boosted investor confidence.

While acknowledging that inflation remained elevated, he said there were early signs of moderation.

Cardoso also noted that reforms in the foreign exchange market had improved price discovery and reduced volatility, while stronger policy coordination had enhanced Nigeria’s resilience to external shocks, including geopolitical tensions in the Middle East.

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