Uzoma Dozie, chief executive officer of digital banking platform Sparkle says business without physical branches has been cost-effective during the coronavirus pandemic.
Mr Dozie launched Sparkle in 2019, one year after stepping down as CEO of the now defunct Diamond Bank.
With the coronavirus safety protocol and other bureaucracy making physical banking unattractive to many, digital banking has become the preferred option for many Nigerians.
“Seeing the impact of COVID and the fact that we might see a second wave or other pandemics tells us that we need to build resilience into our businesses, and that means being digital,” he said in a report published by Reuters.
Uzoma, however, said digital banks collaborate with “bricks and mortar” banks for the use of ATM machines.
His thoughts are echoed by Babs Ogundeji, CEO of Kuda Bank, another digital only bank without physical branch.
Launched in August 2019 with 500 customers, Kuda Bank has tripled its daily adoption of customers in a trend that began during lockdown in Nigeria’s main cities – Lagos and Abuja – from late March until early May.
Mr Ogundeyi said it had taken on around 3,000 customers a day from April, compared with just under 1,000 a day before.
“We expect the growth to remain,” he said, adding the pandemic forced many to overcome concerns about the safety of online transactions in a culture where a fear of financial internet scams has made people wary of abandoning cash.
Under Uzoma, Diamond Bank, grew its mobile app users from a little over 204,000 in 2014 to 3.3M by the end of 2018.
It took the bank almost 20 years to generate the same customer numbers via its network of branches.