COVID-19: First Bank Deepens Financial Inclusion Through USSD

Global disruptions caused by the Novel Coronavirus (COVID-19) pandemic have made individuals, organisations and countries to think out of the box to be able to survive in the various aspects of life. It has made them to make necessary adjustments.

In Nigeria, in an effort to curb the spread of the pandemic, President Muhammadu Buhari on March 30 locked down the Federal Capital Territory and Lagos and Ogun States.

The five-week lockdown brought to the fore the importance of the cashless banking policy initiated and implemented by the Central Bank of Nigeria (CBN) and made many citizens and other residents to embrace the initiative more.

The policy was introduced to reduce the amount of physical cash in circulation thereby encourage the use of electronic platforms for settlement or payment for goods and services.

Cashless policy introduced by the apex bank in December 2011 and kick-started in Lagos in January 2012, had been greeted with mixed feelings due to lack of deep understanding of its functionality.

However, with the closure of financial institutions during the lockdown, banks customers resorted to the use of Unstructured Supplementary Service Data (USSD) and other online financial platforms as advised by financial institutions.

A great benefit of going cashless is increased security for both vendors and customers. Cash has long been the target of thieves, and its removal has the potential to reduce crimes.

Cashless payments reduce errors and the cost of labour involved in processing cash.

The expenditure incurred in printing and transportation of currency notes is also reduced with cashless banking.

According to the CBN, cashless policy was introduced in line with the nation’s Vision 2020 goal of being one of the top 20 economies. It is aimed at driving development and modernisation of the Nigerian payment system as well as driving financial inclusion.

In line with the apex bank cashless banking initiative, First Bank of Nigeria Ltd., in 2015 launched *894# USSD mobile banking channel through which various banking activities are carried out on a mobile phone.

Analyst are convinced that the USSD banking platform supported many Nigerians during the lockdown to carry out various cashless transactions and services from the comfort and safety of their homes amid COVID-19.

A public affairs commentator, Mrs Obiageli Elemuo, says the banking channel promoted financial inclusion deeply during the lockdown.

She observes that many Nigerians who hitherto were not comfortable using the channel, for fear of fraud, resorted to using to it as a substitute for a physical banking hall.

She is of the opinion that even with banks’ re-opening of banking halls following gradual ease of the lockdown, many Nigerians are still opting for the channel so as to reduce handling of currency notes for fear of contracting COVID-19 through the handling.

Elemuo believes that the *894# USSD banking service is quick, convenient and easy to use, and gives instant notifications, thereby re-assuring customers.

According to Mr Chuma Ezirim, FirstBank’s Group Executive, e-Business and Retail Products, over 9.5 million customers are active on the platform at present.

He describes the service launched in January 2015 as user-friendly, noting that the channel can be used across the four major GSM network operators in the country without the use of the internet.

“Customers are able to enjoy a wide range of banking services using the bank’s *894# USSD banking.

“These services include fund transfers, data and airtime top-up for self and third-party individuals, quick balance enquiry and bank verification number enquiry,’’ he says.

The official says FirstBank is satisfied with the impact so far made by the platform.

“At FirstBank, we are excited about the impact our innovative solutions are making in the Nigerian payment landscape.

“Our *894# USSD banking has been a viable platform through which we take our banking services to the doorstep of our customers, right on the palm of their hands, without the limitation of an internet connection,” Ezirim says.

He gives the assurance that the bank will remain committed to creating avenues to enable Nigerians to carry out various financial activities conveniently and securely.

A customer of FirstBank, Mr Moses Igbrude, describes USSD banking as amazing, saying that the banking product helped him much during the lockdown.

He urges service providers to come up with initiatives that will sustain their operations and the nation in the midst of COVID-19 as well as make them stronger after the pandemic.

Another customer, Mr Ugochukwu Okoroma, believes that USSD banking promoted financial inclusion during the lockdown.

According to him, some Nigerians, who were compelled by the lockdown to use the channel, found it interesting and are willing to continue with it.

“It has been wonderful. I cannot remember the last time I visited the banking hall. I am enjoying the product very well,’’ he says.

Okoroma, however, advised banks to secure the platform adequately against hackers, adding that they should strengthen their complaint frameworks in case of failed transactions.