Fintechs Deploy Innovative Products to Lure Bank Customers

Sunday Ehigiator

Nigeria’s financial sector is witnessing a major shift as retail and small- to medium-sized enterprise (SME) customers increasingly adopt fintech platforms for financial transactions.The allure of fintechs lies in their speed, flexibility, lower costs, and digital-first solutions that conventional banks often struggle to deliver.

THISDAY findings showed that ride-hailing drivers, market women, small traders, and informal sector entrepreneurs are among the fastest adopters of fintechs.Unlike traditional banks, which demand lengthy onboarding, extensive documentation, and high transaction fees, some of those that spoke with THISDAY, said fintechs offer seamless, mobile-first experiences, instant account access, and customer-centric designs.

Some of the notable digital payment platforms that have seen increased patronage include OPay, Moniepoint, Sparkle, VFD, Palmpay, Kuda, among others.Customers said these digital platforms allows simple onboarding with minimal friction, low-cost transfers, integrated bill payments, and merchant services.

Market traders and informal workers say the platform saves them time and money. A Lagos-based market woman, Aisha Mohammed, told this reporter:“Before now, I had to queue at the bank for hours just to make a transfer. Now I can do everything from my phone. It saves me time, and I pay less.”

Tobi Adeyemi, a Lagos-based freelance designer, said opening an account with one of the digital banking platforms made it easier to separate her personal and business accounts.“I can send invoices, get paid, and manage expenses all in one place. Traditional banks can’t match that speed,” she explained.

Commenting on the trend in a chat with THISDAY, Head of Consulting at Agusto & Co, Jimi Ogbobine, said, “The operational efficiency consumers demand today is immediate recognition of value on their transactions; quick confirmations, reduced failures, seamless digital processes. Fintechs have proven more nimble than traditional banks in delivering this.”

He traces the shift to Nigeria’s 2023 demonetisation policy: “It wasn’t about the safety of the banks; it was about operational effectiveness. Consumers and SMEs migrated to platforms that could handle transactions promptly. Fintechs filled that gap, much like new-generation banks did when they challenged older banks on efficiency.”On sustainability, Ogbobine said: “The low-cost, high-speed service model is sustainable. Fintechs are moving from retail clients to SMEs, creating risk assets through lending, which enhances profitability and long-term financial stability.”

He cautioned, however, that “Fintechs need to strengthen internal processes. Scams and fraudulent transactions exploit weak KYC procedures. Regulators also need to ensure fintechs follow robust compliance frameworks to maintain trust.”

In response however, some traditional banks have launched their own digital platforms: Axis Bank’s Hydrogen, GTBank’s Squid, Wema Bank’s Alat, among others.Ogbobine predicts: “We’ll see both intensified competition and collaboration. Fintechs are venturing into lending, while banks improve digital efficiencies. Both sides are adopting each other’s best practices.”

Highlighting a growing concern, former President of the Chartered Institute of Bankers of Nigeria, Mr. Okechukwu Unegbu, said: “Fintech is popular, but fraud is increasing. Banks must retrain staff to be professional and committed. Many contract staff lack dedication, which exposes the system to fraudsters.”

He also warned about network infrastructure and inclusivity: “The sustainability of fintech services depends on reliable network connectivity. Many older or analogue-based users are vulnerable to fraud because they lack digital literacy.

“Regulators and lawmakers must create fintech-friendly laws. Currently, the legal system is too slow, which allows fraud to thrive. Banks and fintechs need collaboration with regulators and the judiciary to address these challenges.

“Fintechs need to strengthen internal processes. Scams and fraudulent transactions exploit weak KYC procedures. Regulators also need to ensure fintechs follow robust compliance frameworks to maintain trust.”

Looking ahead, Unegbu said, instead of the rivalry, traditional banks and fintechs, “should get together because they both suffer the various things I mentioned. They suffer a lot in terms of trusting us and all that. And this will not be good for them when people suspect that they are not doing the right thing.

“So I think they need collaboration with the judiciary, collaboration with the regulators, collaboration among all of them so that they’ll be able to fight a common battle that is affecting their operations.”

As fintechs continue to innovate, they are reshaping Nigeria’s financial ecosystem, offering more efficient, accessible, and customer-focused solutions. The competition is prompting traditional banks to modernise, while collaboration between fintechs, banks, and regulators may ultimately strengthen the sector’s resilience.

Instead of rivalry, banks and fintechs should unite to tackle trust, fraud, and operational inefficiencies together.