Wednesday, 24 July 2024

Access Bank Nigeria edges African peers in digital banking services

5 min read

By Chris Kapfer

The bank created a strong digital active client base from its acquisition of Diamond Bank which had a large retail portfolio and strong digital platform.

Access Bank Nigeria is one of the largest financial service conglomerates in Nigeria with core expertise in corporate banking and capital management. Retail banking contributed 18% to total group revenues before its merger with Diamond Bank in 2019. Access Bank’s ambitious plan to build a much larger business footprint to become one of the top five banks in Africa required managing better some of the liquidity and funding pressure. A larger retail business became paramount along this growth trajectory.

In 2019, Access Bank acquired Diamond Bank’s large retail portfolio and strong digital platform. By the end of 2019, the merger created one of Nigeria’s largest banks with over 30 million customers and total assets of $20 billion.  In the same year, its retail business (excluding MSME banking) expanded nearly five-fold from $128 million to $625 million contributing eventually 34% to the group revenues. The merger provided a wider customer pool of both salaried and self-employed access to the bank’s full range of lending products such as personal loans, school fees advance, vehicle and asset finance and home loans.

The bank wants to grow to 100 million customers by 2023 and establish presence in 22 African countries over the next five years. Access Bank’s recent expansions into Kenya, Guinea, and the Republic of Cameroon are the first steps towards its African gateway.

Access Bank commands a digitally active base of 39% and generates more than $2 million in digital microloans daily primarily under its USSD and WhatsApp platform as well as the ‘Quickbucks’ app on a smartphone, contributing 90% to its overall personal loan business. The bank onboarded more than 80% of its customer via USSD and smartphone app.  Its efforts in building a digital ecosystem focus on payments, including FacePay and Whats App banking. The bank digitised over 75% of service requests and transactions including investment bookings, cardless cash withdrawal and instant loan processing for salary-based accounts.

Access Bank uses WhatsApp banking to perform functions such as account opening, balance enquiry and request for a payday loan. This has led to over 73% increase in transaction count and an 83% rise in transaction value between 2018 and 2019.

It launched an instant fund transfer product to simplify global and regional payments for person-to-person (P2P), business-to-business (B2B), person-to-business (P2B), government-to-person (G2P) and other payment activities. Access Bank has leveraged its extensive partner network to extend the reach of Access Africa to about 15 countries which include UK, France, Germany and China.

Its mobile and internet banking transaction value increased 5.6 times in 2019 year–on-year (YoY). Transaction volume increased by 193% YoY.

Addressing rising complaints after the merger

Access Bank’s merger with Diamond Bank saw an increase in customer complaints. E-payment disputes were in particular at the top of complaints, with the majority attributed to failures on third-party terminals or platforms. Failed transactions via e-payment platforms have become a major friction point between customers and their financial institutions in Nigeria given the increased adoption of alternative channels to cash transactions. Resolution and reconciliation can take several days.

To address the issues, the bank created the contact centre ombudsman, a 24/7 help desk established to improve the speed of resolving failed e-transactions complaints reversing failed customer transactions within 24 hours. The bank also raised the level of the transaction value that can be reversed.

Digital customer onboarding via three key channels

Like most  banks  in Nigeria,  Access Bank has a USSD platform that is used to onboard customers digitally such that customers can open accounts and perform financial transactions from their phone using *901# code. Its newly launched mobile app for customers of the combined entity offers full account opening, allows for secure payment and authentication using FacePay and fingerprint, QR payment and Instant International transfer (Access Africa). The bank was able to provide extensive financial services to the last mile especially in the rural and semi-urban communities with the help of more than 21,000 agents.

Early days in collaborating with fintech

Africa Fintech Foundry (AFF), the arm of Access Bank, was established to scout for partnership opportunities with fintech.  The objective of AFF is to source, train, mentor and invest in start-ups by supporting promising fintech to enable them to thrive and scale successfully in early days of yielding any business impact.

Assessing the digital journey of African banksBased on a 10-dimensional balanced scorecard which takes into account a player’s critical digital components such as its revenue, growth and size of the mobile user base, the ability to collect deposits via digital channels, the number of sizable ecosystems, fintech collaboration and application programming interface (API) infrastructure, as well as data centre efficiency and big data use cases, Access Bank Nigeria achieved 19.4 out of 50 points.

The Nigerian retail banking sector is one of the most digitised financial services industries in Africa. Thirty-five percent of Nigerian transferred funds were done through mobile banking in 2019 according to a KPMG survey. A series of digital-only banks emerged since 2017. Wema (Nigeria) opened the country’s first-ever fully digital bank named ALAT in 2017. Kuda, a stand-alone digital fintech bank from Nigeria, was launched at end of 2019, and V Bank run by VFD Group, an investment company, in February 2020. ALAT offers a couple of salary-based and a collateral free microloan to individuals and small and medium enterprises (SMEs) with flexible repayment options. All three digital-only platforms have yet to become profitable. The other contender for the best digital bank in Africa is Kenya Commercial Bank (KCB) which operates one of the largest mobile money platforms in Kenya. It said 78% of all the bank’s transactions are performed via mobile banking generating $90 million in revenues as of 2019, a three-fold increase from 2018. Its 2019 earnings, however, were affected by a tripling in loan loss provisions, weighed down from runaway mobile phone-based loans in the SME and micro segment standing at 14.4%. KCB has an Android score of 4.2 compared to 3.3 for Access Bank and 3.9 for ALAT.

Access Bank scored better due to its strong digital performance with the combined Access Diamond Bank entity and was ahead in the size and level of its digital user base. It also opened more digital accounts per month than any of its peers in 2019. However, the lack of ecosystems beyond payments, lack of big data use cases, data centre inefficiencies contributed to significantly lower scores compared to its international peers such as WeBank and Ping An in China and Liv by Emirates in the UAE. The ultimate aim for banks in Africa is to build an ecosystem that integrates microservices and APIs of complementary business partners to deliver a more robust platform effect. In technology and processes, Access Bank’s robust score compared to some of the top 10 digital banks in Asia and the Middle East is driven by its high level of public and private cloud usage. 

Creating an African payment gateway

The bank is focused on growing its retail footprint and create a universal African payment gateway. With the emergence of the new enlarged entity, the bank is better-positioned to cater to the retail business through a broader reach and product offering supported by its strong digital customer profile. But the bank has yet to capitalise more effectively on its size and digital strength, with customer perception in branch and digital channels the most critical aspects to address in its post-merger improvements.

SWOT Analysis


  • One of the largest financial services groups in Nigeria after its merger with Diamond Bank
  • Acquired Diamond Bank with its retail portfolio and expertise in 2019
  • Strong front-end digitisation in regards to personal loans and account opening
  • Curated a strong level of digitally active customers
  • Sound financial performance in 2019 including risk management


  • Drop in customer care and service quality post-merger in  branch banking and  digital services
  • Limited ecosystem, mainly in  payments services


  • Growing retail banking business
  • Increasing ecosystem  business
  • African payment gateway
  • Mobile banking services


  • Impact on retail brand if the level of customer complaints remain elevated
  • Prolonged COVID-19 crisis and economic impact

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