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Internet-driven change in customers’ behaviour fueling investment in banking Apps

…As banking operations shift from physical structures to online

There are strong indications that with the trend of things, many banking groups are gradually dropping investments in physical banking halls with massive investments in banking software, technologies and digital applications.

Giving an insight on the emerging paradigm shift, the Managing Director of BCX, an end-to-end digital solutions company, Mr. Ayo Adegboye, linked the observed huge investments in banking technology to a change in customers’ behaviour as a result of an increase in Internet penetration, smartphone and technology adoption and the Central Bank of Nigeria’s cashless policy.

This is as the Managing Director of Upperlink Limited, a software development firm; Mr. Segun Akano has noted “Banking operations are going beyond the physical structures to online. And to offer efficient services online, they need to invest in software that will make it easy for customers to use. A lot of them use Microsoft servers and operating system, and they need to pay service charge yearly to vendors on their core banking software”.

According to Adegboye, many banks are noiselessly restructuring the formats of their service deliveries relying on the surge in customers’ thirst for digital banking innovations.

While observing that the future of banking services remains innovative software Apps, Adegboye averred that “These providers should be one that offer flexible and functional solutions that can be easily updated or upgraded without having to initiate overwhelming projects for upgrade task, which can often prevent or delay prompt update or upgrade”.

According to him, “It has become very important for banking applications to be up-to-date so as to mitigate against the constant evolving threats facing financial institutions as they were mostly targeted by hackers stealing customers’ information or slowing down banking operations.

“It is crucial not to neglect update of banking software as it makes the system an easy target for cyber attacks. I know of some Original Equipment Manufacturers that publish security advisory notes to their partners, customers and distributors as often as required and provide software updates that address known vulnerabilities,” Adegoye added.

He averred that “Emerging technologies that would shape innovation in banks in the coming years were clouding computing, big data and analytics, robotics process automation, Artificial Intelligence and Internet of Things.

Available statistics showed that aside salaries, the bulk of operational expenditures borne by banks came from sourcing, deploying and upgrading innovative software.

For example in Access Bank, the group had deployed new software worth N2.62bn, against N2.57bn in the first quarter of the previous year.

Also, Zenith Bank’s investment of N1.41bn in software in the first three months of the year reduced by 16 per cent compared to N1.68bn in the same period of 2017.

Whereas Jaiz Bank, which invested N139.33m in the procurement of software in the first three months of 2017, reported a reduction by 57 per cent in software spending (N59.39m) from January to March 2018, the GTB’s software purchase dropped by 97 per cent from N2.73bn spent in the first quarter of 2017 to N86.79m in the first three months of this year.

Details from the Sterling Bank’s financial statement showed that about N7m was invested in procuring new software in the period under review as against N45m in the first quarter of 2017 as the FCMB’s spending on computer software dropped by 76 per cent from N329m in the first quarter of 2017 to N78.64m in the three months ended March 31, 2018.