Cole: Banking tears in a cashless society (1)
THE banks depend on the GSM network, which has been glaringly inefficient and over subscribed, and shows no appetite for progress and efficiency because of a suspicious cosy relationship between the regulators and the GSM companies. Has computerization come before its time, I am not sure; but it’s alright for the young ones and hell for older folks: Makes no sense for old people. But how about banking in the villages, in this push for a cashless society?
How many banking accounts exist in Nigeria, now that we are moving to a cashless society? This is, on the face of it, surely a simple question. The answer is far from simple. I have asked all my accounts officers – no one has been able to tell me. I asked each one how many branches they had – no one knew exactly. As for how many accounts in each bank, my question was met with suspicion? It became an issue about why do I want to know. I called people in CBN – no luck. The Nigeria office of statistics had no answer. The search engines of Google, Wikipedia had answers, which contain many errors. World Bank had answers, which I cannot quote because my own people here cannot tell me simply how many bank branches and even their own capitalization figures. Since all our banks have or hope to have branches in the United Kingdom, the best source was there! There are nearly 5000 bank branches, total capitalization, total deposits.
Some Nigerians have been able to beat the pin number security code in the banks and there had been wholesale withdrawal of thousands from various accounts.
Spatial map of bank locations shows a concentration in the cities. With increase in computerization, even bank jobs, which are now beyond anyone who is not a graduate will be reduced. If I can access my account, pay bills, etc without going to my bank – what will happen to those hundreds of bank workers – over half will lose their jobs. Banking in Nigeria has progressed on the premise that all Nigerians are wired in to the Internet and that its clients are computer literate or have a GSM that has Internet capability. How does this work? By an application to the bank to use its Internet platform you can get Internet from your GSM Supplier but have you checked the price? Abonnema, my home, has one bank UBA; no post office, nothing – no Internet.
To open a new account, you need to show an International passport, (or photo ID) or a National Identity card, even a tax clearance certification. (The same conditions as in the United Kingdom). You need, also – wait for it – utility bill in your name; utility meaning a water bill, an electricity bill, etc. There is no electricity in my village, water we draw from wells. Even in Lagos, I cannot remember when I last saw a NEPA bill or any other so-called utility bill.
In UK the effect of computerization is that 50% of bank workers have lost their jobs; of the remaining, 25% are computer analysts, programmers and investment specialists. Is Nigeria ready for the mass sacking of bank workers which will surely follow the present trend in banking where banks no longer want to provide personalized services? Is Nigeria really ready to be a cashless society?
In Nigeria, nearly all bank doors are bullet-proof glass with metal doors and detectors CCTV, other scientific instruments that can invade your privacy.
Over several thousands bank branches in Nigeria – all have the same doors except First Bank. Not only do they have the same doors but they have the same canned electronic music while we wait for the door to open to let us in or out; it was the music that first gave me the hint that a deal had been done; the same doors means probably that the CBN ordered the same specifications for all banks and only one Chinese company could meet the specifications. Is it possible that at the Bankers Committee, there was a discussion on bank security especially after the spate of bank robberies? Or that all the MDs and their purchasing departments met somewhere where these doors were introduced? Or that, (God forbid), the Ministry of Finance introduced this particular type of doors to the banks or the SSS? Or Police? Why was there no variety? I do not believe that a single intrepid salesman was able to sell his unique door with its unique canned music and CCTV camera to every bank!!
Does it indeed matter that all doors are the same in the bank? But it is interesting that the decision-making process could so clearly be compromised. To change the doors was both a political and security question. It matters because if someone is able to overcome the security system in one branch door, then all banks are compromised. However, bank robbers now blow up the doors!!
I just smelt a rat in the whole business. As usual, if it quacks like a duck; it waddles like a duck, it looks like a duck, it is a duck!
I went to university in New Zealand, 1962 – 65, to The Free University in Amsterdam 1965 and to Cambridge 1966 -73. In all these places, I opened bank accounts. I taught at the University of Pennsylvania in Philadelphia (1970 -73) where I also had a bank account. None of these accounts are dormant. Two weeks ago my bank, Keystone, told me that my accounts in Port Harcourt were dormant. To activate them I have now to travel to Port Harcourt, show them utility bills for the past 12 months, bring a photo Identity card, etc.
The Nigeria banks claim that they instituted the regime of dormant accounts (a) to encourage people to use their accounts (b) know their customers (c) stop their own employees from stealing or using other peoples account for trading, etc.
Accounts left some 45 years ago in Europe and in England are not dormant. Billions of Naira have been made by banks on this head of dormant accounts. For now, bank transfers are being frustrated by bank managers who are in competition with one another to increase branch deposits. I asked my bank Keystone branch manager at the Ajose Adeogun branch to transfer my account to Keystone, TBS (Tafawa Balewa Square) branch. He simply refused by pretending that he wanted to see me!!
• To be continued tomorrow.
• Ambassador (Dr.) Cole (OFR) is a Consultant to The Guardian Editorial Board.