NCC’s Effective ICT Drive Impacting Positively On Financial Services Sector
By UDO ONYEKA
Information Communications Technology ICT has made enormous changes in the financial sector and it is today an important factor for the successful achievement of banks targets in Nigeria.
Internet, as a global communications network, forms electronic market and the supply of many new services which have a huge impact on business and society. Financial institutions in Nigeria have joined the rest of the world to key into it to deliver efficient and borderless services.
However in Nigeria the role the Nigerian Communications Commission, NCC as the Telecom services regulator has been immense and has contributed to the growth of internet and mobile phone use in the country.
The NCC with its power derived from Section 3 of the NCA Act of 2003, has been discharging its functions effectively.
Some of the Commission’s functions include; Issuing of licenses and imposition of terms and conditions on licences, Approving guidelines for keeping of accounts and cost allocation formula of licensees, Inspection of licensees’ books of accounts, Granting or revoking of permits for connection of customer equipment, Determination of principles to guide interconnection arrangements between operators and Determination of services and new undertakings eligible for licensing from time to time.
The NCC currently under the leadership of Professor Umar Garba Danbatta has been effective in its mandate of supervising and monitoring telecom operators. The operators have been kept on their toes, knowing that any infraction would be detected and sanctioned appropriately.
It is actually the growth and efficiency in the sector that the financial services sector leverages to deploy digital services.
Telecoms created opportunities in the banking and e-payment systems, which have been accelerated by the COVID- 19 era sweeping across the world. Many Nigeria’s retail franchise, especially banks did not feel the impact of the coronavirus much as they regular engaged their customers electronically.
For instance Zenith Bank Plc announced its unaudited results for the first quarter ended 31st March 2021, with Profit before Tax (PBT) rising by 4 per cent to N61.0 billion, from N58.8 billion recorded in March 2020. This is despite a very challenging macroeconomic environment aggravated by the COVID-19 pandemic.
According to the unaudited statement of account presented to the Nigerian Stock Exchange (NSE) on Friday, 30th April 2021, Profit After Tax (PAT) also grew by 5 per cent from N50.5 billion in Q1 2020 to N53.1 billion in Q1 2021.
The profitability was driven by the optimization of the cost of funds and improvement in non-interest income.
The Bank CEO, Ebenezer Onyeugwu said its robust customer acquisition strategy and the effectiveness of its electronic platforms and digital channels delivered a N54 billion increment in the savings account balance, which is solely retail. The bank’s customer deposits also grew by 6 per cent from N5.34 trillion in December 2020 to N5.68 trillion in March 2021.
Transactions on electronic channels also rose astoundingly as new customers continue to be attracted to the Bank’s various user-friendly digital platforms.
Apart from Zenith Bank , United Bank for Africa, UBA, is another bank optimally leveraging ICT infrastructure, UBA, in the first quarter of 2021 saw its Profit After Tax grew by 26.8 percent from N30.1 billion in March 2020 to N38.2 billion in the period under review, thereby sustaining its strong profitability, recording an annualised 20.5 percent Return on Average Equity (RoAE) compared to 19.9 percent in the same period of 2020.
This was contained in the bank’s unaudited results for the first quarter ended March 31st, 2021, showingng impressive double-digit growth across most of its major income lines.
According to the Group Managing Director/CEO of UBA Plc, Mr. Kennedy Uzoka, the Bank’s performance in the first quarter of 2021, reflects UBA’s capacity to sustainably grow earnings even in a highly uncertain macroeconomic environment.
Uzoka pointed out the bank’s effort towards diligently executing its priorities for the year 2021, as it leverages people, process, and technology to deliver the best customer experience across all its channels and touchpoints, achieving industry leadership and dominance.
The above examples show that electronic transactions are taking the lead in the payments and financial services.
Also the National Bureau of Statistics (NBS) says the banking sector recorded a total volume of 3.46 billion transactions via electronic payment channels, amounting to N356.47 trillion in the fourth quarter of 2020 (Q4 2020). The figure represents a N36.48 trillion increase (11 percent) from N319.99 trillion posted in the third quarter of 2020 (Q3 2020).
According to the report titled, ‘Selected Banking Sector Data: Sectorial Breakdown of Credit, ePayment Channels and Staff Strength (Q4 2020)’, released recently, online transfers accounted for the bulk of transactions during the period under review.
The data showed that online transfers accounted for 2.27 billion volume of transactions, valued at N120.27 trillion. The volume in Q4 2020 is 39.67 percent higher than figures recorded in Q3 2020.
Further disaggregation of electronic payment channels show that 5.5 million volume of transactions were done through cheques valued at N4.2 trillion during the period under review.
Automated teller machine (ATM) transactions recorded 455.25 million volume valued at N4.54 trillion in Q4 2020.
The volume, however, declined 14.11 percent compared to the number of transactions recorded in Q3 2020.
A total of 214.84 million transactions were done using point of sale (POS) transactions, valued at N1.51 trillion during the year.
The volume of transactions through unstructured supplementary service data (USSD) surged 9 percent in Q4 2020 at 145.58 million valued at N1.63 trillion.
Transactions over mobile applications also increased by 10.80 percent in Q4 2020 at 124 million value at N9.9 trillion.
The figures above indicate tremendous growth, which is happening owing to effective supervision of Telecom services by the NCC.
