THE CHALLENGES OF DIGITAL BANKING IN NIGERIA
Though, the importance of digital banking in Nigeria cannot be overstated, however, there is still a myriad of challenges faced in its implementation. Here are some of the negative effects of digital banking:
i. CYBERSECURITY RISKS: Digital banking is vulnerable to cyber-attacks, which can lead to financial losses for customers. Hackers can compromise customers’ personal information, including bank account details, leading to financial fraud and identity theft.
ii. REDUCED PERSONAL INTERACTION: Digital banking eliminates personal interaction between customers and bank staff, which can lead to a lack of trust and loyalty. Customers may feel disconnected from their banks, leading to a lack of confidence in their banking services.
iii. LIMITED ACCESSIBILITY: Digital banking requires access to the internet, which is not available to everyone, particularly those in remote areas or low-income households. This means that some people may be excluded from accessing banking services.
iv. OVERDEPENDENCE ON TECHNOLOGY: Digital banking relies heavily on technology, which can fail or malfunction, leading to significant disruptions in banking services. This can be particularly challenging for customers who are not tech-savvy.
v. LOSS OF JOBS: The adoption of digital banking has led to the closure of many bank branches, leading to job losses for bank employees. This can hurt the economy, particularly in areas with limited employment opportunities.
vi. DIGITAL DIVIDE: Adopting digital banking has created a digital divide between those with access to technology and those without access. This divide can exclude low-income households, older people, and individuals living in rural or remote areas from accessing Banking services. This can have a significant impact on financial inclusion and exacerbate inequalities.
vii. COMPLEX PROCESSES: Digital banking can be complex and confusing, particularly for individuals who are not tech-savvy. This can make it challenging for them to carry out banking transactions, leading to frustration and exclusion.
viii. INCREASED FINANCIAL RISKS: Digital banking can lead to increased financial risks for customers, particularly those unfamiliar with digital banking platforms. Customers may accidentally make incorrect transactions or fall victim to scams, leading to financial losses.