Increasing comfort with the use of mobile and digital banking has prompted banks and fintechs to explore tools such as artificial intelligence, embedded finance, and blockchain to enhance convenience, inclusion, and operational efficiency.
Akinlabi Adegoke, chief digital officer at Lotus Bank, said that that convenience now drives customer expectations, with Nigerians seeking instant, uninterrupted access to payments, savings, and investments through a variety of channels, from mobile phones and market stalls to transit and offices.
Nigeria’s banking sector is entering a new digital phase, driven by rising smartphone use, changing customer expectations, and competition between banks and fintechs.
Nigerians are increasingly using digital channels for payments and transfers, with electronic transactions rising sharply.
According to NIBSS, the total value of such transactions surged to N284.99 trillion in the first quarter of 2025, reflecting a 17.7 per cent year-on-year increase compared to the N234.49 trillion recorded in the same period of 2024.
According to Mr Adegoke, the sector has reached a point where speed and adoption alone are no longer sufficient. After a decade of growth, from simple USSD transfers to sophisticated mobile ecosystems, the pressure has shifted to trust, reliability, and meaningful engagement.
Platforms still experience downtime, fragmented interfaces, and confusing workflows, he said, making reliability a critical part of the user experience rather than an internal operational metric.
Beyond technical issues, Mr Adegoke noted cultural and infrastructural barriers. Many Nigerians continue to rely on cash not out of preference but due to digital distrust, unpredictable fees, and low connectivity.
“Cash remains deeply cultural in Nigeria; it feels tangible, immediate, and trusted. But it also reflects ongoing gaps in education, infrastructure, and digital trust. When people face poor connectivity, unpredictable fees, or limited digital literacy, they fall back on what’s familiar. Building inclusion, therefore, includes access and confidence,” he said.
He argued that true inclusion is not just about opening accounts but helping customers use them effectively, through budgeting prompts, savings nudges, and embedded financial education.
Fraud remains a major constraint. While banks have invested in cybersecurity, awareness among users remains weak.
“Trust is earned through consistency, transparency, and responsiveness. Customers need to know that when issues arise, their banks will act swiftly and communicate clearly. Beyond technology, trust is built through human connection, educating users, being visible, and taking responsibility. A trustworthy system is one that feels personal,” he said.
Regulatory pressure is also mounting. The Central Bank of Nigeria and other agencies are responding to consumer complaints, systemic risks, and market volatility.
The banker called for regulation that can keep pace with innovation while protecting consumers, suggesting closer collaboration between banks, fintechs, and regulators will be essential.
Looking ahead, he predicted that AI, blockchain, and embedded finance will define the next phase of digital banking.
But he stressed that impact will depend on localisation, solutions must reflect Nigeria’s informal economy, fragmented data, and limited credit systems. Physical branches, he added, will not vanish but evolve into advisory and education centres.
For small businesses, which he describes as the heartbeat of the economy, better digital systems could unlock new credit opportunities, improve cash flow tracking, and expand market access. Strengthening SME banking, he said, has a multiplier effect on jobs, productivity, and growth.
Ultimately, Mr Adegoke believes success will be measured by how well the system serves everyone, regardless of location or digital literacy.
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The goal, in his words, is a future where digital banking becomes so natural that users “don’t even think of it as digital,” and where trust and inclusion move in the same direction.
This shift, from scale to substance, from access to confidence, is at the centre of the reset now confronting Nigeria’s fintech sector.
Nigerian banks now process most retail payments through mobile apps, USSD services, and agent networks, with many banks reporting rising digital transaction volumes and slowing reliance on physical branches.