Banks beware: Small challenger banks are introducing disruptive account setup options

Imagine opening a fully-functional bank account in just five minutes. This probably sounds too good to be true. But it is happening, made possible by the disruptive technologies of small challenger banks in Nigeria.

Nairametrics’ Founder, Ugochukwu “Ugodre” Obi-Chukwu, recently shared his experience with this disruptive new way of banking. Writing on his Twitter page, he recounted how a friend of his exposed him to this new bank account opening reality.

Ugodre’s friend is Nonso Okpala, the Group Managing Director and Chief Executive Officer of VFD Group. Apparently, VFD Microfinance Bank has this highly optimised mobile banking app that makes it possible for users to open new bank accounts within five minutes. Ugodre said he was initially doubtful when his CEO friend told him about this app. But then again, we all know that it only takes a trial to get convinced.

As Ugodre was made to discover there are, indeed, apps like that of VFD Microfinance Bank which make it very possible to quickly open a brand-new account. Let’s call them challenger banks because they are really giving traditional banks a run for their money.


It’s time for traditional banks to wake up

It is interesting how many of Nigeria’s oldest and biggest banks are still playing catchup when it comes to banking technology. Agreed, all of these banks have mobile banking apps. However, most of these apps cannot even effectively perform their primary functions, let alone help customers to open fully-functional bank accounts in less five minutes.

For some of Nigeria’s traditional banks, customers are still required to visit a branch, fill out numerous forms, and submit numerous means of identification before they can open an account. The truth is that many young and tech-savvy Nigerians simply do not have the patience for these processes. As such, it would not be surprising if they boycott the traditional banks and go for the likes of VDF Microfinance.

By the way, there are a couple of other new technology-driven banks that make it possible for users to set up an account in less than five minutes. Ugodre said he tried them all and they are working. See below.

Indeed, it is high time for Nigerian banks to become more aggressive with their technological innovations. They must ensure to make better use of data, whilst also guaranteeing positive customer experience. As Ugodre opined, this is the only way they can remain relevant in this day and age.

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