As people move towards more digital banking and other financial transactions, banks have had to step up their game. This means offering their customers more by providing services such as USSD and app transactions in a bid to make payments more convenient and faster for people.
This has greatly reduced the digital divide between banks and fintech operators. And as Guaranty Trust Bank (GTBank) earnings indicate, it is also proving to be a viable revenue generator for banks.
According to GTBank, the institution made a total Profit Before Tax of N231.7 billion. This figure represents an increase of 7.5% over 2018’s corresponding value of N215.6 billion. This indicates growth in customer patronage and usage of the bank’s financial services.
Digital banking accounts for 7.8% of GTBank revenue
GTB, like many Nigerian banks, has embraced digital banking, developing products for its customers. Some of its digital banking products and services include its payments gateway, GT Pay; its USSD banking, 737 and other e-payment channels.
From the NIP transfers carried out by its customers, the bank received a total commission of N11.15 billion for the year ended December 2019. This makes NIP the largest contributor to GTBank’s digital earnings.
NIP (NIBSS Instant Payment) transfer is a point to point funds transfer service that guarantees that monetary transactions are carried out the instant they are required.
NIBSS is responsible for the interoperability between the various players in the financial system. This involves the ability of Banks, Mobile Payment Operators, Non-Banking Financial Institutions, Payment Terminal Providers, Card Acquirers, Government Institutions etc., and their customers, to send, receive and process funds, documents and other instruments electronically through a common channel – NIBSS.
USSD, e-Channels and card earnings rose considerably
When customers use its USSD codes to carry out financial transactions, GTBank charges a convenience fee. In 2019, the total convenience fee amounted to N2.13 billion. This is a significant 34% increase from 2018’s value of N1.58 billion made by the company.
From its e-channel income and bills payment, a total of N1.92 billion was made. This also represents an increase of 52% from the previous year’s earnings of N1.26 billion. GT Pay is one of the major products in the bank’s e-channel line which merchants use as a gateway for bills payment for goods and services.
While making it easy for subscribers to go cashless and be able to pay with a wide range of ATM cards like dollar cards, MasterCard, Visa cards, etc, the bank has also made significant earnings for its efforts.
From card transactions, GT bank recorded an annual earning of 3.23 billion in 2019. This improved by 28% from its 2018 value of N2.53 billion.
This increase in GTBank earnings shows that while fintech operators have a huge and growing market for their digital financial services, some traditional banks have honored the invite to the digital party.
This is a positive development for the financial sector as all players will have to innovate constantly in order to remain relevant and keep their balance sheets black.