1 week Ago By Abdullateef Aliyu
By Abdullateef Aliyu Sterling Bank has given reasons behind its recent move to eliminate fees for mobile and online transfers. Following the April 1st announcement by the bank, which was initially met with skepticism, Sterling Bank has confirmed the decision as a genuine effort to ease financial burdens on existing customers. In a press briefing in Lagos, MD/CEO, Sterling Bank, Abubakar Suleiman shared that the bank had engaged in a lot of conversations over the years about the greatest pain points of their customers and how to make improvements in those areas.
According to him, Sterling Bank recognised that as circumstances became more difficult, even the small fees that customers pay on daily basis for transactions has become a pain point for them. Suleiman explained that contrary to the thoughts of the customers, banks are not greedy with the intention of taking all the money. However, the modern payment systems leverage a tremendous amount of technology, which requires a huge amount of investments.
He said, “Whenever you see an instant payment that moves quickly, there are at least 8 or 9 different softwares of which the majority of them are imported; and they are necessary solutions to protect your data and to ensure that we can trace your money. “So much is invested by banks and that is why we have to charge to recover that money. I guarantee you that it doesn’t even cover the full cost.
A lot of the cost that goes into technology doesn’t even show as technology cost. In addition to that, a lot of losses that are suffered during instant payment are borne by the bank. We are not operating with the mindset of just charging; we charge because we are dependent on very expensive systems that we now trust to recover the money from this billing.
” Suleiman stated further that the bank had decided, having achieved significant improvements in their systems and discontinued some of the foreign softwares, to give back some value to the customers. He said that Sterling Bank, last year, became the first bank in Nigeria to build its own core banking application working entirely with Nigerians; with the view that domesticating the technology cost and the intellectual property in technology would deal with the root cause of why banks have to keep charging people for payment. “It goes beyond that because even if we don’t charge, every time you do a transfer there is a switching company that has to be paid.
We are now committing, in addition to giving up our own revenue, to pay whenever a customer does this transaction because it has to be paid for. “Our view is that every single service charge that we eliminate can actually improve transactions. The more people know that it doesn’t have to cost a dime to transact, the more they are likely to transact.
This is actually changing our relationship with existing customers”. He however stated that the new policy was solely for existing customers and customers who would come on board in the next couple of months. “We are not doing it for our new customers per se, our priority is the customers that have always banked with us.
We are giving this back to them, they just have to remain loyal to us and we are giving them a reason to remain loyal. “Of course we will appreciate it if they bring in more people to come and bank with us. We also plan to extend this reward to customers who come on board in the next couple of months.
We will make a decision whether we will extend it but at this point, our target is existing customers and those who come onboard,” he said. He reiterated the bank’s commitment to making transactions seamless for customers. Adding that the new policy is just the beginning, “Because once we are done with eliminating the fees for transfers, we now want to focus on helping customers also make money.
” Emphasising that the only charges that customers should pay are the charges from the government because the banks don’t have any power over that. “We are hoping that because we have done this, other institutions can also follow suit. For us, it doesn’t matter if they choose to because we are committed to it, but if they do follow it will make it a lot easier for us to sustain it and hopefully do something that finally Nigerians can be happy with us as banks.
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