While a handful of countries like Canada, Sweden and the UK are charging toward cashless economies, offering digital financial services alone will not lead to more inclusive economies in countries like Nigeria that rely on cash.
In cash-based economies where clients have a variety of demands, there is no one-size-fits-all list of services microfinance banks need to have. As stated by the author of ‘Access to Cash: The First Step Toward Financial Inclusion’, moving away from cash “would only serve to isolate the unbanked and the underserved from the rest of the population.”
What microfinance banks in Nigeria must offer is the ability to choose. To build more inclusive economies, microfinance banks must deliver a variety of services that give their clients the power to decide: digital financial services or cold, hard cash.
ATMs make it easier for your clients to transact
Microfinance banks are integrating their core banking systems with Automated Teller Machines (ATMs) to meet their clients’ increasing demands for easy access to cash. An ATM is a hub for financial services — an electronic banking outlet providing access to transactions without going to a bank’s branch or meeting with a teller. Today, individuals can use ATMs to:
- Withdraw money
- Deposit money
- Check their account balance
- Print account statements
- Make payments
According to a Retail Banking Research report, the overall number of cash withdrawals globally grew by 10 percent in 2015 to 99 billion. The most significant increases were in Asia-Pacific markets, the Middle East and in Africa.
Microfinance banks need to balance innovation and what their clients want
Providing your clients access to their accounts through ATMs is particularly important for microfinance banks with a diverse client base. According to EY’s report on customers’ experience with fintech, younger clients may be receptive to using digital financial services, while older clients may not.
“Cash is embedded in cultures and monetary systems around the world. People trust cash as a store of value and it remains a means of payment that can be used by absolutely anyone at any time.”
Mike Lee, CEO of the ATM Industry Association, Cash Matters
Seamless ATM integration with your core banking system
Oradian built Instafin, its core banking system, to be flexible and allow for integration and other delivery channels. A delivery channel is the way financial institutions deliver their financial services to clients. Examples of alternative delivery channels – not face-to-face transactions between a teller and a client – are mobile phones, ATMs, Internet or online portals, call or contact centres, etc.
Instafin can be configured for ATM integration to make it easier for financial institutions to serve their clients. For example, in the Philippines, Oradian integrated Instafin with an interbank network. Regulated financial institutions like Cantilan Bank can deliver its services through ATMs in the Philippines.
Cantilan’s clients can access their accounts through ATMs, outside of normal business hours or physical reach, making financial services more convenient. This is how financial institutions are using ATMs to move toward financial inclusion in their communities.