Electronic fund transfers (EFT): a prerequisite for the future of your Microfinance Bank

According to the fintech survey conducted by PwC in 2017, up to 40% of banking and payments businesses are at risk because of new digital technologies. This trend is exaggerated in Nigeria for two reasons:

  1. By 2020, according to the CIA World Fact Book, 50% of the population will be under the age of 25 — the most tech savvy of your clients
  2. By 2020, fintech investment in Africa is estimated to be valued at $3 billion USD, with a significant percent going to Nigeria and South Africa

Enabling your Microfinance Bank to execute electronic fund transfers (EFT) is one key way you can take control of your business and its future in a rapidly changing market.

woman using tablet do electronic fund transfer

Electronic fund transfers eliminate cash transactions

The term electronic fund transfers covers a suite of services: direct-debit transactions, wire transfers, ATM withdrawals, online bill pay services, etc. An electronic fund transfer (EFT) is a transaction that is carried out using a digital network between accounts within the same financial institution or accounts at different financial institutions. Electronic fund transfers move money securely and efficiently, without requiring paper money to change hands.

Direct deposits are an example of an electronic fund transfer. At the end of the month, or when an employee’s salary is paid, the employer transfers the employee’s salary directly from the employer’s bank account to the employee’s bank account. The employer and the employee could use different banks. The transaction is made between the banks, without any checks or hand-to-hand cash transfers.

infographic showing customer trends

Your clients demand services that rely on electronic fund transfers

In the past, your microfinance bank was one of the only ways your clients could access financial services. Your microfinance bank’s strength was and still is your client service: face-to-face interactions, knowing your communities, going to your clients and offering specialised services unique to your clients’ needs.

Today, when your clients own a smartphone, they have access to fintech apps that offer a variety of services: digital wallets, peer-to-peer payments, wire transfers, bill pay, credit scoring. The list goes on. Your microfinance bank needs to maintain your high levels of service, while keeping up with digital technologies.

If your microfinance bank can offer the services that individuals are turning to fintech applications on their smartphones for, you can continue growing your client base. If not, your microfinance bank is at risk.

Equip your bank with electronic fund transfers through Oradian

In a market that is constantly changing with new demands from clients and new technologies available, your financial institution needs to be flexible and able to get ahead of these changes. Oradian delivers a flexible core banking platform that can be integrated with delivery channels, fintech applications and digital payment infrastructures — the network that carries out electronic fund transfers. Our team of industry experts can guide you through the process of integration.

We partner with providers who share our global best practices: an agile development approach and international security standards. Through Oradian’s integration capabilities and partnerships, you can set up financial institution up for continued success in an unknown future.

Have more questions? Let’s talk!