The sun will shine after the eclipse. It is the resurrection. That is what is happening in the sector. It is a good sign. It forebodes hope – not doom – that soon the legacy fintech and start-ups will eat from the same dish. If a soothsayer had predicted this, I would not believe it. Perhaps, I would believe it because I am a believer.
On The One Hand
Initially, you would have thought of the incumbent firms swallowing fintech start-ups. At least, not in Europe or America. But fintech start-ups have acquired the incumbent. Open the book. Research shows that in February 2020, LendingClub announced plans to acquire Radius Bank in a cash-and-stock transaction valued at $185 million. The deal closed in February 2021, leading to a very quick and surprising second-quarter profit.
In March of 2024, SoFi agreed to acquire Golden Pacific Bancorp (GBP) for about $22.3 million in a deal designed to accelerate its acquisition of a national bank charter. Blockchain-based lender Figure Technologies agreed to merge with mortgage firm Homebridge Financial Services, which has 180 retail branches and funded more than $25 billion in home loans in 2020.
On The Other Hand
The fintech start-up and challenger bank Jiko acquired Wadena, Minnesota-based Mid-Central National Bank.
Fintech startup Jiko acquires nationally-regulated U.S. bank
Mobile banking startup Jiko Group has acquired Mid-Central National Bank in Wadena, Minn.
in a deal that took years of due diligence and whose sales price fell in the range of a Series A round, according to the founder. Did you see that coming? No, you did not.
For some fintech companies, an acquisition is about speed and the ability to gain all the licenses. It creates the opportunity to avoid some hurdles associated with building a financial institution from the ground in a highly regulated industry. That is what Interswitch – backed by Visa – has done when it announced a merger with mobile money provider M-Kudi.
In The Long Term
This move is a precursor to becoming a Payment Service Bank (PSB). Well, first it must obtain a license from the Central Bank of Nigeria. The merger, contingent on regulatory approval, marks a significant shift for Interswitch as it looks to expand beyond traditional payment services. This strategic move aligns with its goal to extend its services beyond payment solutions and enter the realm of banking services. A statement read.
The proposed marriage between Interswitch and M-Kudi will help improve Interswitch’s financials. Aside from the technical flexibility of the merger and other sources, acquiring M-Kudi provides multiple benefits. Interswitch will gain by being able to hold loans on its balance sheet and gain confidence from investors.
For one, the merger will give Interswitch the audacity to compete with the likes of Moniepoint, Kuda, Carbon, and Fairmoney et al to serve the unbanked, underserved, and underbanked customers. That is when Interswitch’s commitment to redefine its role in the financial landscape will shine through.
This commercial transaction is great news for fintech start-ups, after the series of demise experienced last year. In the year 2023, many start-ups in the ecosystem did not survive. Funding dwindled by 43 per cent. All of these contributed to dampening the outlook of the ecosystem in 2023.
In The Short Term
It is the resurrection morning. The sun will rise after the eclipse. An incumbent will produce even when the fintech start-ups have ceased to create.
Unsavoury customer service from an app store and other stores
Good customer service is dead in Nigeria. At the altar of the banks, eateries, shopping malls, gadget stores, e-commerce sites, and fintech apps. The emotion you feel after a purchase or interaction at a particular store determines if you will return. It is not pomposity. You desire quality service in a value transaction.
If you are treated like a mannequin, you do not smile. Instead, like the mannequins, freeze! You would then think it was a mistake to patronise the other party. If you can relate, welcome to my party.
On The One Hand
A voice called the other day. The caller wanted to know if the smartphone I returned because of factory defects was okay. But the smartphone is still with the customer service personnel! Another sales rep in a gadget store was as lethargic as the cold when she walked up to the customer. Could this customer pay for any of these dollarized gadgets? Her body language screamed the question!
She dragged her feet when you insisted on viewing a copy of the gadget. She insisted the gadget was in the store. She would get it when you are ready for it. I calmly said I was ready. She persisted upon showing a replica of the gadget. Like the mannequin, I froze. Then left the store.
On The Other Hand
The following day, I returned to purchase the costly gadget. I was with a friend who needed the gadget. We were casual as casual workers. She recognised me immediately. She was as sloppy as ever. Maybe she was ill. Maybe. Or hungry? Maybe. Or tired? Maybe. Or she hated my face. It is a possibility. But I could not tell. She repeated the motion. The gadget was in the store. She said I would get it when I am ready. I was ready. I announced calmly.
In The Long Term
My friend was unamused. She was surprised at my calmness. The sales rep left and pretended to attend to another customer. I approached a walking tattoo. A young Lebanese. His biceps bulging under his t-shirt. He was the floor manager. I placed my order. He guided me to another section and showed me the gadget in its blazing glory. With disdain, he threw the cost at me. We will have it. Like a fluorescent bulb, his face lit up! He was alarmed.
Then, the sales rep walked over and collected our particulars. We moved to another level of the building. Paid. Moved to another section of the building. Presented the purchase order. Like a champion, we left the store with the purchase.
At a different store, I purchased a smartphone accessory. The fidelity of the purchase was necessary. The sales rep could not help with that request because she was not an engineer. Could you find an engineer, please? She reluctantly walked away and returned with a technician. And we were served.
Writing on the impact of bad customer service on brand reputation on LinkedIn, Chinenye Agu, said customer feedback plays a crucial role in shaping a brand’s reputation. Negative customer service experiences tend to spread more widely than positive ones. People naturally focus more on negative experiences due to a psychological tendency. Bad customer service is a wound. It heals slowly.
Besides, poor service often provokes strong emotions like frustration and anger. It prompts customers to share their experiences more vocally. Technology and digital channels aid in amplifying complaints. Studies reveal that a dissatisfied customer tells 9 to 15 people about the experience. A satisfied customer tells only 4 to 6 people.
In the short term
Banks, fintech, and accessory stores should invest in quality customer service and training. This will resurrect good customer experiences in Nigeria.
