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    Digital banking thrives on niches. Without niches, customers will find it difficult to identify brands that are specifically designed to meet their needs. Hence, neobanks in Nigeria need to design their offerings in a way that announces their niches.
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In Nigeria, there are dozens of neobanks. Some of them include Kuda, Opay, World Remit, VBank, TransferGo, etc. Neobank is described as a direct bank that operates exclusively online without traditional physical branch networks. The term “challenger bank” is also used to identify this type of bank as well to several fintech banking startups that emerged in the wake of the 2007–2009 financial crisis. Experts have advised that neobanks should find their niche to improve their profitability. In this article, I discuss extensively the series of niches neobanks and digital banks as well as FinTechs can identify to improve their profitability.

  • A Neobank For Specific Professions

One of the ways the founders of neobank can break through the market is to design their offerings to meet the needs of specific professions. Neobank can design its offerings for specific credits and leasing structures for specific professions is one way to go. Yet, neobanks can act as resellers and service providers of tools within specific professions. For example, neobanks can choose to sell or lease or lend money to farmers to purchase farming implements and fertiliser as well as other farming gadgets.
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Again, neobanks can act as specific insurance providers such as providing insurance services against medical failures for doctors and as well provide car insurance for taxi drivers or bike insurance for bike couriers. In addition, features like automatic quarterly tax payments can be very easy for professionals.

  • Neobanks Focused On The Elderly

Many elderly people in Nigeria, especially retirees, end up in sickness and eventually die due to inactivity. Studies have shown that inactivity can be dangerous to one’s health. Hence, how do neobanks meet the needs of the elderly? There are diverse special services neobanks can provide the elderly which include financial and technical education, succession planning or health assistance such as providing insurance healthcare for senior citizens. These platforms of course will employ the use of bigger font sizes on all digital channels and communications as well as adopt artificial intelligence and sensors that allow citizens to live comfortably in their retirement age as well as enable them to live longer.

  • Banking For Gen-Zs

A neobank specifically designed to meet the financial needs of Gen-Zs will certainly stay ahead as this group of people are in their active and aspiring years. Hence, for this digitally savvy group, a neobank that is out to meet their needs will engage in a very digital and social media-focused offering with lots of gamification to make financial services more attractive.
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To gain more audience in this niche, neobanks will have to collaborate with influencers, financial and social media education services (like e.g. saving goals learning minors to save from young age, but also educating minors to stay safe on social media), special control tools for parents (e.g. spending limits or control on MCC codes for spending, but also simple supervision of all financial actions done by the minor), access to specific events (e.g. concert ticket sale).

  • Banking For Migrants/Immigrants 

One of the most underserved communities in immigrant communities. Hence, there is a need for neobanks to fill this gap and provide services that focus on ethnic groups. It is important to have all digital channels and communication translated into specific languages and have customer care departments with a good knowledge of the language, culture and habits of the target customer segment. Moreover, it can be vital to support specific platforms (e.g. social media) which are popular within the targeted community. For example, in the USA and Europe, Chinese focuses on the Asian community have everything translated into Chinese, has customer service fluently speaking Chinese and offers communication through WeChat. Aside from this neobanks that focus on immigrants can get more immigrants on their platforms by providing loans to immigrants because they are usually in new places for businesses and studies. However, credit scores among other requirements must be put in place to ensure borrowers are creditworthy.

Concluding Remarks

The digital banking industry is very vast with so many fields that need attendance, especially in meeting the specific needs of specific communities. Therefore, founders must spot these communities and pitch their tents and offer real value rather than just running a business that serves everybody in bits. Featured Image Source: YourStory
Got a suggestion? Contact us: editor@connectnigeria.com
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This article was first published on 5th November 2022

nnaemeka-emmanuel

Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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