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Access Bank Spends N18.7 Billion On Digitization In 2020

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Access Bank Spends N18.7 Billion

Nigeria’s largest bank by assets, Access Bank revealed it spent a whopping N18.7 billion in IT and E-Business-related initiatives in 2020. The figure is almost double (92% more) than the N9.7 billion spent in 2019. The same expense line cost it N11.39 billion in 2018.

The bank says the spending is in line with its “investments in IT capability with the focus of improving customer experience and to support digitization,” a strategy that will help the bank compete better.

Access Bank saw revenue increase through its digital channels with revenue of N56.1 billion, an increase of 58% over the previous year. Income from digital channels was N36 billion and N14.2 billion in 2019 and 2018, respectively.

This year, the bank also invested around N10.2 billion in intangible assets, of which N8.49 billion was spent on software purchases. Banks also rely heavily on software applications to serve their customers and power their businesses.

The Nigerian commercial banks have invested heavily in the expansion of their digital products in view of the fierce competition from FinTechs, which innovate more quickly and are shrinking market shares. However, big banks like Access Bank have the financial strength to compete in this area as buttressed by Access Bank’s spending.

For banks like Access Bank, the goal is to drive financial inclusion and customer acquisition from retail customers through channels like USSD, Mobile Banking, TelCos, and other forms of digital platforms. Access Bank says that these measures have brought benefits as their financial inclusion initiatives have improved.

Access Bank claims its total digital transaction value rose to N33.89 trillion in 2020 made up of 1.6 trillion transaction counts. It also opened 3.6 million new accounts via its Telco partnerships and that it now has 40 million customers out of which 17 million are mobile users (USSD & Mobile).

As the bank explains “our Retail Banking business has grown consistently across all income lines, driven by a strong focus on consumer lending, payments and remittances, digitization of customer journeys, and customer acquisition at scale.”

The bank also claims to have raised 4 million digital loans during the year and disbursed N105 billion loans through its digital lending platform generating a 48% year-on-year growth. It generated N5 billion in revenue from digital lending a 49% growth year on year.

Access Bank is part of our Stock Select recommendation portfolio. Find out about our preferred entry and exit prices and what to look out for when choosing this stock.

 

 

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