Why ALAT and other digital bank apps might fail?

You must have heard about ALAT, a digital banking app from the stables of Wema Bank, a tier 2 bank operating in Nigeria.

Well, it is expected and in a buzz filled tech ecosystem such as Nigeria, every two consecutive quarters give birth to a Whizzbang tech idea that often disappears after the next two-quarters.

No doubt about it ALAT is a good idea for a contemporary bank. In the face of thinning revenue from interest income and huge loan defaults; what better way to hike revenue than transaction commissions from something like this?

A review of the app shows that much work, energy and cash has gone into the conceptualisation, development and production of the final prototype and the team must be commended for such a bold step.

However, Nigerian banks always get something wrong. For the fact that something sound trendy or contemporary does not mean it will gain traction when executed in a way that does not take learning from what works in real life.

Without much fuss, a digital bank is not different from what a bank app offers. From a typical bank is not just repetitive but unnecessary.

Many banks in Nigeria have not only lagged behind with their mobile apps but are still wasting time holding back key features from their apps. There is no need to create a new app that is more or less another mobile app but to improve on what they already have.

If this sound like a rant, let me take you back memory lane, actually less than a year ago.

Access Bank in their good motive launched PayWithCaputure, an app that uses a QR code mechanism to pay for goods and services at merchant outlets. This is a brilliant idea but the way and manner it was scaled made it bite the dust. Without delving much into this product, you can read more on why PayWithCapture failed.

It did not require a clairvoyant to know that Access Bank as at that time did not need another app that will relegate its mobile app. With about 5 million customers in its kitty, Access Bank’s main mobile app has just about 1 million downloads. By industry estimates, just about 30% of this number will be active users. This further begs the question why a bank will go ahead to spend a huge amount of cash on scaling another app that will not see the light of the day.

Here is my take
Part what I have learned from the little experience in Nigeria’s tech space is that it is harder to succeed with an app when launching a new product. Products that will do well with an app version will need to have gained offline and or online (via web/mobile sites) traction for several years. Such product should have its loyal customer base. The same customer base can them migrate to an app version of the site/product.

For those who disagree with this stance, they are of the opinion that you need to pump in much cash to get traction. Such investments often witnessed initial uptake only to nosedive after advertising pressure wanes.

For ALAT, the focus on an app from the get go will be a major setback as there is no guarantee it can sustain user growth after advertising cash run out. The solution should be a website that is optimised for all devices. This will allow anyone to try the product without necessarily downloading anything. There are several apps calling for attention already.in the middle of an app bubble,

There are several apps calling for attention. Nigeria and even the world is already in the middle of an app bubble, ALAT and many other new but app-focused tech products would struggle to pull through.