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.

7 thoughts on “Why ALAT and other digital bank apps might fail?

  1. I disagree with you Mr. Writter! The fact that a mobile app failed in the past as a result of one reason or the other does not mean others will. You have not given a concrete reason why you feel the app will fail. Alat does not only have an app but also a website as u suggested.

    1. Hello,
      Thank you for your feedback, we appreciate your point of view.
      PS. we have invited Nnamdi, a team member of the ALAT project to write a formal rejoinder, we look forward to his article a means of pushing a superior argument.

  2. FULL DISCLOSURE: I am part of the Team that gave birth to ALAT.

    Nice article. I like your take on ALAT, PayWithCapture and the general tech ecosystem of Nigeria.

    Your take on the new products that die every 2 quarters is does not tell the true story. You failed to offer suggestions on why they fail. In my opinion, they did not fail because they were mobile/digital/tech. The problems run deeper.

    Let’s look at PayWithCapture: Is(was?) PayWithCapture a digital bank (forget what the ad said)?
    1. Look at the name again. PayWithCapture. It is a payment app not a digital bank
    2. Look at the original function. It used QR mechanise to pay for goods and services at merchant outlets. The keyword here is “pay”
    3. Look at the way it their onboarding worked. It required a user to open an Access Bank account for which the user must walk into an Access bank branch to complete. Nothing digital about that
    4. Forms. Onboarding was no different from the traditional way of filling forms (only that the form was on my mobile phone)
    5. Access Bank focused more on ad instead of fixing the bugs

    Should I continue?

    So, the failure of PayWithCapture should not be the template for pronouncement of success or failure. I wish you provided more facts based argument on why ALAT might have the faith of PayWithCapture.

    Did I mention that ALAT has a web platform?

    Feel free to contact me for more discussion.

    1. Please if ur really part of the ALAT team I’m having challenges using d app cos my money is inside dia… I need response asap thank u

  3. Hello poster, some of your points are quite clear but I do not concur with your opinion that states ‘a digital bank is not different from what a bank app offers’ because ALAT is a digital bank and not a bank app. A bank app narrows it’s features to a few significant transactions but ALAT is a digital bank itself. Why do I have to go through the stress of walking into a building when I can simply do my banking on my mobile phone? ALAT has made it easy, jare…

  4. I really buy the idea of chidinma Ejiofor regarding stay at home and open your Alat bank digital account, because I see it as a kind of help for some of us who are not around for the moment… Thanks wema for your powerful concept

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