Tailoring banks’ retail strategy to Nigeria’s demographics

Nigeria's retail banking sector is evolving rapidly to cater to the country's dynamic demographics, particularly the young adult population. According to the National Bureau of Statistics, the number of young adults in Nigeria is projected to reach 34.5 million by 2020. This demographic shift presents a unique opportunity for banks to tailor their retail strategies to meet the evolving needs and preferences of the Nigerian consumer base. Robert Aderinmola, Market Intelligence Officer at Diamond Bank, discussed how Nigeria's demographics benefit the retail strategy of banks in the country in a recent interview on CNBC Africa. Aderinmola highlighted the key fundamentals driving the evolution of retail banking in Nigeria, including the young population, rapid urbanization, rising incomes, and technological adoption. One of the key points emphasized in the interview is the significance of Nigeria's young demographics. With a median age of 18, 70% of the population in Nigeria is below 30 years old. Aderinmola underscored the importance of recognizing that retail banking is a game of numbers, and leveraging the young demographic can be a strategic advantage for banks operating in the country. Additionally, Aderinmola pointed out the trend of rapid urbanization in Nigeria, with 85 million Nigerians residing in urban areas. This urbanization rate is growing at 4.3%, indicating a shift towards urban living and changing consumer behaviors. Coupled with rising wages and incomes, Nigeria boasts the second-highest average disposable income in Africa, making it a lucrative market for retail banks. Moreover, the increasing adoption of technology in Nigeria is transforming the way banks interact with customers and deliver financial services. Aderinmola emphasized the need for banks to invest in innovative digital solutions to cater to the tech-savvy younger generation and provide a seamless banking experience. A key aspect of Diamond Bank's retail strategy involves targeting the 18 to 29 age group, which comprises a significant portion of the population. By offering value propositions centered around lifestyle and behavior pattern banking, the bank aims to capture the preferences of this demographic. From mobile apps to tailored accounts, Diamond Bank is focused on creating a personalized and engaging banking experience for young consumers. In terms of future plans, Aderinmola outlined five strategies that Diamond Bank is implementing to strengthen its presence in the youth demographic. These include expanding the value proposition, aggregating consumer behavior insights, leveraging technology for non-financial services, and providing a secure payment platform accessible to both customers and non-customers. As Nigeria's retail banking landscape continues to evolve, adapting to the changing demographics and consumer preferences will be crucial for banks to stay competitive. By understanding the unique attributes of the young population and leveraging technological advancements, banks like Diamond Bank are well-positioned to drive growth and innovation in the sector.