German information technology solutions provider Wincor Nixdorf AG says the cashless economy project of the Central Bank of Nigeria (CBN) will drive the growth of automated teller machines (ATMs) deployed to serve customers in the country. The company expects the number of ATMs to grow from the current 11,000 to 70,000 over the next five years.
The President and Chief Executive Officer of the firm, Eckard Heidloff, who spoke in Lagos at the formal opening of its representative office in the country, said Nigeria had huge growth prospects on the continent, adding that with a population of over 165 million people and vast human and material resources, the country remained the continent's leader. He said the growing banking sector and a vast interest in new technologies is another strength of the country.
He identified difficulties in managing the nation's notes and dearth of infrastructure as two problems posing challenges to the industry. He particularly lamented the deficit in power supply which, he said, had brought untold hardships on the people of the country.
"Nigeria is one of the most strongly growing economies in the world. Here we're the market leader in our business, and need to be directly available to our customers in order to support and advise them. This step is an expression of our commitment to the importance of the Nigerian market, and at the same time, the continuation of our global expansion strategy," Heidloff said.
He noted that the popularity of ATMs would increase in Nigeria, just as it had in other emerging economies, and stressed another important aspect of this trend. "In ATMs we see an opportunity to provide access to banking services for people who currently have no bank accounts of their own," he said, adding that in expanding its business, the company was relying on the concept of working with its local partners which are Computer Warehouse Group PLC, SoftWorks Limited and Cyberspace Network Limited.
Customer proximity is critical for Wincor Nixdorf in serving international markets. The new office is intended to support the company in implementing the country-specific requirements of its partners and customers more rapidly and precisely through tailored technology solutions.
In addition, a local presence will improve customer service even more in order and support the expansion with solutions of Wincor Nixdorf.
Measured in the number of delivered ATM units, Wincor Nixdorf is already the clear market leader in Nigeria and No. 2 in Africa as a whole. Among its customers are nine of the ten largest Nigerian banks.
And the potential is immense: according to the Central Bank of Nigeria (CBN), the country's dynamically growing financial institutions plan new installations of up to 70,000 ATMs over the next ten years.
In contrast, the country's installed base in 2011 amounted to only approximately 9,600 systems, according to a study completed by the British market research company Retail Banking Research (RBR), which estimates a current total of 11,000 systems on the basis of statements by CBN. Moreover, many Nigerian banks maintain their own branches in neighbouring countries, offering opportunities for further growth.
Against this backdrop, Wincor Nixdorf is very optimistic about its prospects for business in this important market. In addition to Nigeria's economic growth, an increase in prosperity is the primary reason for the growing demand for ATMs. Currently there are only 57 ATMs per million inhabitants to cover the country's constantly growing need for basic banking services.
For purposes of comparison, in Brazil there are 780 ATMs per million and in Russia 808.
In order to help banks meet the increasing demands of Nigeria's consumers, Wincor Nixdorf also intends to offer support in enhancing ATMs through new service offerings or future-oriented technologies. Examples include the use of ATMs to top up payment cards or to pay bills – such as those from utility, telecommunications or insurance companies – via cash deposits.