Standard Chartered Bank will close down 50% of its branches in Nigeria as part of its pivot efforts to digital banking, according to a Bloomberg report that emerged this week. This decision by the British banking group would inevitably resort to job cuts which may run into hundreds.
The report said Standard Chartered Bank will close down at least 12 of its branches in Nigeria out of about 25, and the closure already began in December 2021. Although the management of the London-listed bank has not disclosed they would lay off staff, inside sources believe almost half of the workforce may be let go.
Focus on digital banking
Standard Chartered Bank is responding to the pressure and stiff competition from mobile payment service providers. The wide adoption of mobile money in Nigeria and the fintech boom in Africa is fast relegating traditional banking, forcing the industry players to reposition and restructure their operations.
Most Nigerian banks, including Zenith Bank and First Bank of Nigeria, are generally cutting costs by using a network of authorised agents to sell their products and services instead of opening physical branches.
The report cited anonymous sources, says Standard Chartered Bank plans to recruit agents to reach new customers and handle cash deposits and withdrawals across Nigeria in a bid to strengthen its mobile banking services.
It is envisaged that the mobile payment competition will get even tougher with mobile telecommunications companies joining the sector. In November 2021, the Central Bank of Nigeria (CBN) granted MTN Nigeria and Airtel Africa operating licence for Payment Service Bank (PSB) to foster financial inclusion.
This would mean more access to deposit products, payment and remittance services to Nigeria’s small businesses and low-income households.
Bankers’ union intervention
The Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI ) has said it might not intervene in the looming massive job loss at Standard Chartered Bank to cushion the ripple effect on the affected staff. This is because the workers do not belong to the union.
“Standard Chartered Bank employees are not members of any union in Nigeria. If they were unionised and those people are our members, we would go into negotiation with the management on a severance package, the allowance they are going to be paid,” she told Punch.
She added, “And one other thing again that we do in ASSBIFI is that we talk about reducing the number. If the management wants about 50 workers to go, we find a way to do negotiation to reduce the number to a lesser figure because of the effect on the families and the economy at large.
But as long as they are Nigerian workers, if they walk into any of the labour centres, their case will be taken up and can then be directed to ASSBIFI level to be taken up on the ground that they are Nigerian workers.”
Making a case for the workers, the Association President, Mrs Oyinkan Olasanoye, noted that despite the current necessity for traditional banks to pivot to digital banking, the employees are still as valuable and needed for it technology-driven system to work effectively.
“Despite the digitalisation, it is the employees of these banks that are still feeding the necessary machines and the necessary equipment to be able to work better.
“This will bounce back to Nigerians generally because Nigeria’s economy is a dependent economy, so those bank workers have some relatives and friends that they still assist financially. A single worker laid off will affect many Nigerians,” Olasanoye said.