By [Bukola Oladipo]
LAGOS — The familiar sight of crowded banking halls and long queues is steadily fading across Nigeria as banks shut down 229 physical branches, driven by a sharp rise in digital transactions and changing customer behavior. Today, millions of Nigerians no longer “go to the bank”; instead, they carry their banks on their mobile phones, debit cards and POS terminals.
Industry data show that electronic payments covering mobile transfers, POS transactions, internet banking and USSD; have surged to record levels in both volume and value, running into tens of billions of transactions annually. This rapid digital adoption has made many physical branches economically unviable, prompting banks to restructure their networks and reduce operational costs.
As the old adage says, “When the market relocates, the wise trader follows.” Nigerian banks are following their customers into the digital space.
Why Banks Are Closing Branches
Analysts point to several factors behind the wave of branch closures.
First is the explosion of digital banking. Routine services such as fund transfers, bill payments, account statements and even loan applications can now be completed in minutes on mobile apps. POS terminals and agency banking outlets have also expanded rapidly, especially in areas once underserved by banks.
Second is the high cost of maintaining physical branches. Rent, electricity, diesel, security and staffing costs have continued to rise, squeezing profit margins. With fewer customers visiting branches, banks are increasingly asking whether it makes economic sense to keep them open.
Third is the overconcentration of branches in urban centres. In cities like Lagos, Ibadan, Port Harcourt and Abuja, multiple branches of the same bank often exist within short distances of each other. Digital banking has rendered such overlaps unnecessary.
The shift gained further momentum after the COVID-19 pandemic, which forced customers to adopt digital channels. What began as an emergency response has since become a permanent habit.
Impact on Jobs and the Labour Market
The closures have raised concerns about employment in the banking sector. Tellers, customer service officers, security staff and branch operations personnel are among those most affected.
While exact job-loss figures remain unclear, labour experts warn that traditional banking roles are shrinking, creating anxiety among workers whose skills are tied to physical branch operations.
However, industry observers argue that the sector is not necessarily losing jobs but changing the type of jobs available. Demand is growing for professionals in cybersecurity, data analytics, digital product management, compliance technology and software development.
The challenge, they say, lies in reskilling. Many affected workers lack the digital competencies required for these new roles, widening the employability gap.
As the saying goes, “When the drumbeat changes, the dancer must learn a new step.”
Digital Disruption Reshapes Banking
The banking industry is undergoing what experts describe as a structural digital disruption, transforming banking from a physical location into a technology-driven service.
Benefits of the shift include:
- Faster and more convenient transactions available 24/7
- Reduced operational costs for banks
- Expanded financial inclusion through mobile money and agent banking
- Increased competition and innovation, driven by fintech companies
For many customers, digital banking has simplified life. Market traders, transport operators and small businesses now accept payments through POS machines and instant transfers, reducing dependence on cash.
Biblical wisdom captures the moment: “See, I am doing a new thing; now it springs forth” (Isaiah 43:19).
Challenges Persist
Despite the gains, the digital transition has exposed vulnerabilities.
Cyber fraud and online scams are rising, exploiting gaps in digital literacy. Network failures and delayed transaction reversals continue to frustrate customers. There is also concern about digital exclusion, particularly among the elderly and rural dwellers without smartphones or reliable internet access.
Furthermore, some customers lament the loss of personal interaction that physical branches once offered, especially when resolving complex issues.
As Scripture warns, “Knowledge puffs up, but love builds up” (1 Corinthians 8:1), a reminder that efficiency must not come at the expense of trust and human connection.
A Sector in Transition
The shutdown of 229 bank branches marks a turning point in Nigeria’s financial landscape. It reflects a sector adapting to new realities, not retreating from them.
Experts say the future of banking in Nigeria will depend on how well institutions manage the transition; by investing in cybersecurity, retraining displaced workers, and ensuring that digital growth does not leave vulnerable populations behind.
For now, one thing is clear: the bank has moved from the roadside to the smartphone. And as Nigerians adjust to this new reality, the challenge will be ensuring that progress remains inclusive, secure and humane.
As the Bible notes, “The prudent see danger and take refuge” (Proverbs 22:3). The task before Nigeria’s banking sector is to see both the promise and the perils of digital banking and respond wisely.
