Nigerian Fintechs Are (Gradually) Embracing Generative AI In Strategic Shift
Generative Artificial Intelligence (genAI), still in its nascent stages within the tech landscape, is emerging as a promising tool for customer engagement and marketing efficiency in Nigeria’s burgeoning fintech scene, new findings suggest.
Despite relatively low adoption rates, Generative AI is garnering growing interest in content creation/communication and workflow automation, with adoption rates of 29% and 14%, respectively, per findings captured in the “Nigeria Fintech Marketing Outlook 2024” report.
Limited awareness, technical challenges, and regulatory uncertainty are among the factors found to be slowing the adoption of artificial intelligence. Its significantly greater use in content creation (as opposed to workflow automation) is tied to a relatively lower technical barrier and typically greater emphasis on customer engagement among players in the notably competitive fintech landscape.
The report, prepared by industry operators Charles Anijekwu and Jeremiah Ajayi in collaboration with Africa Fintech Summit, provides a comprehensive analysis of key trends shaping the industry’s marketing strategies, drawing from insights gathered through a survey of marketing leaders across diverse major fintech categories.
Respondents included James Praise from Bujeti for Business Financial Management, Ogunkunle Ayodele from Bumpa for Merchant Payments and POS, Stanley Ogwaro (former) from InterSwitch for Digital Payments Infrastructure, Ebuka Chidube from PiggyVest for Savings and Investment, Olamide Adurota from Risevest for Investment and Wealth Management, an anonymous respondent for Cryptocurrency Exchange and Trading, and Charles Anijekwu from Renmoney for Digital Lending.
“The bull run of 2020 to 2022 encouraged growth at all costs because capital was cheap. So, Nigerian fintechs deployed bold but expensive acquisition campaigns like signing Africa’s biggest music superstars as influencers & ambassadors, sponsoring reality TV shows like Big Brother Naija and buying out large Out-of-Home (OOH) displays for extended periods,” writes media entrepreneur and fintech operator Benjamin Dada, in the Foreword.
“The funding winter of 2023 made many startups go lean to extend their runway. Expectedly, marketing budgets were slashed thereby taming growth initiatives,” he adds.
The survey revealed, amongst a trove of other insights, that paid advertising emerges as the dominant channel for customer acquisition, accounting for 33.3% of acquisition efforts.
Programmatic advertising and content marketing closely follow, each contributing 19.0%, reflecting the industry’s embrace of sophisticated digital marketing techniques. Traditional channels like field sales and events play a diminishing role, with 4.8% and 9.5% contribution, respectively, highlighting a shift towards online resources for information and decision-making.
Customer acquisition costs (CAC) vary across different fintech verticals, with some experiencing higher costs than others. Verticals such as Merchant Payments and POS, Investment and Wealth Management, and Digital Lending exhibit high CAC, attributed to fierce competition and targeted customer bases.
Conversely, Business Financial Management and Savings and Investment demonstrate moderate CAC, reflecting broader target audiences and lower acquisition hurdles.
Strategic allocation of marketing budgets is another key focus of the report. A significant portion (50%) of the budget is allocated to the most effective channels across most verticals, emphasizing a data-driven approach to resource allocation.
Notably, digital payments infrastructure (Interswitch) stands out, allocating 70% of its budget to the most effective channels, signalling the industry’s emphasis on maximising returns and efficient customer acquisition.
