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Kuda Bank Review: Is it safe to use in Nigeria?

Kuda Bank Review: Is it safe to use in Nigeria?

Banking with a digital bank is on the rise in Nigeria. Thanks to a young internet-savvy population and increased mobile penetration, digital banks have brought a whole new world of opportunity in the financial space.

Traditional banks have certainly made our lives easier, from making transfers easy to providing different ways for us to do simple things like pay bills, recharge lines, pay subscription and many more. With these advantages, comes the disadvantages like unusually high charges, maintenance fees and the likes.
The ease of being able to open and operate an account in minutes from any location, compared to the number of processes it takes in traditional banks have also opened up the space. As a result, there has been a rise in digital banks using digital innovation to solve financial issues.Kuda bank is mobile first and they have no physical bank to carry out transactions. This means that all its transactions are carried out on mobile.

What is Kuda Bank?

Kuda bank is Nigeria’s first mobile-only bank licensed by the Central Bank with registration number RC 796975. Kuda bank is not your regular bank because it does not have a head office or branches all over the country, all its transactions are carried out on mobile. The bank comes in with many amazing features, like zero card maintenance fees, free transfers, automatic savings and more.

Brief History of Kuda bank

Kuda bank journey started few years back with the name Kudimoney, this bank was able to see and learn a lot about the frustrations people go through with traditional banks. So kuda bank grew its teams and put in work to bring out a great vision of different kinds of bank to life. Along the line, Kuda bank wanted to build a bank that people would love, so they decided to change from Kudimoney due to the frequent adoption of the “kudi” name by other Fintech startups to Kuda bank as we have today.

About the CEO

Kuda bank is headed by CEO Babs Ogundeyi. He had his tertiary education at Brunel university, London. He has used majority of his career in working in the boundaries of financing in the private and public sectors in Nigeria.

Kuda Bank Review:  Is it safe to use in Nigeria?

Features of kuda bank

1. Mobile-first

For Kuda bank, they are mobile-first. This makes a lot of sense as the Nigeria Technology market is a largely mobile dominated market. The statistic reports in 2018 shows that there were 49.4 million mobile phone internet users in the country and this figure is projected to grow to 76.3 in 2023. Being mobile-only is a great way to start, especially as quite a number of people do not enjoy the physical banking experience (stress from standing in queues, etc.).

2. Flexibility

Talking about efficiency, the flexibility of the bank’s operation has surprised and excited its users. A significant aspect of this is that you would get your Kuda card delivered to your doorstep; no other bank does this.

Also, there is a 250,000 naira limit on a Single Transfer, 1 million Naira maximum in a day, 500,000 Naira on POS, 30,000 naira single withdrawal on ATM. Limits does not matter because there are NO CHARGES!!

3. Customer service

While they do not run a 24/7 customer service as noted by some users, follow up responses to their messages and inquiries were swift and near-instant.
Users love a product with which they would not experience unnecessary issues. And if they do, they want to be able to resolve those issues immediately. Traditional banks do not provide these; Kudabank does.

In fact, Hubspot reports that over 90% of customers rate an immediate response as “important” when they have a customer service issue. “Immediate” here is defined as less than 10 minutes.

4. Next-to-zero (Bank) charges

Traditional banking institutions have thrived on bank charges. Inter/intrabank transfer charges, SMS alert charges, card maintenance charges and more are frequent financial burdens that their users have to take up. Kuda bank has reduced this to the barest minimum.

Kuda does not charge a card maintenance fee, neither do they do SMS alert charges. Currently, Kudabank users gets 25 free transfers every month. Kudabank has predicted this move in order to save its users an amount of up to #1,312.5 monthly and #15,250 yearly when using traditional banks.

5. Additional account benefits

Asides just being a bank to you, with Kuda bank you also have a savings feature where you can set it to save a particular amount whenever you spend money from your account. This savings feature is great as before the advent of Fintech, products solely focused on savings, the bank account also served as the savings product. But no deliberate action was done to make the “savings account” experience better for users.

6. Kuda bank app download

Kuda bank is optimized for mobile users, it is available for both android users and of course IOS users. All you have to do is to visit your app store, search for Kuda bank app, download and install into your phone.

7. Kuda bank referral

Kuda bank has a referral system that pays you 200 naira for every user that you refer and that signs up with your referral code

8. Kuda bank account opening/registration

Unlike other traditional banks where you have to visit before you can open an account, kuda bank account can easily be opened in minutes, after filling the KYC form on the app.

How Does kuda bank make money?

Like regular banks, kuda makes money by using collective deposits to make risk-free investments backed by the government. kuda bank also makes money from service fees, sellers pay them when people like you shop with your Kuda Card. They are practically doing what the regular banks are doing, but with less overhead costs, because they do not build branches that need maintenance, they do not have employees of different pay grades, they do not use fleets of cars to move their account officers around. They invest more in the technology that drives the fintech industry.

Is Kuda Bank Safe?

Yes, your money is safe with kuda bank. All accounts are secured with the same high-security encryption other local banks use.
Money kept with banks (deposits) do not exactly sit there, but they are matched to be given out as loans to those who are in need of them now and would pay back later with interest. Alternatively, they are invested into businesses that provide yields from which the actual owner of the deposit would get paid a portion as interest, or gets paid nothing out of it, this depends on the class of account, whether it is current or savings.
Kuda would technically invest the retained balances of monies that are kept with them, and the proceeds of the investments are used to subsidize fees such as transfer charges, card maintenance,etc and everybody is happy.

 

Summary of Kuda Bank App

Kuda bank is able to function due to the advancements in technology and the transfer of the business to the digital space which seems quite accommodating for any size of busines. it is definitely worthwhile as it moves in the right direction for the financial institutions in Nigeria.
It is important to note that this bank is not entirely independent of other retail banks. For instance they require BVN for verification and you need a bank account to have registered for the Bvn.

Conclusion

Kuda bank is a digital only bank that runs predominantly on smartphones, though they also have a USSD channel. This means that, one do not need physical locations to provide full banking services. Being digital only means you save all the money you would have spent on maintaining branches, as a result kuda bank can afford to charge a lot less than other banks do.

The fantastic features available for users is enough to entice anyone, especially when people hear about the prospect of running any kind of transaction for so little or free.
In the end, Nigerians (and also Africans) would choose products that serve them better and hit them at the exact point of their needs.

 

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