Nigeria’s banking landscape is undergoing a profound structural shift as Deposit Money Banks (DMBs) shuttered 229 physical branches within a single calendar year.
Data from the Central Bank of Nigeria’s (CBN) 2024 financial sector statistical bulletin reveals that the total number of branches across the federation fell from 5,373 in 2023 to 5,144 in 2024. This contraction persists despite a marginal increase in the number of licensed banks, which rose from 33 to 35, highlighting a strategic pivot away from traditional brick-and-mortar operations toward digital-first service delivery.
The mass closure of physical outlets coincides with an aggressive surge in electronic payment adoption, specifically via Point of Sale (POS) terminals. According to the apex bank’s statistics, the volume of POS transactions jumped by 33 per cent, rising from 9.85 billion to 13.08 billion. More significantly, the total value of these transactions more than doubled from N110.35 trillion to a staggering N223.27 trillion, representing a 102 per cent year-on-year increase and cementing POS as the primary channel for retail financial interactions in the country.
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Geographically, the contraction in physical presence was felt most acutely in Ebonyi State, which recorded the highest decline nationwide, losing 89 branches to leave only 31 operational centres (about 75% of its bank branches in a single year). Even Lagos State, Nigeria’s undisputed financial nerve centre, was not immune to the trend; it shed 11 branches, though it remains the dominant hub with 1,521 outlets. Other states such as Oyo, Niger, and Ekiti also saw double-digit reductions, signalling that the digital transition is permeating both commercial capitals and semi-urban regions alike.
Conversely, Automated Territorial Machine (ATM) usage appears to have reached a plateau, showing a negligible growth of less than one per cent in transaction volume. While POS terminals are becoming ubiquitous in markets and residential neighbourhoods, the value of ATM transactions rose only slightly by three per cent to N29.12 trillion. The disparity suggests that the convenience of agent banking and mobile wallets is rapidly displacing the traditional culture of cash withdrawals at dedicated bank-owned machines.
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Industry analysts attribute this migration to the convenience offered by burgeoning agent banking networks and the recurring episodes of cash scarcity that have pushed consumers toward informal retail payment solutions. The 2025 KPMG West Africa Banking Industry Customer Experience Survey corroborates this, noting that fintech leaders like OPay and Moniepoint are increasingly perceived as primary financial channels. These platforms continue to outperform traditional lenders in “Time and Effort” metrics, offering reliable uptime that brick-and-mortar institutions struggle to match.
Performance Comparison: POS vs. ATM
| Metric | Point of Sale (POS) | Automated Teller Machine (ATM) |
| Transaction Volume (2023) | $9.85$ Billion | $1.01$ Billion |
| Transaction Volume (2024) | $13.08$ Billion | $1.02$ Billion |
| Volume Growth (%) | $33\%$ | $<1\%$ |
| Transaction Value (2023) | $N110.35$ Trillion | $N28.21$ Trillion |
| Transaction Value (2024) | $N223.27$ Trillion | $N29.12$ Trillion |
| Value Growth (%) | $102\%$ | $3\%$ |
The shrinking physical footprint also reflects the broader challenges faced by traditional banks in meeting the evolving needs of Small and Medium Enterprises (SMEs). The KPMG report highlights that customer experience in the SME segment has remained stagnant, largely due to structural constraints within traditional banking frameworks. As fintechs entrench themselves in daily savings, credit, and agency banking, the reliance on formal banking halls is diminishing, forcing a total rethink of how financial services are designed and delivered to the Nigerian public.
As the 2026 fiscal year progresses, the banking sector remains at a crossroads, balanced between regulatory compliance and the pressure to innovate. While trust and integrity remain the pillars of public confidence, the Nigerian consumer’s patience with failed transactions and complex manual processes is thinning. The ultimate survival of traditional institutions now appears tethered to their ability to integrate digital speed with the security of legacy banking, even as the “bank branch” as a physical entity continues to fade from the Nigerian high street.
