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Yvonne Elaigwu Foresees Convergence in Digital, Traditional Banking Systems

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Yvonne Elaigwu

Yvonne Faith Elaigwu is an experienced manager with a demonstrated history of working in the financial services industry and the Corporate Social Responsibility (CSR) space some of which include the UBA Foundation and Oando Foundation.

She is skilled in people management, negotiation, business planning, events planning, analytical skills, and sales. She has a Master’s degree focused in Environmental Management from the University of Lagos.

Yvonne Elaigwu is currently the Head of Operations at OnePipe, a foremost fintech API company and a Trustee at Open Banking Nigeria. In this interview, she discussed the future of the payment system in Nigeria, revealing the trends that will drive growth in the Nigerian financial tech space.

Kindly give us a brief description of who you are and your professional background?

I studied Human Anatomy at the University of Maiduguri with the goal of being a genetic engineer. Then I got a job! My first job was an Operations role and I quickly found that I enjoyed being a part of the team in the backend that provided the support and structure that ensures that all goes well. Every role I have occupied since then has been Operational in nature. I have been doing this now for over 12 years across the NGO space, banking, CSR and now in the technology space. Somewhere in between these jobs, I got a master of Environmental Management degree from the University of Lagos.

How would you describe the position of the current payment systems that are available in the Nigerian business space today?

I’d say our payment systems are growing and evolving. Transaction volume and value are growing exponentially, NIP transactions alone in 2020 were over N235 trillion which is nearly 100 times more than the e-payments transaction less than about 8 years ago. The COVID-19 pandemic literally forced the world to prioritize contactless interactions and the payment system was not excluded. This is probably one of the drivers of the rise and adoption of payment via transfer; Pay With Transfer.

About 10 years ago, the value of NIP transactions was 4,449,654 as reported by the Central Bank of Nigeria (CBN) less than 2% of the 378,100,749 pulled in by POS terminals and ATM machines. I remember a time when every saloon and corner store was hustling to get a POS machine from their banks. It was the new in-thing and everyone needed a machine to receive payments. The store owner and customer both relied on the POS slip to confirm that a transaction was successful. It’s interesting that these store owners and merchants had bank accounts but did not think to accept payments directly into them. Today, the concept of Pay With Transfer is so accepted that the cab driver, who before now would only accept cash, (who probably never went through the POS stage) would, without much ado share an account number to receive payment for his services. Data supports this shift and growth, the CBN report on e-payments showed that in 2020, “pay with transfer” NIP volume was about 200% more than the volume of payments made on both POS terminals and ATM machines and significantly more in transaction value.

Businesses are more now comfortable with receiving payments digitally, most businesses today are profiled to receive payments digitally and this is evidenced in the fact that the transaction value and volume of all e-payment platforms are consistently growing.

What are your views on digital currencies? Do you think that they will eventually be implemented in our economy?

I am no subject matter expert here, but it looks to me that they are here to stay. Like all new “products”, they would come with their teething problems, bugs and losses. Costly mistakes would be made and lessons would be learnt. The Luna scenario of the last couple of days taught me and hopefully the ecosystem that “it’s not really stable unless it is pegged against actual money sitting in a bank account”. It’s like purifying gold, at the end of the day, impurities would be removed and a gem would emerge. While it may take us some time as a country or an economy to get onboard with a new technology (e.g. like it did with mobile networks and cell phones), we eventually catch on and make up for the lost time. I personally believe that once digital currencies are established, and become relatively more mainstream, they would be implemented and even encouraged in our country. This would probably take time, but it is very likely to happen.

What are the trends that will shape the financial space in Nigeria in a few years to come?

I think that the concept of Embedded Finance will take root and grow/shape the Nigerian financial space in a short time from now. This would be evidenced in close partnerships between traditional banks, lenders and BaaS companies to enable merchants and “regular” entities like the distributors, cooperative societies, farmers’ associations etc to provide financial services to the last mile customer. This would improve financial literacy and bank more customers. The thinking is that the farmer who has been “acquired” by his association of farmers, would know to ask that entity for a loan to grow his farm. This entity knows him and his operations intimately enough to offer him this facility. The same can happen with the distributor who acquires his retailers and offers them banking services. What would now begin to happen is that last mile customers are becoming more banked, where they are now incentivised to save their funds within the banking system in order to create transaction trails that make them eligible for credit facilities to grow their businesses and take care of pressing needs.

I also think that we will also begin to see simplified and more secure payment methods as people continue to embrace “pay with transfer”. Data already shows that people are gravitating toward this mode of payment and the failure rate of card transactions is not making it harder. In the future, the relevance of card payments would be minimized, thereby reducing the associated fraud incidences accompanied by card payments.

In what way would you say that technology is impacting the financial sector in Nigeria?

With a mobile network coverage of 99% and data from the 2019 Jumia report on Nigeria that shows that 87% of Nigerians are mobile network subscribers, it means that technology, when properly directed, can be the tool to reach the unbanked and educate the underbaked.

The rise and proliferation of technology startups in the finance space is the first glaring way that we see technology impacting the finance sector in Nigeria. The prevalence of technology has made it possible for enterprising Nigerians to build solutions that can change people’s lives. These ventures have over the years attracted billions of dollars worth of capital into the country, provided employment to thousands of people and in 2021, technology startups contributed about 10% of Nigeria’s GDP.  These technology-driven companies are building and shipping solutions targeted at the unbanked and underbanked in the country and making them available on progressive web apps, downloadable apps, USSD and POS machines. The chances that an individual in the remote village of Obagaji, Agatu where I come from (where there is no physical bank) with a mobile phone (any kind of mobile phone) is able to access a financial service today is very high and attributed to technology, driven by technology companies.

Technology has made it possible for the regular person to have access to resources on financial instruments, concepts and data with which they can make informed decisions to improve their life conditions-everything is a google search away.

Digital banking versus the traditional banking system, do you think there will be a convergence?

Eventually, yes. While digital banking is the “now” and the future, traditional banks are here to stay and will need to come to a place (probably are in that place already) where they decide between fighting digital banks, competing against them or partnering with them. We are beginning to see partnerships in the US, Europe and even here in Nigeria between traditional banks and digital banks to birth the concept of Embedded Finance, which is a relatively new concept. We expect to see more of these in the future.

As head of operations at OnePipe, what excites you about working in a startup business in Nigeria?

The challenge of building new products and systems; the joy and feeling of satisfaction from being a part of birthing something that has the propensity to change lives and influence people and economies.

Give us one practical example of a business that gained from the successful solution that OnePipe has delivered to them?

Omnibizz, a unified distribution platform in the FMCG space digitized their operations in the wake of the COVID-19 pandemic. Omnibizz worked with OnePipe to embed financial services such that their customers can now pay directly into the account of their retailer. Their retailers can also place orders, track their sales, pay for their orders, apply for credit and get approved without leaving the digital platform provided to them by Omibizz. This has reduced and will continue to reduce the dependence on cash transactions with the attending risks. It offers seamless payments, an opportunity to bank the underbanked retailer and possible credit to grow their market

What are your winning strategies for managing people who work with you, both internally and externally?

I default to treating people how I want to be treated, I also try to understand people and learn how to communicate with them.

In terms of getting the operations of a business right, what is that one piece of advice that you would offer to women who choose to launch startups in Nigeria?

In terms of operations, I would advise that you decide very quickly on the type of company you want to build and find one person whose job it would be to help champion that from the scratch. When building a startup, operational practices may not be top on the list of most important things for the company because you’ll be building products, finding product-market fit and generally just figuring out. With at least one resource dedicated to ensuring that you incorporate standard best practices into your operations and course-correct as you go, you are less likely to run into heavy-duty operational headaches in the future.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

Banking

Digital Transformation Solutions for Banking

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digital transformation solutions for banking

Digital transformation is a hot topic in banking. Banks are looking for ways to become more agile, to better serve their customers, and compete in a digital world. In this article, we’ll discuss the digital transformation solution for banking. Keep reading to learn more about digital transformation and how it can help the banking industry.

What is digital transformation?

Digital transformation is the process of transforming how an organization operates to better meet the needs of its customers and employees. It includes changes to organizational structures, processes, and practices that allow the business to take advantage of digital technologies and channels to improve performance and outcomes. Digital transformation can be applied in any industry, but it’s particularly relevant for businesses in highly regulated industries like banking, where there are large legacy systems that need to be modernized.

Banks are under pressure from both consumers and regulators to upgrade their technology infrastructure. Consumer demand for new services like mobile banking and payments has put pressure on banks to offer digital experiences that are fast, convenient, and secure. At the same time, regulators are increasingly focused on ensuring that banks have robust cyber security measures in place to protect customer data. Digital transformation can help banks address both of these challenges by helping them modernize their technology infrastructure and improve their cyber security posture.

What factors should banks consider when digitally transforming?

digital transformation solutions

There are a number of factors that banks must take into account when planning their digital transformation. One of the most important is to ensure that the new architecture can support multiple channels and devices. This will allow customers to interact with the bank in the way that is most convenient for them. They may want to use the bank’s website on their computer, their mobile phone, or even a tablet. They may also want to use the bank’s services through social media, such as Facebook or Twitter.

Another important factor to consider is the range of services that the bank offers. The architecture must be able to support not only traditional banking services but also new services that are being developed specifically for the digital age. These may include things like mobile payments and money transfers.

The final factor to consider is the security of the new system. Banks must ensure that their customers’ data is protected at all times. This includes both the data that is being transmitted through the various channels and devices, as well as the data that is being stored.

Developing an architecture that can accommodate multiple channels and devices is essential for banks that want to undergo a successful digital transformation. It will allow them to provide a range of services that meets the needs of their customers, and it will ensure that their data is always protected.

What benefits will be seen once the solution is implemented?

digital transformation solutions

The banking sector is under pressure to invest in digital transformation to remain competitive and meet the needs of customers, who are increasingly using mobile devices and online channels to conduct transactions.

There are several benefits that banks can expect to see once they implement digital transformation. First, banks can improve customer experience by making it easier for customers to conduct transactions through convenient online and mobile channels. In addition, banks can reduce costs by automating processes that were previously done manually. This will allow banks to operate more efficiently and make more money available to invest in other areas such as product development and customer service. Finally, digital transformation can help banks stay ahead of the competition by enabling them to offer new services that cater to the needs of modern consumers.

Cloud migration is a popular digital transformation solution for banks.

digital transformation solutions

Cloud Migration is one of the many digital transformation solutions for banking. It is the process of moving enterprise applications and data to the cloud. The benefits of cloud migration include improved efficiency, scalability, and agility. Cloud migration can also help reduce costs and improve security.

There are many factors to consider when deciding whether or not to migrate to the cloud. One of the most important is the business case. The benefits of cloud migration need to outweigh the costs. Another consideration is the readiness of the organization to move to the cloud. The organization must have the right infrastructure, processes, and culture in place to be successful.

The cloud can be a complex environment and not all applications are suitable for migration. Applications need to be evaluated to see if they are cloud-friendly. They need to be able to run in a cloud environment and be able to scale up and down as needed.

Once the decision to migrate to the cloud has been made, the organization needs to develop a plan. The plan should include the steps needed to migrate the applications and data. It should also include the resources needed and the estimated time to completion.

The cloud migration process can be complex but there are also many benefits to be gained. Organizations that are able to successfully migrate to the cloud can improve their efficiency, agility, and scalability. They can also reduce their costs and improve their security.

Banks can use big data analytics to digitally transform their organizations.

digital transformation solutions

Big data analytics is one of the solutions that banks are turning to in order to stay ahead of the curve.

The use of big data analytics can help banks to gain a better understanding of their customers, and to identify and understand potential risks. It can also help banks to improve their customer service, and to develop new products and services.

Big data analytics can help banks to make better decisions by providing them with insights that would not be possible to obtain using traditional methods. It can also help to improve the efficiency of banking processes and to reduce costs.

The use of big data analytics is becoming increasingly important, and banks that don’t embrace it will likely find themselves at a disadvantage. Those that do adopt big data analytics will be in a better position to take advantage of the opportunities that digital transformation solutions present.

Digitally transform your banking business.

Digital transformation solutions are important for banking because they can help organizations to improve customer experience, increase efficiency and agility, and reduce costs. Overall, these solutions can help banks to compete in the digital age and provide better services to their customers.

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Banking

First Bank Woos Female Entrepreneurs with Single-Digit Loans

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First Bank Sympathy Letter

By Adedapo Adesanya

First Bank of Nigeria Limited has announced the launch of the FirstGem fund — FirstGem loan, a single-digit loan scheme, targeted at female entrepreneurs in the country.

In a statement signed by Mrs Folake Ani-Mumuney, the bank’s Group Head, Marketing and Corporate Communications, it was stated that the scheme was exclusively designed to put women at an advantage in contributing to the socio-economic development of the country.

She said, “we are delighted with the role our FirstGem product plays in creating an avenue to enlarge the business activities and endeavours of female entrepreneurs across the country.

“Our FirstGem value proposition offers real solutions to constraints encountered by female entrepreneurs and working professionals, as it exposes women to opportunities for the advancement of their business.

“We implore every female business-minded individual to take advantage of the FirstGem loan as it puts them at an advantage to contribute their quota to the national economy.”

Mrs Ani-Mumuney said the FirstGem loan scheme was designed for female-owned or partnered SMEs who were into food/beverage processing and packaging, beauty and cosmetics, confectionaries, catering and restaurants, transportation (Logistics) and agric/agro-allied (retail value chain).

She said that the FirstGem loan with an interest rate of nine per cent per annum was a collateral-free loan available to the bank’s existing and prospective female customers, adding that customers could access loans from N500,000 to N3,000,000.

Mrs Ani-Mumuney said that FirstGem launched in 2016 had been impactful in driving financial inclusion, influencing women’s empowerment through gender-advancement programmes, financial literacy, wealth management and building an investment portfolio.

According to her, FirstGem is designed specifically to meet the needs of the female gender, aged 18 years and above.

She also said that the loan was targeted at a broad spectrum of women, working professionals, entrepreneurs or market women through an array of benefits such as free business advisory services.

She listed other benefits as access to finance, specialised training on business development initiatives, regular insights on business/investment opportunities and mouth-watering discounts at partner merchant outlets.

Mrs Ani-Mumuney urged female-owned or partnered SMEs to visit the bank’s website to access the loan, urging them to download and fill out the Retail Loan Application Form and submit the completed form to the nearest FirstBank branch with accompanying documents.

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Union Bank’s Acquisition: Titan Trust Bank Aims for Market Dominance, Targets Tier 1

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TITAN TRUST BANK LOGO

By Oluwafemi Adeoye

With the recent acquisition of Union Bank of Nigeria (UBN) Plc by Titan Trust Bank Limited (TTB), a deal that took stakeholders by surprise last year, the latter is now positioned to maintain its lead as a technology-driven tier-1 bank, OLUWAFEMI ADEOYE writes.

When Titan Trust Bank Limited (TTB), one of the three newest entrants into the Nigerian banking industry, began operations in October 2019, many people gave it just a passing glance, but after a few years, the achievements of the lender have taken industry watchers by surprise.

Established on the 12th of December 2018 with a solid post-capitalization financial base in real cash, the bank has proven that it is ready to compete with long-standing and well-rooted Nigerian banks.

In pursuit of an expansionary course with the objective of building a stronger brand capable of taking on a larger market share of a continent striving for financial inclusion, the lender which is on a mission to take advantage of the identified gaps in the banking sector and address the unmet needs of the retail mass market, SMEs and corporates, again took the industry by surprise after it announced its acquisition of 89.4% interest in 104-year-old Union Bank, but later upped the stake to 93.4%, in barely four years of its existence.

Its expansionary drive could not have come at a better time with Tier-1 banks moving to HoldCo structures, FinTech standing as the next big thing, and the African economy desperately in need of strengthened financial systems.

The deal, regarded as one of the largest acquisition deals in the history of Nigeria’s banking industry, with an off-market deal worth N191 billion, was however formalized recently with Tropical General Investments Limited (TGI Group), the parent company of TTB, becoming majority shareholder and core investor in Union Bank.

The acquisition stands as the biggest in recent years, dwarfing the N120 billion Crown Mills paid to acquire Dangote Flour Mills and the N91 billion NIPCO paid for a majority share in Mobil Nigeria, capital market analysts noted. Also, this is the biggest deal in the banking space since the N72 billion merger between Access Bank and Diamond Bank Plc.

This is, however, not the first time that a smaller bank will acquire a bigger one in Nigeria, it is however the first time that an unlisted bank, which is barely four years old, will be acquiring a listed, century-old bank.

It is worthy to note that TGI Group, having been in Nigeria for over 3 decades with an established track record of successfully establishing and profitably running all their subsidiaries, is the perfect investor for Union Bank as they are evidently here for the long run rather than short term investors. This will obviously provide Union Bank with a lot of stability and the established expertise of TGI and the team that they have put together to make Union Bank a bank of the first choice for Nigerians in the very near future. Business analysts have, however, described the deal as a win-win for Nigerians and the Nigerian economy.

The completion of the Titan-Union deal has also seen the exit of the former board and management team of Union Bank and the emergence of Mr Farouk Mohammed Gumel and Mr Mudassir Amray as its board chairman and new Chief Executive Officer (CEO) respectively, effective June 2, 2022. Other board appointments under the new ownership of the bank include Mr Andrew Ojei, Alhaji Abubakar Mohammed, and Mr Lawrence Mackombo – all Non-Executive Directors.

But unknown to many, since the inception of TTB in October 2019, the bank has been on an upward trajectory and has further positioned itself as a challenger bank.

At the start of its operations, the management team led by Mr Mudassir Amray, the current chief executive of Union Bank, and Mrs Adaeze Udensi (current acting managing director of TTB), drew up a holistic and integrated approach to business modernization, which has formed the foundation for the bank’s superior customer-centric experience.

The impact of this strategic decision led to a positive impact on the bank’s performance within its first three months of operations where the bank recorded a profit after tax (PAT) of over N600 million.

In its determination to take financial services to every household in order to drive effective inclusion and participation in the recovery and growth of Nigeria’s economy, TTB invested substantially in technology and developed fully integrated service models that enable its customers to enjoy banking services through a wide range of channels. The bank believes in innovation, creativity, and the use of technology to enhance the lives of its customers while it also strives to ensure that its products and services are meeting the changing needs of its customers.

Recently, TTB launched and deployed the latest version of Oracle’s FCCM module, powering our AML/CFT infrastructure, used in over 120+ sites by top global banks. It has also invested in top-notch infrastructure for AML/KYC, as well as the Oracle Financial Services Analytical Application (OFSAA) to ensure rigorous analysis and measurement of its risk-performance objectives.

In less than three years of operation, TTB has grown to earn the confidence of the banking public, offering quality banking services with cutting-edge technology that enables its customers to enjoy banking services through a wide range of channels.

Therefore, with its recent acquisition of Union Bank, one of Nigeria’s long-standing and most respected financial institutions with a network of over 293 sales and service centres and over 937 ATMs spread across Nigeria, analysts believe the deal may trigger a fresh competition among money deposit banks in the country.

The lender has exhibited a grand ambition to mature to a Tier-1 bank in the next five years and is banking on its vast digital banking, strength to disrupt a space where the big five banks commonly known by their initials as FUGAZ hold sway.

The acquisition eases the path for TTB to become Nigeria’s sixth biggest lender, with Union Bank’s assets climbing in valuation to N2.6 trillion at the end of 2021 and Titan’s standing at N246 billion as of December 2021.

According to Mr Tunde Lemo, chairman of Titan Trust Bank, with the combination of TTB, a tier-3 bank, and UBN, a tier-2 bank, “we are going to see the emergence of a tier-1 bank.”

“Union Bank is one of the largest in terms of network. But we think that after 104 years of operation, it can be rejuvenated by a bank like Titan Trust Bank that has cutting-edge modern banking skills.

“We believe that by combining fintech strength with the brand value of UBN, we can make an impression in Nigeria by deploying modern banking to every nook and cranny of the country.

“The deal represents a unique opportunity to combine Union Bank’s longstanding and leading banking franchise with TTB’s innovation-led model, which promises to enhance the product and service offering for our combined valued customers.

“So, there will be a significant synergy between the two institutions,” he said.

With the new development, the bank is poised for market dominance in the financial services industry, especially in the retail segment.

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