The Nation Newspaper

Category: e-Business

  • Firm mulls training centre in Nigeria for skills transfer

    A technology firm, Mart Networks Nigeria Ltd, said it will establish training centre in Nigeria to complement government’s drive to provide jobs, empower small, medium enterprises (SMEs) and transfer information technology (IT) skills to the country.

    The Managing Director, Mart Networks Nigeria Ltd, Mr. Moiz Maloo, who spoke to reporters on the sidelines of its partner event and unveiling of enterprise solutions for data centres and SMEs in Lagos, said the firm is also looking at launching a training centre in the country through CLC Africa a training entity owned by the Mart Networks Group to help enable partners with training in all aspects of information communications technology (ICT).

    He stressed the  importance of educating the local market on the direction of where the industry is heading.

    “We are living in an era where technology seems to control what we do more and more with each passing day. This means the demand for data is growing hence a big demand in IT services and data centres. This is where the region seems to be heading. We urge partners to invest time and resource in the data centre space and IoT (Internet of Things).

    “Our key objective is offering cutting edge technology and solutions embedded with in depth training to our partners who can then ensure that the end customer gets the latest technology with the best local support available,” he said.

    The firm, part of the Mart Networks group that has a distribution network spanning the Middle East and Africa with over 20-year experience in the industry in over 20 countries with local presence in eight countries, it has a partner base of more than 1000 partners.

    Maloo said the firm strives to provide cutting edge technology by partnering with vendors that are leaders in their areas of specialisation ranging from solutions for the enterprise market and SMEs, adding that it prides itself in being a one-stop-shop for all IT solutions by distributing products for global tech giants such as Sophos, Siemon, Arista networks, all leaders in network security, data centre cabling and data centre switching respectively.

    “In addition to these solutions, we also distribute other enterprise solutions from Edgecore (switching and wireless), 24 online (internet management), Neox (IP PBX). In addition, we partner with vendors such as Netgear, a leader in SME networking solutions for switching, wireless, routing and storage. Aside that, we have GIGANET (structured cabling, SME switches, CCTV), Zycoo (IP PBX) among other solutions needed in the SME space,” he said.

    Regional Head for Siemon, Mr. Olajide Olagbenro spoke about cabling and other data centre solutions that Siemon offers.

    He said buildings are now becoming smart and apps such as CCTV, lighting, access control and other solutions are moving from traditional cabling systems to internet protocol (IP)-based using Category 6A (CAT6A) and CAT 7A systems which support data rates of 10G up to 100 metres and a bandwidth of up to 500 megahertz (MHz) have started to grow in popularity.

  • MTN to go ahead with Nigeria listing

    MTN Group has confirmed it will proceed with plans to list on the Nigerian Stock Exchange (NSE) over the coming months up to 2018.

    The mobile operator presented an improved performance over the past six months in its interim financial results, despite what it described as challenging macro-economic conditions in many of its markets “with Nigeria, continuing to experience weaker naira as well as hard currency liquidity challenges.”

    Its Group President and CEO, Rob Shuter, who assumed office in March this year, said the 6.7 per cent rise in group revenue (underpinned by a 10.8 per cent growth in revenue for Nigeria) is a good start to the year.

    “I think we have made good progress and we have set out very clearly what we are asking of ourselves. We also need to get better at managing the kind of big issues and events that really come with managing a large number of complex geographies. I think we have made a respectable star,” he said.

    According to ITWeb, the telco said its Nigerian business is continuing to make progress with preparations to list on the NSE and should have the task completed in 2018 subject to market conditions.

    The telco added that Nigeria is also the market it has chosen along with South Africa for the rollout of its operational execution programme called Project IGNITE.

    MTN’s Net Promoter Score, which measures the likelihood of customers to recommend a company’s products or services, stands at 13 per cent in Nigeria – although it is much higher in the telco’s other key markets including Iran (33 per cent) and South Africa (75 per cent).

    Its Group Chief Financial Officer, Ralph Mupita, said the use of constant currency to measure financial performance provides a better visibility of the underlying operating performance of MTN.

    “If you look at all our operations across the 23 markets relative to the rand over the period, they have all weakened and so the first major impact of this is that you will see that our reported results are lower than our constant currency results if you look at revenue, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) and other main KPIs (Key Performance Indicators) particularly in Nigeria, where the weaker naira has had a significant impact on network opex (operation expenditure) and has resulted in lower margins as you will have seen at the end of December 2016,” he said.

    While Nigeria EBITDA declined 15 per cent over the six months to 30 June in rand terms, driven by the naira devaluation and network opex according to Mupita, MTN reported service revenue growth of 11 per cent in the country over the same period.

    Overall MTN, experienced a 3.6 per cent drop in subscribers to 231,8 million over the six month period, with Nigeria and Ghana recording the biggest drop. The number of MTN subscribers in Nigeria has decreased by 14.3 per cent to 53.1 million.

    Shuter emphasised the telco’s unshaken belief in the potential of its Nigeria business which has historically been its most profitable market.

    “One of the challenges for the Nigerian economy is that it is very much resource focused unlike South Africa which is a much more diversified economy, but things are looking better. Even though the oil price has not moved much, the production has increased, we see some lift coming back into the market; we are seeing more availability of foreign exchange for the kinds of things that we need to do there. Our revenues were up 11 per cent, data is up 70 per cent. It is a vibrant market and I think MTN is well placed there. I’ve actually been encouraged by our performance there in the last couple of quarters. I think things will look a lot better going forward,” Shutter said.

  • Canon to create jobs, promote skills acquisition

    A leader in imaging and business solutions, Canon, has said it will complement Federal Government’s efforts at creating jobs for the youths and also promote technical skills acquisition in the country to grow the nation’s gross domestic product (GDP).

    The Sales and Marketing Director, B2C, Canon Central and North Africa (CCNA), Somesh Adukia, who spoke in Lagos at the unveiling of the partnership with local service centres, said through the firm’s “closer to customer,” strategy, it will partner local service centres that will be manned by trained local youngsters.

    He said doing this will promote job creation as well as transfer of skill to locals, a development he said will translate to win-win for every stakeholder in the information communication technology (ICT) ecosystem.

    He said pursuant to this mission and vision, the firm has partnered with three local service centres across three major cities in Nigeria to strengthen its in-country presence and optimise its customer satisfaction. The partnership will leverage the local strength and expertise of Ensure Services, Kontakt and Technology Distribution (TD) to help create a unique business-to-consumer experience for customers.

    He said the Canon-authorised service centre initiative is designed to support the imaging community in Nigeria, while creating access to repair and offer support for industry professionals, businesses and photography enthusiasts.

    Through the three service partners, Canon will offer total after-sales product repair services in eight locations across Lagos, Abuja and Port Harcourt. The service centres will support all B2C products including DSC, DSLR, professional video, OPP inkjet- and Laser-printers, projectors and calculators under the Canon Central and North Africa warranty programme.

    He said the warranty programme is a specialised – first of a kind service, under CCNA, a division within Canon Middle East FZ LLC (CME), a subsidiary of Canon Europe.  Within the programme, Canon will offer customers an exclusive three-year manufacturer warranty for Canon i-SENSYS Laser printers.

    Adukia said: “The partnership is an important pillar in the brand’s ‘closer to the customer’ strategy which has been one of Canon’s key components for growth in Africa.

    “This is a really exciting time to be part of the imaging industry and we’re proud to be raising the bar throughout the market. This partnership clearly amplifies our commitment to bringing our customers closer to our industry-leading products while helping them to maintain the quality that encourages them to have fun with imaging through our ‘Big Partnership, Trusted Services’ motto.

    “Our setting up of a dedicated entity in Nigeria last year and the introduction of three specialised service providers is our commitment to providing the best possible services to our customers in Nigeria. We are also working towards establishing more collection points for our customers, in case they are located far away from the service locations.”

    He said to communicate the launch of the service centres, Canon will also be launching a series of roadshows – consumer engagement activities and town storms across key locations.

    He said Ensure Services is a company present in 26 countries with service delivery as their core business. Ensure Services is present in three cities in Nigeria, and within Lagos they are present in two locations; Isolo and Ikeja. It has a Canon-certified and trained team of engineers providing the best class service for customers. Canon has invested state of the art repair and calibration tools to provide best quality repair in Nigeria. Ensure also holds inventory of major spare parts for prompt repair and delivery of the products. Ensure will be responsible for providing support to the Photo video and OPP printer range.

    Kontakt is a renowned name in the sales and service of professional video cameras and equipment. Canon has invested with Kontakt in specialised tools to provide high-quality product repair. This is the only facility available out of the European region to cater to customers in the professional video, media, broadcast and film industry; namely Nollywood.

  • Senate: Delays in InfraCos licensing threatens ICT goals

    Senate: Delays in InfraCos licensing threatens ICT goals

    The Senate Committee on Information and Communications Technology (ICT) and Cybercrime has warned that delays by the Nigerian Communications Commission (NCC) in licensing infrastructure providers (InfraCos) and roll-out of service may scuttle Federal Government’s lofty objectives in the information communications technology (ICT) sector.

    Under the National Broadband Plan (NBP) of the Federal Government, it is expected that 30 per cent broadband penetration will be achieved next year from the less than 10 per cent it currently stands. One of the programnes designed to accelerate the realisation of the dream is the licensing of InfaCos to provide infrastructure in the six geo-political zones of the country with one in Lagos, ramping the figure to seven.

    While a firm, IHS Connect, a subsidiary of IHS Tower, won an InfraCo licence almost three years ago to provide infrastructure in the Northcentral, MainOne won InfraCo licence for Lagos.

    Its Chairman, Senator Buhari Abdulfatai, who gave the warning while leading a high level delegation on a working visit to MainOne’s Data Centre, MDXi in Lagos, said the Senate is ready to work with relevant agencies to ensure that Nigeria meets its ICT objectives considering the incredible capacity already available in-country.

    The Committee praised the incredible capacity available on MainOne’s submarine cable system and data centre, which it acknowledged to represent the most significant infrastructure of its kind in Nigeria. The Committee acknowledged that with this capacity already available in the country, there is no reason for the country’s broadband penetration rate to remain at the 21 per cent as reported by the NCC given the booming demand for data and connectivity services.

    Senator Abdulfatai said the delay in licensing Infracos and deploying network infrastructure after licensing posed a major threat to the achievement of the nations’ technology goals, which largely depends on broadband infrastructure to be provided by InfraCos.

    He, however, assured that the Senate will do everything within its powers to facilitate ICT/broadband development and give legal substance to ICT policies including the NBP and the Cybercrime Act.

    But speaking about preparations for licensing the remaining zones, the Executive Vice Chairman of the NCC, Prof Garba Dambatta said: ‘’We are about to conclude that process. About 60 companies submitted bids for the licensing of the remaining zones with InfraCo licences.

    “This is a massive number and as I am talking to you, we are about to conclude the selection process and very soon, by July we will come out with information about the successful bidders and those will be offered InfraCo licences subject to the conditions stated in the regulatory framework with the open access model that is driving the deployment of broadband infrastructure in the country.

    “InfraCo licences have been offered to two legal entities: MainOne for the Lagos Zone and IHS Connect, a subsidiary of IHS for the Northcentral Zone. We have been monitoring the progress so far made. For Lagos, we are quite happy about the milestones so far achieved in the deployment of fibre network; but for the Northcentral Zone, we are not happy and action is being taken to ensure that remedial measure is put in place to speed up the process of deployment in Northcentral Zone. We will come out with a statement on this very soon.”

    During the tour of the facility, he described MainOne’s data centre as a world-class facility and reiterated the importance of having Nigerian institutions host data locally within the country in order to ensure national security, drive job creation, improve the quality of online services and guarantee Nigeria’s participation in the emerging global digital transformation.

    Chief Executive Officer, Funke Opeke lauded the Senate Committee’s efforts in ensuring the development of ICT across the country via its support of homegrown enterprises.

    She urged the legislators to look  for legislations, especially in the areas that will positively impact on infrastructure development including possible interventions to address the high cost of capital crippling telecoms firms which has significantly slowed down new infrastructure projects in the country. According to her, this is critically needed to bridge the gaps in the ICT industry.

    “Nigerian content is arguably the most globally recognised African content today, but South Africa and Kenya are perceived as digital leaders in Africa because of the infrastructural gaps in the country. MainOne has made significant investments in ICT infrastructural development in Nigeria and West Africa and will continue to do so, but we require full government support to enable the ICT industry in Nigeria surpass other countries,” she added.

     

  • From Etisalat to 9Mobile: loss of brand equity, need for strategy

    Etisalat Nigeria has changed its brand name, after almost a decade of building the brand. While most companies change their names due to rebranding or expansion, Etisalat’s is that of an accidental restructuring: its foreign directors pulled out with their stakes and took their name along. Thus, the telco has adopted 9Mobile as its new brand name. Etisalat Nigeria has been a brand-driven teleco, attempting to build a movement and culture, rather than building only patronage.

    The brand, campaigns and positioning have been revolutionary, innovative and refreshing. The company started business in October 2008, riding on the “0809uchoose” campaign. For the first time, Nigerians were able to choose the phone number with digits of their preference. That was the buzz of the moment, and it drove word-of-mouth marketing for the brand, in addition to high-budget advertising. Almost a decade in the sector, and with a customer data base of 21 million subscribers, the telco has dropped its brand name.

     

    Challenge of selling

    9Mobile?

    By dropping the Etisalat brand, the telco will be losing brand equity – the commercial value of perception built around the brand over the years through advertising and promotions. According to Best Global Brands 2016 Ranking, the brand equity of Apple is $98.3 billion. This  means Apple has the potential to drive $98.3 billion in terms of revenue. Another way to look at brand equity is to look at what the company will be losing in terms of revenue without the brand. According to the same ranking, the brand equity of Coca-Cola is $73.1 billion. This is the value of loss that would be made if the brand signature “Coca-Cola” is taken off the Coke bottles! That is a phenomenal loss and is capable of dragging the company to the brink of bankruptcy. Therefore, the questions to ask are: What would be the loss to Etisalat Nigeria for dropping the Etisalat brand? Will 9Mobile resonate the soul of the Etisalat brand and the identity of 0809ja? Will 9Mobile brand exude the same whimsical brand attitude fitted into customer-centric culture? Will it fly, soar or crash?

    What has happened to Etisalat brand is not rebranding because it is not a result of a dutiful organisational strategy management but management crisis. A rebranding is a strategic process of changing or enhancing the brand of the organisation to gain competitive advantage by changing brand positioning. When it is done properly, it would be preceded by thematic or strategic analysis, and will be hinged on a new business strategy. Then the strategy will be followed up with consistent implementation, which will drive the new brand. In 2007, Apple changed its name from Apple Computer to Apple and announced iPhone1; it led to more smartphones sale. Apple has been working on a new strategy since 2011 when iPod was launched – “Create devices that will form the hub of the digital living room, where audio and visual content will be available on demand and can be networked seamlessly across multiple devices.” That was the awesome strategy that heralded the change of brand name in 2007. In the case of Etisalat Nigeria, the foreign directors who  pulled out of the company, gave three weeks ultimatum for the telco to drop the Etisalat brand name. The result could not be anything near strategy and the outcome is difficult to forecast.

    There is an opinion that Etisalat’s issue is a déjà vu of what has happened to Econet – a telco that has come to be known as Airtel. Airtel was initially known as Econet in 2001, until Econet lost its management contract and Vodacom took over in 2004. After few months, Vodacom pulled out of Nigeria and her partner, V Network took over, changing the brand name to V Mobile. In 2006, Celtel bought over Vmobile and gained 65 per cent control of the telco, changing its name to Celtel. In 2008, the entire African operations of Celtel were taken over by Zain Group and the name of the telco changed to Zain. Bharti Airtel acquired Zain in 2010 to the tune of $10.7 billion and now, the telco’s name is Airtel. This fell short of a proper case study for Etisalat Nigeria’s transformation into 9Mobile. The similarity is that change of brand name for both telcos was accidental. The difference is the nature of transformation they went through.

    For Airtel, change of brand had usually come with change of strategy, in a way that the evolving business gain more brand affinity, and more market share. This was made possible because Airtel has always been a member of a global enterprise and whenever there is a new group, local enterprise keys into the global strategy of the group. The business strategy of Airtel Africa is simply to be a network “designed specifically for smartphones. Be it for faster and clearer videos or for battery that lasts longer” Economic Times  quoted the company’s Consumer Business Director, Srinivasan Gopalan in 2014 to have said.

    This means that Airtel is positioned to provide bandwidth for products; it signaled a shift from the traditional model of selling voice calls only. The data offering and bonus packages are designed to drive the business strategy and thus, the Airtel brand is designed to communicate this promise to customers. For Etisalat Nigeria, the company is not being taken over by an international group; it is being taken over by Nigeria and Nigerians.

    This implies that a lot of work needs to be done to align 9Mobile to some strategic imperatives and take a brand positioning that is superior to that of the Etisalat brand.  Econet-Airtel story cannot therefore be used as a case study; 9Mobile is indigenous in structure and management and will need to build its own brand credibility afresh.  This is the challenge!

  • Vodacom pushes for gender parity in ICT

    Tech firm, Vodacom Business Nigeria, has decried the huge gap between male and female in the information communication technology (ICT) across the country. It described the development as challenging, adding that more needed to be done by stakeholders in the industry to redress the imbalance.

    Its Senior Product Manager, Mrs. Funke Atanda, said gender equality remained a daunting challenge which every stakeholder in the ICT ecosystem must come together to address.

    “Gender equality remains a challenge, particularly in the ICT sector, and so we realise that we should do more to bridge the disparity between male and female in this sector. By supporting ICT skill acquisition for girls, bringing females into our organisations to learn about new technologies and helping them further develop their ideas, we are able to encourage more girls to choose courses and careers in ICT. This will help increase the number of women in the ICT sector in the near future,” she said during a one-day ICT field trip the firm organised for female students from Baptist Girls Academy, Lagos.

    The forum was designed to motivate girls to choose future careers in ICT

    The firm said it was concerned by the gap between women and men in the ICT. Specifically, the firm referred to statistics provided by Nigerian National Bureau of Statistics (NBS) which showed that the ratio of Nigerian female workers to men in ICT was 3.3:1 in 2012; organised.

    According to the NBS, the share of Nigerian females in the ICT workforce rose steadily from 19.02 per cent in 2010 to 22.96 per cent in 2012, with 78,757 Nigerian females employed in the sector at that time. With companies such as Vodacom which are actively accelerating gender equality in the workplace, it is expected that the number of females in the ICT sector must have grown substantially between 2012 and now.

    She said when it comes to gender equality in the workplace, Vodacom leads as currently, 43 per cent of Vodacom’s workforce is female. Last year, promotions of female employees rose by nine per cent, while 17 per cent of the executive workforce is female. Vodacom’s working policies also allow women more flexibility around maternity leave and returning to work.

    Atanda said:  “Vodacom will continue to support and advocate for gender equality for women in and through ICT; this will strengthen their stance in the sector while continuing to improve lives of all around the world.”

    However, with the decline in the number of female candidates admitted into Engineering, Technology and ICT faculties between 2014 and 2015, it is important that more companies join in the promotion of females in ICT education in the country.

    According the NBS, of the 564 candidates admitted into the Faculty of Engineering in Lagos State, in 2014, only 129 were female. The numbers declined in 2015 with only 84 females admitted of the 414 candidates admitted into the faculty of engineering in Lagos State. By providing donations, training and support to ICT driven programmes.

  • NCC Act anachronistic, says CJN

    The Chief Justice of Nigeria, (CJN) Justice Walter Onnoghen has called for the review of the Act establishing the Nigerian Communications Commission (NCC) saying the  Act 2003 has become moribund.

    Justice Onnoghen explained that the Act called for urgent review to bridge the gap created by technological advancement in the telecoms sector following the invention of smart phones, tablets and expansion of wireless and broadband internet infrastructures in the country.

    Justice Onnoghen spoke at Ibeto Hotels, Abuja, while declaring open the 2017 Annual Workshop  for Judges on Legal Issues in Telecoms organised by the NCC.

    Represented by Justice Olu Ariwo-Ola of the Supreme Court, the CJN said: “ It is important to mention that with the enactment of NCC Act of 2003, new issues and other technological challenges that have arisen that have not been adequately envisaged,  for instance the arrival of smart phones, tablets, expansion of our wireless and broadband internet infrastructures have attracted a new breed of smart and intellectual subscribers.

    “This category of subscribers relies on their devices to perform ordinary daily activities which have made consumers privacy protection very paramount. This has given rise to more sophisticated way on committing crimes.

    “The challenges posed by this new behavioral pattern has made it imperative to review the existing act in order to bridge the gap created by this technological advancement in the telecommunication sectors.”

    He said given the importance of the telecoms sector to the socio-economic development of Nigeria, there is the need to properly regulate the sector to ensure compliance with existing law for the good of the country.

    Justice Onnoghen said it was necessary for judges to be updated with developments in the sector to ensure speedy dispensation of justice and praised the National Judicial Institute (NJI) for partnering with the NCC to organise the workshop.

    “ Over the past decade, our country has experienced a healthy increase in the numbers of service providers and consumers and this has made the sector very complicated and competitive, consequently this may result in a number of disputes and challenges that may need to be adjudicated upon.

    “This informs the need for this annual workshop and aimed at equipping the judicial officers with the legal and technical skills in telecommunications to keep them abreast of global activities” Justice Onnoghen asserted.

    NCC’s Executive Vice Chairman, Prof Garba Danbatta said the workshop has become a platform to carry the members of the bench along on developments in the telecoms industry, stressing that the sector has become sophisticated with inherent challenges bordering on cyber-security and cyber-crimes.

    Represented by the Executive Commissioner, Stakeholders Management, Mr Sunday Dare, the NCC chief said: “The proliferation of the internet and the decreasing cost of technology has provided millions of users’ access to enormous resources with a resultant increase in cybercrimes.

    “Cyber-criminals continue to develop new strategies to circumvent cybersecurity measures regardless of their sophistication. We are hopeful that in the continuing course of implementation of the cybercrime (Prohibition Prevention and others) Act 2015, cyber security will be strenghtened in Nigeria.”

  • FinTech and new face of banking

    FinTech and new face of banking

    Banking has evolved with technology. The rise and adoption of Financial Technology (FinTech) in tandem with the boost in the subscription level of mobile phone users in the country has helped to redefine the banking ecosystem. LUCAS AJANAKU reports that this rapid development can bring the unbanked into the banking sector in line with the financial inclusion and cashless policy of the Central Bank of Nigeria (CBN)

    Mr Aderemi Esan is very excited about the development in banking in the country.

    According to him, he now pays virtually for everything on his mobile phone, a development that has taken him away from the long queues both at automated teller machine (ATM) points and the banking halls.

    “I pay for evrything, including my son’s school fees within the comfort of sitting room. I also transfer money to my aged parents tresslessly on my phone,” he said.

    Over the past four years or thereabout, there has been a dramatic change in the face of banking in the country. The lenders have continued to innovate with short codes to do almost everything on the go.

    Executive Director, Lagos Business Directorate, Wema Bank, Folake Sanu, captures this development during the unveiling of  the lender’s ALAT Digital Bank in Lagos.

    She said: “With the shift to all things mobile, ALAT powered by Wema Bank, could not have come at a better time.  Over the last decade, we have witnessed how technology has revolutionised the financial sector. Indeed, many products out there in the financial market claiming to redefine the customer’s banking experience are simply making things more cumbersome.

    “At present, there isn’t that product that really captures the need of the millennial – the digitally savvy generation (Generation Y as they are fondly called) that are becoming the fastest growing segment in the world and in effect impacting economies and industries across the globe.

    “The millennials live in a digital world and are used to digital channels and social media to meet their digital lifestyle. They are in constant need of a 24-hour banking service that would fit into their lifestyles; a bank they can take with them, one without borders that offers them the opportunity to transact business anytime, anywhere and any day.”

     

    Why banks

    should  change

     

    Founder, CWG Plc & Entrepreneur in Residence at CBS, New York,  Austin Okere asked why after centuries of conservatism in receiving deposits and making loans, banks should change.

    He said there are two main issues stirring the yearning for change: The first being that it is a very difficult club to join, and hence the large population of unbanked adults. Secondly, even for the members of this elite club, the relationship is acutely skewed in favour of the banks; naturally so, as they have carried on as protected monopolies with no serious challenge or competition, resulting in no significant innovation over the decades.

     

    Banks biggest threat

     

    Centuries of relatively significant higher returns, even in the midst of economic downturns that adversely affect the real sectors has engendered an attitude of invincibility and pomposity, characterised by a loss of touch with their customers. Considered too big to fail, they take it for granted that they will be bailed out with taxpayers’ money in the event of any missteps – a perfect prey for disruption, he added.

     

    FinTech – new

    kid on block

     

    Today, there has emerged a powerful force of challenge from financial technology companies or FinTechs, as they are more popularly referred to. The promise of FinTech is great. It is shaking up a stodgy banking system and helping to build a more efficient one, especially for consumers and small businesses.

     

    Emerging markets

    show way

     

    Okere who also serves on the World Economic Forum Global Agenda Council on Innovation and Intrapreneurship, said for years, emerging economies have looked up to developed countries for ideas about how to manage their financial systems. When it comes to FinTech though, the rest of the world will be studying the experience of the emerging markets, embodied by the widely successful MPESA mobile money system, championed by Safaricom in Kenya. MPESA has made it possible for a large swathe of the population to gain financial inclusion by providing the opportunity to transact financial services vide the mobile phone, on a continent where typically 70 per cent of the population is unbanked. MPESA today has more than 60per cent of Kenya’s 33 million mobile users; not bad for a service which was only launched in 2007. Similar applications have metamorphosed across Africa.

    In Nigeria the Yello Mobile Account, jointly offered by ICT giant CWG Plc and GSM major MTN, added over 6million accounts to an early adopter, Diamond Bank, within the first year of launch. Mobile Money services are today generating 6.7 per cent of Africa’s gross domestic product (GDP).

     

    China leads in FinTech

     

    According to him, by just about any measure of size, China is the world’s leader in FinTech. It is by far the biggest market for digital payments, accounting for half of the global market, according to the Economist Magazine. A ranking of the world’s most innovative FinTech firms gave Chinese companies four of the five top slots in 2016. The largest Chinese FinTech company, Ant Financial, has been valued at about $60billion, on par with UBS which is Switzerland’s biggest bank. Today, digital payments account for nearly two-thirds of non-cash payments in China, far surpassing debit and credit cards.

    Peer-to-Peer (P2P) lenders in China grew from 214 to over 3,000 in 2015, and P2P loans increased 28 fold from 30billion yuan in 2014 to 850b yuan in 2016. Alibaba’s four year old Yu’e Bao fund with $165.6billion has emerged as the world’s largest, overtaking JPMorgan’s US government money market fund, which has $150billion.

     

    Future of banking

     

    According to Austin, there are indeed five major forces at play in this space. They are the banks – traditional and established, best with cash and ancillary instruments;  FinTechs – the new kid on the block, disrupter, mostly telecom roots, best with digital currencies and mobile services; regulators – central banks, regulating traditional banks; and communication commissions, responsible for telecoms regulation (and thus FinTechs);  currencies – traditional, such as cash and cheques; or digital, such as bitcoin or other cryptocurrencies; and customers, and the weight of their new found voice. Typically, they clamour for whatever will give them convenience and lower costs.

    Customers are the most significant force, and represented by the outermost sector of the concentric circles, he said, adding that they tend more towards a preference for digital currencies, the FinTechs will tend to assume a more prominent role in the new face of banking, and the regulatory regime will inadvertently tend towards the communication commissions under whose purview the FinTechs fall.

    This will introduce a regulatory imbroglio, as future ‘huge banks’ may fall outside the regulatory ambit of central banks (as seems to be the case with the MPESA mobile money platform, through which Kenyans transacted $28billion in 2015, representing about 44 per cent of the country’s GDP. Safaricom, the telecoms promoter of MPESA ironically falls under the regulation of the Communications Authority of Kenya rather than the Kenyan Central Bank), Okere said.

    He said if the customers however, maintain a strong appetite for traditional instruments of financial transactions such as notes and coins, cheques and others, then the current status quo will remain. The face of banking will thus be more of the same, and the regulatory authority will continue to be central banks. Between these two positions may be many variants, depending on the appetite and preferences of customers, and the pace at which they are willing to embrace change.

     

    Retailers embrace

    financial services

     

    FinTechs are not the only ones challenging traditional banks for turf. Retailers are also jumping into the financial services fray. For instance Amazon has launched Amazon Cash, a way to shop its site without a bank card. The service allows consumers to add cash to their Amazon.com balance by showing a barcode at a participating retailer, then having the cash applied immediately to their online Amazon account. This product is meant to appeal to the those who get paid in cash, don’t have a bank account or debit card, and who don’t use credit cards.

    Google is also rolling out a new integration on mobile. Users of the Gmail app on Android will be able to send or request money with anyone, including those who don’t have a Gmail address, with just a tap.

     

    Banking  going  mobile

     

    In most emerging markets and developing countries, the current formal financial system only reaches a minority of the working-age adult population. Smallholder farmers, self-employed households, and micro-entrepreneurs have to rely on the age-old informal financial mechanisms such as rotating savings clubs, moneylenders, and pawnbrokers. These mechanisms can be unreliable and very expensive. In Nigeria for instance 84.6million people, accounting for 47 per cent of the population are unbanked. In sharp contrast, mobile phone penetration is very high at 94.5 per cent; a perfect set-up for the FinTechs to exploit in their mobile dominated financial services offering.

    For policymakers from the global south, the digitalisation of retail payment systems and financial services has become an important economic development priority. It offers the prospect of reaching far more people at far lower costs with the broader range of financial services they need to build resilience and capture opportunities.

    The 2015 yearly gathering of some 300 central bankers and policymakers from 90 countries who have formed the Alliance for Financial Inclusion, dedicated the bulk of the agenda to explore such innovations, which could deepen formal financial inter-mediation of their economies.

    Imagine a world where all money is digital. Instead of carrying coins and notes in their purse, people would keep digital currency units in electronic wallets on phones, watches or other electronic devices. All of this could happen digitally the way cash is handed over today; in real time, irreversibly, with no additional fees.

  • Motorola: Radio solutions’ll tackle insecurity

    MOTOROLA Solutions Inc., an American data communications and telecoms equipment provider, has said improved use of radio solutions could help in tackling security challenges in the country.

    The Senior Sales Manager in charge of Motorola Solutions for Africa, Nicolas Coussinoux, who spoke to reporters in Lagos, said Nigeria has a heavy reliance on oil exports and is exposed to disruption with the presence of militant groups responsible for abductions, assassinations and bombings in oil rich Niger Delta, adding that safety and security are central to economic development and prosperity.

    He said with various industries in the country now seeing the benefits in digital technologies and have started the transition, “digital two-way radio technologies will allow business to improve efficiency and provide better service by using applications that are only available with digital two-way radio. These applications include productivity features like messaging and job ticketing, as well as features that help keep users safe like GPS tracking and automated ‘man down’ alerts.”

    Motorola Solutions stressed that with digital two-way radio, manufacturers can improve safety by ensuring emergency calls get to the right person immediately whenever there is an issue; knowing exactly where employees are anytime, anywhere in the plant or outside of it; expedite resources outside the plant to respond more quickly; making sure workers can communicate clearly in the noisiest environments; making sure workers have a radio battery that can last an entire shift.

    Coussinoux said while it may be clear that digital technologies can help fight crime and increase public safety, many agencies are still hesitant towards adoption of these technologies.

    He identified concerns around vulnerability to cybercrime and systems interoperability as factors holding them back.

    “Organisations this year seem to be more aware of cyber security, bringing a 10 per cent decrease in average total cost of damages related to data breaches. And while many of these organisations are investing in cyber security solutions and employee education to better protect themselves, others prefer simply not to migrate to digital – thus giving up on the substantial benefits of these technologies,” he said.

    Head, Marketing, in charge of EMEA at Motorola, Tunde Williams, said with digital two-way radio, Motorola can improve safety by ensuring emergency calls get to the right person immediately whenever there is an issue; knowing exactly where employees are anytime, anywhere in the plant or outside of it; expedite resources outside the plant to respond more quickly; and making sure workers can communicate clearly in the noisiest environments; making sure workers have a radio battery that can last an entire shift.

    He advised organisations to ensure they buy genuine two-way communication device from Motorola certified partners and resellers in order to enjoy regular service updates, which include software updates, information updates about cyber threats in the radio environment and more.

  • Complaints against ISPs, OEMs, others flood NITDA

    The National Information Technology Development Agency (NITDA) said its office has been inundated with complaints from Ministries, Departments and Agencies (MDAs), other government establishments, the organised private sector (OPS) and individual consumers of information technology (IT) goods and services about the poor quality of services being rendered by Internet Service Providers (ISPs), Original Equipment Manufacturers (OEMs) and others.

    Other service providers that have been reported to the agency include electronic or e-commerce platforms, software vendors, IT enabled service providers such as financial technology service providers (FTSPs), payment terminal service providers (PTSPs), payment solutions service providers (PSSPs), Business Process Outsourcing Service Providers (BPOSPs) and other IT goods and service providers.

    Its Director General/CEO, Dr Isa Ali Ibrahim Pantami, lamented that an assessment carried out by the agency confirmed that such complaints were largely genuine, adding that while NITDA is working with critical stakeholders to ensure an excellent working environment for both indigenous and foreign IT goods and service providers, the agency is also making efforts to ensure that Nigerians are satisfied with IT goods and services consumed.

    He said the agency would do all it could to enforce the rights of consumers who are being underserved by the substandard services they receive from such providers.

    He said: “The poor quality of some IT goods and services is adversely affecting the economy. Some businesses have had to pack up as the value derived from IT was not commensurate with IT investments. Additionally, some MDAs have been repeating expenses on IT goods and services in every budget year because of the poor quality of earlier purchased software and hardware. This has constituted an unsustainable drain on the nation’s resources.

    “We are, therefore, calling on both indigenous and foreign IT goods and service providers to pay attention to quality and customer satisfaction. Terms of licence acquisition, Service Level Agreements (SLAs) and contracts with clients and customers must be strictly adhered to. The Agency is setting mechanism in place to monitor compliance and would facilitate the blacklisting perennial defaulters, prosecute them and ensure remedy for consumers.”

    NITDA is an agency under the Federal Ministry of Communications created to implement the Nigerian Information Technology Policy and co-ordinate general IT development and regulation in the country.

    Specifically, Section 6(a & c) of the Act mandates NITDA to create a framework for the planning, research, development, standardisation, application, coordination, monitoring, evaluation and regulation of Information Technology practices, activities and systems in Nigeria; and render advisory services in all information technology matters to the public and private sectors.