Zenith Bank’s Group Managing Director/CEO, Ebenezer Onyeagwu has emerged CEO of the Year. The honour was given to the bank chief at the Sustainability, Enterprise and Responsibility (SERAS) Awards at the weekend in Lagos.
According to the judges, Onyeagwu was selected for several reasons key among these practices were a robust Environmental and Social Management System for screening credit facilities and continued investment in social initiatives.
The measures taken by the bank, they said, support the United Nations Sustainable Development Goals (SDGs). Zenith Bank has also joined 131 other lenders from across the globe as a founding signatory to the United Nations Environment Programme Finance Initiative (UNEP FI) Principles for Responsible Banking.
The judges found Onyeagwu worthy for his commitment to the promotion of sustainability and responsible business practices in Nigeria, by his frontal leadership of sustainability in Zenith Bank, thereby enabling best industry practices in the banking sector, and for his passion to reduce carbon emissions in the bank’s operations.
Zenith Bank also emerged winner in two other categories at the awards, carting home the awards for “Best Company in Promotion of Good Health and Well-Being” and “Best Company in Promotion of Good Health and Well-Being”.
Of the five finalists for the Best Company in Promotion of Good Health and Well-Being Category, Zenith Bank emerged winner for donating N1 billion in support of efforts to address the COVID-19 pandemic in Nigeria, donation of N200 million towards Lagos State Government’s efforts to provide relief to the victims of the Abule-Ado pipeline explosion, and for spending over N300 million in 2019 to support various healthcare initiatives across the country.
Zenith Bank was adjudged winner in the category for the Best Company in Promotion of Gender Equality and Women Empowerment for its Z-Woman initiative which offers credit facilities to women-owned businesses at single-digit interest rate and for a gender-balanced workforce (about 49.80 per cent female and 50.20 per cent male).
Interswitch Group has partnered Kenya’s Credit Bank Plc to launch a multi-currency prepaid card. The card is aimed at providing consumers with an excellent alternative banking card that allows for safe, secure and seamless electronic transactions.
Country General Manager, Interswitch Kenya, Romana Rajput, stated that the partnership is a boost to Interswitch’s issuing business; adding that it is further proof of the company’s leadership position in the financial services industry on the continent.
“This is definitely a boost to Interswitch’s issuer-support and third-party processing business. We have been around for a while and we intend to keep entrenching digital payments in East Africa and across Africa as a whole. Now, customers will have access to the prepaid cards without necessarily having a bank account. The card can be funded through mobile money and it is widely accepted by merchants for payments and at the ATMs for withdrawals,” Rajput said.
Credit Bank Director, Jack Ngare, noted that the product is aimed at increasing financial freedom for the banked, unbanked and under-banked. “It is our aim to provide our customers with the control and confidence they need to manage their money smartly. Membership of the Visa network will allow the card holders to use it worldwide for payments and withdrawals, and to transact safely online and at ATMs,” Ngare said.
Access Bank’s ‘W’ Initiative in partnership with the Nigerian Governors Wives against Gender-Based Violence (NGWA-GBV), has organised a virtual webinar themed, ‘Tackling the menace of gender-based violence in our society’.
The event is in response to the rising cases of gender-based violence in Nigeria and across the world.
The webinar featured speakers such as the wife of Ekiti State governor, Erelu Bisi Fayemi; her Kwara State counterpart, Olufolake Abdulrazaq; founder, Cece Yara Foundation, Mrs. Bola Tinubu, and the founder, Women at Risk Foundation (WARIF), Kemi Dasilva-Ibru.
Despite the increased awareness and violence prevention programs in low-resource settings, social norms and beliefs still pose a major challenge to ending gender-based violence in the society.
In line with the vision of the ‘W’ Initiative to create a society where sexual and gender-based violence is eradicated, the conversation focused on the meaning and types of gender-based violence , contributing factors as well as how to respond, cope and ultimately put an end to the scourge.
On the rationale behind the bank’s drive against sexual and gender-based violence, the Group Head, ‘W’ Initiative at Access Bank , Ayona Trimnell said, “Violence against women is not just a Nigerian issue, just like the COVID-19, it has become a global pandemic. Gender-based violence affects the physical and mental health, dignity and overall well-being of the victims , yet it remains masked in a culture of silence. For this reason, we, at Access Bank, through the ‘W’ Initiative have taken it upon ourselves to address this menace publicly and on a national scale. We also encourage victims to speak out and seek help.”
The Minister of Youths & Sports Development, Sunday Dare, and First Bank of Nigeria Limited have advised youths on the need to generate creative business ideas that would attract funding for their entrepreneurship schemes.
Speaking at the National Company of the Year (NCOY) competition, Dare said youths with creative ideas have good chances of accessing the N75 billion Youth Development Fund being promoted by the Federal Government to support youth-owned businesses.
He said entrepreneurship has a critical role to play in solving Nigeria’s unemployment problems as the world is looking beyond qualifications and focusing on creative ideas.
In her goodwill message, Group Head, Marketing and Corporate Communications, First Bank of Nigeria, Mrs. Folake Ani-Mumuney, said the bank has been supporting the NCOY competition which is an extension of the Junior Achievement Nigeria (JAN) Company Programme designed to empower students on financial literacy, work readiness and entrepreneurship through experiential, hands-on programmes.
Ani-Mumuney said the 10th Anniversary of NCOY is a significant milestone. She also stated that NCOY brings together outstanding students and business teams across Nigeria to compete to represent Nigeria at the African Company of the year competition.
Continuing, Dare said the uptake of technology is very high among youths, adding that the programme was enriching and promising for the students to achieve their life ambitions and solve societal problems.
He said the technical skills the participants exhibited showed that Nigeria has a future for younger generations.
He said the idea of what a non-governmental organisation is changing, as they are now using technology and knowledge to solve societal problems.
At the end of the contest, the New Phase from Brookstone Secondary School, Port-Harcourt, Rivers state emerged winner producing an eco-friendly block. The second runner up was Jikoru from Alvana Secondary School, Owerri, Imo state designing a web platform that connects freelancers to jobs; while the first runner up was Amazing Amazons from Government Girls Secondary School, Abaji, Abuja came up with an innovative Health technology that connects hospitals to blood banks and to blood donors.
The latest slip of the economy into yet another recession has again thrown a challenge to the CBN and its leadership to explore ways and means to pull the economy out of the woods, reports Group Business Editor, SIMEON EBULU
For one unprepared for battle, the booming sound of artillery fire would be enough for one to beat a retreat and surrender to the enemy, but not so Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN). As the nation’s economy continues to wobble in and out of recession, faithful managers and incurable optimists like Emefiele, continues to hold on to the elements in the expectation that eventually something will give and bring this seemingly drifting ship to safe anchorage.
The Federal Government can be excused, or passed over this time around for the parlous state of the economy as the immediate cause of the current recession and economic downturn was imposed and never anticipated, certainly not in its magnitude and devastating negative impact. The announcement by the Nigerian Bureau of Statistics (NBS) in November that the economy is again in recession, though largely expected, was received with depressed awe, portraying a situation that was going from bad to worse. The NBS announced the regression of the economy last month based on data showing that the economy dipped by -3.62 per cent in real Gross Domestic Product (GDP) in the third quarter, thus officially falling into a second recession in five years. The last was in 2016 when the economy contracted by 1.62 per cent.
The decline in the GDP for Q3 2020, is not unconnected with low business activities both at the domestic and international levels that hugely affected the economy during the quarter as a result of several lockdown measures introduced to contain the COVID-19 pandemic all over the world. The outbreak of the coronavirus which emanated from China that turned a global pandemic, bruised the fortunes of the nation’s economy which was already on a growth trajectory. Emefiele alluded to this in his speech at the last annual dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in November.
“As we are all aware, prior to the onset of the virus in December 2019, the economy was on a positive growth trajectory, having made a significant recovery from the 2016-2017 recession, which was triggered by the drop-in commodity prices in 2016.
“Following the recession, we witnessed 12 consecutive quarters of economic expansion, and GDP growth in the fourth quarter of 2019 stood at 2.55 percent.
‘’Our exchange rate remained stable for over two years at N360/$ and our external reserve witnessed significant accretions from the sale of crude oil and continued inflows from foreign investors,” Emefiele stated.
However, all of that hope and expectation dipped with COVID-19, leaving the CBN with the daunted task of strategising once more to explore ways and means of pulling the economy of recession and anchoring it on yet another growth path.
Rising to the challenge
The Central Bank of Nigeria (CBN) and its leadership are well acquainted with the challenges bedevilling the nation’s economy. It’s Governor, Godwin Emefiele has, since assuming the leadership of the apex banking institution, been inundated with varied challenges bordering on the topsy-turvy movement in the economic space. These range from core monetary and interest rate issues to fiscal matters, some of which ordinarily should be handled by the fiscal authorities. However, notwithstanding the nature of the issues that pop up on the economic front, Emefiele and his team, have always risen to the challenge, proffering solutions to correct an otherwise unwanted, or unintended direction of the economy.
CBN Governor, Godwin Emefiele
The current recession is a case in point. At the last CIBN dinner, Emefiele referenced the challenges facing, in his words, “our nation, taking into account the impact of COVID-19 on the global economy,” saying in Nigeria, “we had to address the public health challenge, in addition to implementing a variety of policy measures aimed at reversing the unprecedented downturn in economic activities during the first half of the year.”
Economic downturn
The COVID-19 pandemic and the various lockdowns, are the main reasons Nigeria is in recession today. According to the CBN chief, the onset of the COVID-19 pandemic in the first half of 2020 and the lockdown measures put in place to contain the spread of the virus, caused an unprecedented shock to the global economy.
Global economic downturn, which was particularly significant in the second quarter of the year, saw declines in growth in advanced and emerging market countries. Like other economies, the Nigerian economy was not immune from the COVID-19 shock in 2020, Emefiele said, saying the GDP contracted by -3.4 percent. The negative rate of growth, he said was due to a series of external factors in addition to the lockdown measures, imposed in order to curtail the spread of the virus.
Oil price
Crude oil, Nigeria’s main forex earner was negatively impacted due to travel restrictions which directly hampered fuel consumption. Emefiele said restriction on global travel by land and air; along with the slowdown in commercial activities, led to a significant reduction in the demand for crude oil, which contributed to a 65 percent decline in crude oil prices between January and May 2020.
The drop in crude prices, along with OPEC reduction of Nigeria’s production quota, Emefiele pointed out, led to a significant decline in our foreign exchange earnings, along with more than 60 per cent decline in revenues due to the Federation Account. A motley of other issues, including the over one year continuous border closure, restrictions on movement and the disruption of the global supply chain, all combined in their respective ways to stall economic growth and inadvertently pushed the economy off course. GDP growth, particularly in the manufacturing sector was significantly impacted by the restrictions on movement as many factories and businesses operated at limited capacity.
This was in addition to a decline in demand for service-related activities, which require extensive in person contact, such as transportation, hospitality and tourism.
Exchange rate and Capital flows
The pandemic also impacted capital movement resulting in significant transfer, or withdrawals of over $100 billion worth of funds from emerging markets between February and April 2020. As an oil dependent country, the decline in crude oil earnings and the exit by foreign portfolio investors significantly affected the supply of foreign exchange into Nigeria, thus compelling the CBN to adjust for the decrease in supply of foreign exchange, resulting in naira depreciation from N305/$ to N360/$.
CBN interventions
To quickly reverse the negative economic trend, the CBN has taken some unprecedented measures to prevent any long-term damage to the growth prospects of the economy. It has assisted households and businesses that have been severely affected by the pandemic. This is in addition to targeted interventions in critical sectors such as agriculture, manufacturing, electricity and construction. Emefiele said CBN’s cumulative intervention efforts represent about 3.5 per cent of Nigeria’s GDP.
Other measures outlined by Emefiele to turn the tide, include, a cumulative reduction of the Monetary Policy Rate from 13.5 per cent to 11.5 per cent between May and September 2020 in order to spur lending to the economy. In addition, a one-year extension of the moratorium on principal repayments for CBN intervention facilities is also in place.
Also, regulatory Forbearance was granted to banks to restructure loans given to sectors that were severely affected by the pandemic and reduction of the interest rate on CBN intervention loans from nine to five per cent. To aggressively support households with consumption funds, the CBN created N150 billion Targeted Credit Facility (TCF), already adjusted by 100 per cent increase to N300 billion for affected households and Small and Medium Enterprises through the NIRSAL Microfinance Bank.
ABP and CACOVID
The Anchor Borrowers Program (ABP) continues to live up to its bidding with the sum of N164.91 billion already committed impacting nearly one million beneficiaries. The CBN’s mobilisation of key stakeholders through the Coalition Against COVID- 19 (CACOVID), resulting in the provision of over N32 billion in relief materials to affected households and the establishment of a N1 trillion facility in loans to boost local manufacturing and production across critical sectors, remains a landmark intervention that the apex bank jnitiated to pull the economy back on track.
Outcome of interventions
There are emerging indications that key indicators of the economy, on many fronts are shaping up and returning to positive growth. An assessment of economic activities in the third quarter showed that the economy witnessed positive growth in key sectors, amongst which are ICT, agriculture and construction.
The Agricultural sector continued to record positive growth supported by productivity gains in the sector, interventions by the government, and improved demand for local produce. Emefiele pointed to the Manufacturing Purchasing Managers Index, in November, which stood at 50.2 points, as an indication of expansion in manufacturing activities after six months of contraction, stating that a total of 18 sectors recorded positive growth in the third quarter relative to 13 sectors in the second quarter, which reflects significant improvement in economic activity.
He said in the I & E Window, close to $150million was being traded daily as a result of CBN’s measures to sanitise activities in the foreign exchange market, adding that the Nigerian Stock Exchange All Share index rose by 65 percent between April and November 2020, which is an indication of investor confidence on the fundamentals of publicly listed companies. Emefiele was excited that as a result of these measures, GDP growth in the third quarter, improved to -3.6 percent from -6.1 percent in quarter two, even though the economy fell back into a recession.
He, however, expressed optimism that Nigeria would emerge from the recession by the first quarter of next year, due to high frequency data that indicates continued improvements in the non-oil sector of our economy.
President Muhammadu Buhari has renewed the appointment of Mr Ahmed Kuru as the Managing Director of the Asset Management Corporation (AMCON) of Nigeria for another term of five years.
The President also re-nominated Mr Eberechukwu Uneze and Mr Aminu Ismail as Executive Directors of the corporation.
A statement by Senior Special Assistant to the President on Media and Publicity, Mallam Garba Shehu, said Buhari had already conveyed the decision to the Senate President, Dr Ahmad Lawan.
According to the President’s letter to the National Assembly, he was seeking Senate’s confirmation of the nominees by the Upper Chamber in accordance with Section 10(1) of the AMCON Act, 2010.
Similarly, in another letter to the President of the Senate in compliance with Sections 5(4) and 8(3) of the Nigeria Deposit Insurance Corporation (NDIC) Act, 2010, President Buhari has asked the Senate to confirm the nominations of Mr Bello Hassan as the Managing Director, and Mr Mustapha Muhammad Ibrahim as Executive Director of the corporation.
The two nominees are to succeed Mr Umaru Ibrahim and Prince Aghatise Erediuwa whose second terms end on December 8, 2020 as Managing Director and Executive Director (Operations) respectively.
Meanwhile, Hon. Omolola Abiola Edewor, is to continue as Executive Director (Corporate Services) in the NDIC until her second and final term ends on January 24, 2022.
The Chartered Institute of Bankers of Nigeria (CIBN) has urged the banks to strengthen their cybersecurity architecture to protect themselves against attacks by fraudsters
President/Chairman of Council of the institute, Bayo Olugbemi made the call at the CIBN’s Fellowship Investiture in Lagos at the weekend.
Olugbemi told over the 600 participants, who attended or connected to the event across the globe through Zoom and YouTube, that Nigeria has been bedevilled by various challenges this year ranging from drop in oil price, COVID-19 pandemic, the recent #EndSARS protests and the attendant pocket of unrests across the country to the recession. The pace of these disruptive forces and their attendant effects on the financial service system has been intense.
He maintained that the banking industry has remained resilient providing succour for businesses and millions of individuals across the country.
The CIBN conferred its honorary fellowship awards on 19 bankers in recognition of their contributions to the industry and the economy; 77 Associates as Fellows while 105 Senior Management Staff of banks and the academia became Honorary Senior Members of the institute at the event themed, ‘Financial services in a post-COVID-19 Environment: Strategic imperative’.
Others who were conferred with the same award were President, African Development Bank (AfDB), Adewunmi Adesina; Bank of Sierra Leone Governor, Professor Kelfala M. Kallon; the President, West African Bankers Association and President Liberia Bankers Association, Mr. John Davies III, among others.
He said that Banks will also continue to reinforce their Risk Management Framework in tandem with Government policies and urge the banks to consider conducting more market research on how customer needs might change in the Post COVID era. This would inform product development and process improvements
In other way round, Mr. Kunle Elebute, Senior Partner, KPMG Nigeria & Chairman, KPMG Africa, while speaking on the “New Realities in the Post-COVID World: Strategic Imperatives”, told bankers that Global CEOs are beginning to acknowledge that the new wave of technological advancement comes with risks that cannot be ignored.
The KPMG Boss said that the effects of COVID-19 will drive new ways of working, new performance metrics and new ways of connecting with and managing employees, well beyond the “work from home” dimension.
Board and executive management are also increasingly aware that while they might not be the expert in the subject of cyber risk, they will be held accountable if there is a cyber-attack that disrupts business performance, he said.
As a result of the pandemic and working in the remote environment, Elebute suggested that new productivity metrics need to be developed, but without being perceived as intrusive and maintaining a strong culture is as important as ever but much harder, he said
In his intervention, Mr. Ernest Ebi, former Deputy Governor, Central Bank of Nigeria and Chairman of the event who maintained that the banking industry must realize its locus in the economic recovery process, as banks and other financial institutions play significant role in shaping the recovery by supporting households and businesses to rebuild their financial security and business health.
To continue to fill the enormous credit gap and offer customers greater access to requisite financial services, Mr Ebi charged the bankers to look beyond the immediate threat of the pandemic and refocus on understanding their customers’ ‘new normal’ needs. Banks, therefore, need to adopt new operating models that support rapid and stronger recovery, as well as ensure efficiency and resilience to weather the storm.
“I am honoured like other honourees to be conferred with this fellowship, the responsibility is for us to conduct ourselves both in our personal and professional life (locally and globally) to these high standards, to be role models and mentors to other professionals in the banking industry and also to support the Institute in its broad activities in terms of building capacity of bankers and their professionalism”, Adesina, President, AfDB said.
Zenith Bank Plc has emerged as Bank of the Year in Nigeria in The Banker’s Bank of the Year Awards 2020. The bank has also won the Most Valuable Banking Brand in Nigeria and the Number One Bank in Nigeria by Tier-1 Capital, also by The Banker.
The award, which was announced yesterday by The Banker Magazine, Financial Times Group, United Kingdom during the virtual awards ceremony, was based on individual banks’ ability to deliver returns, gain strategic advantage and serve their markets.
Regarded as the industry standard for banking excellence, The Banker’s Bank of the Year awards is contested by the world’s leading financial institutions, with winners chosen across Africa, Asia-Pacific, Central & Eastern Europe, Latin America, the Middle East, North America and Western Europe.
Commenting on the award, the Group Managing Director/CEO of Zenith Bank Plc., Ebenezer Onyeagwu said : “It is a thing of joy for us in Zenith Bank to have been recognized by The Banker, Financial Times Group, as the Bank of the Year 2020 in Nigeria. I dedicate this award to our staff for their commitment, doggedness, creativity and very outstanding talents. It is in the talents of our staff that the Bank has continued to build dynamic competencies and capabilities that are driving our business for continued superior performance.”
He expressed gratitude to the Group Chairman, Jim Ovia, for the pioneering and foundational role he played in building the structures and laying the foundation for an enduring and very successful institution, the Board for the deep insights and outstanding leadership they provide, as well as the Bank’s teeming customers for their support which has enabled the Bank to prove to the market what it can deliver.
Zenith Bank has continued to distinguish itself in the Nigerian financial services industry through superior service offering, unique customer experience and sound financial indices. The bank has remained a clear leader in the digital space with several firsts in the deployment of innovative products, solutions and an assortment of alternative channels that ensure convenience, speed and safety of transactions.
As a testament to its resilience and market leadership, Zenith Bank announced an impressive result for the year ended December 31, 2019, with profit after tax (PAT) of N208.8 billion, achieving the feat as the first Nigerian Bank to cross the N200 billion mark.
In the recently released third quarter 2020 unaudited financial results, the bank recorded an improved result over the corresponding period in 2019, with gross earnings rising by four per cent to N509 billion and profit before tax (PBT) rising marginally by one per cent to N177 billion, an indication of the Group’s resilience given the challenging macro-economic environment due to the Coronavirus (COVID-19) pandemic.
Growing low-cost deposits is the delight of every financial institution. Such moves not only helps its lending plan, but boosts profitability. Access Bank Plc’s nine months unaudited results showed 24 per cent rise in deposits to N5.26 trillion in September 2020 from N4.26 trillion in December 2019. The bank not only leveraged on its investment in technology to grow deposits and serve customers better, but has continually digitised its operations to reduce cost to serve, writes COLLINS NWEZE.
Financial inclusion is one area that many banks pay much attention to. But successfully enrolling new customers from all cadres of the society will require huge investments in technology and quality customer services.
Although, Access Bank is well known for its customer-centric approach to service delivery, it further stepped up such services using numerous digital platforms, which allowed customers transact businesses from their point of comfort and in the convenience of their homes and offices. For the non tech-savvy customers, the Unstructured Supplementary Service Data (USSD) remains a most convenient and available platform for use.
Technology has also supported its quest for enhanced re-skilling of its greatest asset – employees – for the emerging demands and habits of its over 11million (Mobile App) customers during the COVID era and beyond.
All these have reflected positively on Access Bank’s unaudited results for the nine months ended September 30, 2020. The bank has not only grown its deposit base, but grew its low cost deposits- current accounts and savings accounts accounted for 62.4 per cent of the deposit base. Savings accounts deposits closed at N1.23 trillion as at September 2020.
The bank’s financial review of its unaudited results for the nine months ended September 30, 2020 showed that its gross earnings rose by 15 per cent to N592.8 billion in nine months ended September 30, 2020. The performance was an improvement compared with N513.7 billion recorded same period of 2019.
Also, interest and non-interest income contributing 63 per cent and 37 per cent respectively.
Interest Income declined by seven per cent year-on-year to N375.3 billion as against N405 billion in same period of last year, largely driven by the falling yield environment which saw income on investment securities drop by 15 per cent year-on-year to N118.8 billion.
Non-Interest Income increased by 100 per cent to N217.5 billion as against N108.6 billion achieved last year , largely led by the year-on-year growth in trading income.
“Transaction fees, Commissions and Other operating income accounted for 55 per cent and Net trading income the balance of 45 per cent. Included in other operating income are recoveries of N24.8 billion.
“We also had strong showing in our Channels and other E-business of N38.8 billion(+105 per cent year-on-year). These gains buttress the resilience of the bank even in these uncertain period,” the bank said.
Profit Before Tax (PBT) for the period rose by 16 per cent year-on-year to N116.6 billion as against N100.8 billion, and Profit After Tax (PAT) also grew by 16 per cent to N102.3 billion from N88.4 billion in 2019, on the back of a 29 per cent yy growth in operating income despite the rise in Impairment Charges and Operating Expenses.
Accordingly, Return on Average Equity (ROAE) stood at 21.2 per cent with a Return on Asset (ROAA) of 1.8 per cent in the period.
The assets base of the bank remained strong and resilient with Total Assets of N7.93 trillion in September 2020, a growth of 11 per cent year-to-date from N7.14 trillion in December 2019.
Net Loans and Advances totaled N3.53 trillion as at September 2020.
Customer Deposits increased by 24 per cent year-to-date to N5.26 trillion in September 2020 from N4.26 trillion in December 2019.
Capital Adequacy Ratio remained well above regulatory minimum at 20.3 per cent, reflecting the adjusted impact of the International Finance Corporation (IFRS) 9 implementation. Similarly, Liquidity ratio of 48.0 per cent.
Non-Performing loans ratio stood at 4.2 per cent as at September 2020 on the back of a N70.1 billion write-off and cautious restructuring in the period.
Net Interest Margin of 5.1 per cent in 2020 from 6.8 per cent in 2019, while Average Cost of Funds decreased 160 basis points to 3.6 per cent from 5.2 per cent in 9M 2019. Yield on Assets of 9.7 per cent, down by 336bps from 13 per cent in 2019. These are on the back of the declining yield environment.
Cost-to-Income Ratio declined by 176bps to 62.1 per cent in 2020, despite the high cost of operation of the enlarged business scale. ‘’We continue to drive our cost transformation initiatives to minimise cost, which will result in improved efficiency ratios’’, he said.
During a recent chat, the Deputy Group Managing Director, Roosevelt Ogbonna FCA, said these investments in technology have seen the bank recording continuous sign-on of new customers, thus making it the largest mobile banking network within Nigerian’s banking system, with 11 million customers using its mobile app. The bank is said to also leverage its’ agency banking platform, enabling customers transact businesses within their localities, rather than go far to do so.
Ogbonna also confirmed the bank’s growth through the COVID-19 situation with several of its innovations, helping to increase service delivery to the satisfaction of its customers, at this time of experiencing the ‘new normal’.
Quoting him, “As we go into the future, more customers will rely on the digital platforms and alternative channels for their banking transactions and business. Access Bank is well resourced with the infrastructure required to serve our customers and help them through the journey to arriving at a very profitable place,” Ogbonna said.
He continued that, Access Bank has long come to terms with the fact that change has come in the way things were done, in terms of having big offices and big branches. The world may never go back to the pre-COVID-19 way of doing things. He further expressed that, investments made by banks and other institutions in technology would begin to pay off as the world readies itself for the post-Coronavirus era. Although, branch network would remain relevant, about 70 to 80 per cent of transactions would be done via alternative channels, progressively.
“The new normal is here and it is a reality”, he said. “It is about banks and customers seeking out effective platforms that enable them perform their daily transactions without hindrances. As such, there is a channel for every customer depending on the level of security they require, skill and awareness on the adoption of technology”./ In his opinion, banks, especially Access Bank, is ready to provide alternative platforms for all customers to transact their daily business with ease.
Speaking further, Ogbonna confirmed that Access Bank has in the past shared with the market, every five years, its plans for expansion for the purpose of achieving its vision of becoming one of the dominant and most respected African financial institutions, as well as the continent’s gateway to the world. In doing so, the bank must remain relevant in the African market. Its current five-year plan is expected to run up to 2022. The plan entails making its presence and operations felt on the continent through involvement in viable markets.
In one of such involvements, Access Bank has operated in Zambia in the last 10 years, consolidating its franchise in the East African country. It has also acquired a bank operated in Kenya, with the thinking that in leveraging its global network, it should be able to add significant value to the market in that country.
Open Banking is rapidly redefining the contours of the global financial landscape, with Nigeria poised at the forefront of this transformation. Central to this paradigm shift is the Open Banking API – a system that enables banks and financial entities to securely share data through standardized Application Programming Interfaces (APIs). These conduits permit third-party developers to craft innovative financial applications, marrying technology and finance like never before. As Nigeria teeters on the brink of a financial renaissance, it’s crucial to understand the implications of Open Banking.
Open Banking API Standard
Open Banking API Standard facilitates a new era of banking where institutions openly share consumer financial data—always with user consent—via uniform digital pathways. By leveraging these standardized interfaces, third-party entities can craft innovative tools and services, expanding consumer choices and encouraging competition. With this standard in place, banking ecosystems can achieve better interoperability, reducing integration complexities and promoting a seamless user experience across various financial platforms and applications. Essentially, it paves the way for a more interconnected, innovative, and consumer-centric financial industry.
Understanding Open Banking API Standardization and Why Nigeria Needs Open Banking
API standardization in Open Banking can be likened to forging a universal financial lexicon. By adopting a standardized protocol, diverse financial systems can harmonize their operations, giving birth to cohesive and integrated financial solutions. The monumental impact of Open Banking is evident, more so for a country like Nigeria which is hungry for financial evolution. The reasons are manifold:
1. Financial Inclusion: Nigeria, with an unbanked adult population of 36.8% as per the World Bank, has a vast territory of untapped potential. Open Banking can bridge this gap. With access to financial data, fintechs can craft tailored solutions catering to this demographic, perhaps offering microloans or specialized savings plans based on individual spending patterns.
2. Fostering Innovation: A uniform API creates a fertile ground for innovation. When developers have a clear framework, they can more readily ideate groundbreaking solutions, ranging from advanced financial analytics tools to bespoke banking apps, meeting the diverse needs of Nigeria’s vast consumer base.
3. Cross-border Collaboration: Standardized APIs eliminate the digital ‘language barrier’, enabling Nigerian banks and fintechs to forge collaborations beyond borders. Imagine a seamless pan-African payment system or a West African financial service platform. The possibilities are boundless.
4. Propelling Economic Growth: An agile and adaptive financial ecosystem can supercharge economic expansion. As fintechs roll out streamlined payment processes, widen credit accessibility, and bolster savings mechanisms, the ripple effects will rejuvenate the broader Nigerian economy, spurring businesses, magnetizing investments, and generating employment.
Technical Challenges and Solutions for Open Banking in Nigeria
The pursuit of an impeccable Open Banking framework in Nigeria is not devoid of challenges. Yet, with every challenge comes an opportunity. Here, we dissect the technical impediments and illuminate the pathways to surmount them.
1. Data Security and Privacy: In a digital age marred by data breaches, the sanctity of financial data is paramount.
Solution: Adopt end-to-end encryption, stringent authentication systems, and fortified API gateways. Routine audits and proactive vulnerability assessments can fortify the defenses further.
2. API Standardization: A lack of uniform API standards can splinter the financial ecosystem.
Solution: The onus is on the Central Bank of Nigeria and key industry players to sculpt and mandate a cohesive API blueprint, ensuring fluid integrations and system-wide compatibility.
3. Infrastructure Reliability: Unpredictable power outages and inconsistent internet can stymie Open Banking services.
Solution: Banks and fintechs should double down on infrastructure – think backup power grids and diversified internet providers. Embracing cloud solutions can also amplify reliability and scalability.
4. Legacy Systems: Outmoded IT infrastructures in many banks can hamper seamless API integrations.
Solution: A fervent push towards digital modernization is the need of the hour. By partnering with technology stalwarts, banks can hasten this metamorphosis, embedding state-of-the-art technologies within their operations.
5. Regulatory Ambiguity: An absence of clear Open Banking directives can throttle its adoption.
Solution: A synergistic approach, enrolling regulators, banks, fintechs, and other stakeholders, can crystallize a robust regulatory framework, one that balances innovation and consumer safeguarding.
In summation, Nigeria’s journey towards Open Banking supremacy, while fraught with challenges, is rife with possibilities. A cohesive alliance between all stakeholders, underpinned by sagacious technological investments, can position Nigeria as a luminary in the global Open Banking narrative, crafting a future where finance and technology coalesce seamlessly.
Concluding Thoughts
Nigeria stands at the cusp of a financial revolution, and Open Banking is the flagbearer of this change. By harnessing global best practices and adapting them to local nuances, Nigeria has the potential to lead Africa’s financial tech resurgence. Collaboration across all sectors – from the government to FinTechs – is paramount for this vision to become reality With fintech momentum in Nigeria skyrocketing and fintech start up receiving staggering funding from venture capitalists across the globe– the national fervor to welcome Open Banking is undeniable. With thoughtful execution and stakeholder collaboration, Nigeria can emerge as a beacon of financial innovation in Africa, heralding a future where finance meets technology in harmony.
Gbadebo, shines prominently in the software development landscape, possessing a commendable range of distinguished FinTech contributions in Nigeria. Coupled with his vast knowledge, he also helms the esteemed tech initiative, TechLifta, serving as both its founder and partner.
