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Tag: FinTech

  • PaySend, Access Bank deepen FinTech

    Card-to-card payments disrupter, PaySend, has partnered Access Bank Nigeria to deepen financial technology (FinTech) space in Africa.

    PaySend’s rapidly expanding business now operates in more than 60 countries and hopes to boost its presence across Africa.

    Its Chief Executive Officer (CEO), Ronald Millar, said: “We are delighted to be expanding into Nigeria and to be working with Access Bank. To have reached over 60 countries in such a short time is excellent and we look forward to a long and fruitful partnership.

    “Nigeria is one of our first African partners and we definitely see great potential in the region.”

    Access Bank, which has over 368 branches and service outlets across Nigeria, sub-Saharan Africa, the United Kingdom (UK) and Dubai, strives to deliver sustainable economic growth that is profitable, environmentally responsible and socially relevant.

    Also commenting on the partnership, Access Bank Executive Director, Victor Etuokwu, said: “Accessibility is important in our business and we see this partnership as vital to connecting our customers to their increasingly globalised network, whether they are business contacts, friends or family.”

     

     

  • FinTech: Banking hall transactions dip by 25%

    FinTech: Banking hall transactions dip by 25%

    Banking halls are getting less attractive to customers. Huge transactions now happen outside the banking halls, courtesy of rising influence of Financial Technology (FinTech) in taking financial services to customers, the Managing Director, Nigeria Interbank Settlement System (NIBSS), Adebisi Shonubi, has said.

    The NIBSS provides the infrastructure for automated processing, settlement of payments and fund transfer instructions between banks and card companies.

    Speaking at the Accion Microfinance Bank financial inclusion seminar held in Lagos at the weekend, the NIBSS boss said banks-branch transactions had dropped by 25 per cent in the last one year, as more customers embrace electronic payment, especially Unstructured Supplementary Service Data (USSD) technology platforms.

    Banking transactions are moving towards zero human interactions, saving cost and time for customers. The USSD is a Global System for Mobile (GSM) communication technology now deployed by banks to offer transfer services to their customers using Android phone.

    Digital financial technology, or FinTech, and particularly the global spread of mobile phones, has facilitated expanding access to financial services to hard-to-reach populations and small businesses at low cost and risk.

    Shonubi said so much had happened in the digital payment system with even microfinance banks now being admitted into it.

    “Microfinance banks now own their own Bank Verification Number -BVN machines and that shows the level of acceptance of technology in banking. NIBSS provides a platform that allows financial services to be provided to customers at reasonable cost. Over the last few years, the volume of digital financial has been growing, and we have brought down the cost by over 80 per cent,” he said.

    Shonubi spoke of deeper issues than technology. He said only 12 per cent of bank customers were using Point of Sale (POS) machines and they are knowledgeable people within the society. “There are certain things to take place for us to have more consumers change their behavior towards digital financial services. Education about the product is key and that promotes financial inclusion,” he said.

    ”We need to find ways of building scales. And the cost of setting up is very high. If you are a financial institution and 80 per cent of your capital is used to set up the business, that means you can only lend 20 per cent. Everybody is now targeting 30 million customers that are largely employed people.  I think there is need to target more people outside this group,” he said.

    Shonubi said more surprises awaited customers using the USSD device. “I think there is much that will happen in three years around smart phones. We need to use USSD technology to provide these services. There is already knowledge, but we need to build on that.”

    He explained that even with the banks, bank-branch transactions have dropped by about 25 per cent, internet banking transactions have dropped by 15 per cent while use of Apps has grown by about 10 per cent.

    “But where the real growth is seen is around the USSD that has grown by about 25 per cent year-on-year. Even with the knowledgeable people, they are finding it more convenient to use than going online. So, we need to start providing services that are appropriate. People are talking about knowing what to provide, but also using channels that are appropriate is important. And that is where the opportunities really lie,” he said.

    The USSD has helped bank customers facilitate low-value retail payments, grow e-payments by providing accessible electronic channels to a wider range of users and to further enhance financial inclusion. It has helped to extend e-payment benefits to payers and merchants at the bottom of the pyramid where usage of cash has been predominant.

    The USSD technology has become the most accessible channel for financial and non-financial transactions. Banks have a choice of allowing their respective customers to access this new service with their customised short codes.

    Shonubi said Nigeria has only 30 million accounts with verified BVN and that these customers have registered 75 million phone numbers against their names.

     

    bank customers to open and enroll on BVN. “So, what are we finding out is that 50 per cent of those customers already have BVN. That means they already have accounts in other banks. That means there must be something they are going to the microfinance banks for that they can’t find in other banks, and I think it is credit,” he said.

    He said the use of financial services by the larger population is still low, adding that out of 80 million bank accounts, only 30 million unique individuals can be identified with BVN.

    “When we ran the analysis, only 3.5 million people use POS machines out of 30 million bank customers. And over 60 million cards have been issued. Why are people not using channels that are already there? What we are doing now is gathering data and trying to make it available. This will enable us understand what the issues are,” he narrated.

     

  • 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.

  • FinTech firms competing with banks, says CIBN

    FinTech firms competing with banks, says CIBN

    The President, Chartered Institute of Bankers of Nigeria (CIBN), Olusegun Ajibola, has said Financial Technology (FinTech) firms are competing with banks and will remain part of the factors that define lenders’ future.

    Speaking at the 22nd World Conference of Banking Institutes (WCBI) in Lagos,  Ajibola, who spoke on the theme: ‘’Rethinking the future of Banking and Finance and Life Long Learning’’, said though the future of banking remains speculative, there are clear indications and a general consensus that a number of factors would continue to disrupt already established banking models.

    Some of the factors he said include increased competition from non-traditional competitors such as FinTech, more fragmented banking with incumbents losing more and more pieces as consumers build their own suite of products from a multitude of providers; increased specialisation to serve specific customer needs with speed and adequate value for money.

    He said: “Though banks would still remain the trusted advisors and there would still be need, albeit reduced significantly, for face-to-face interactions between bank customers and the banks, digital systems like Blockchain, Ripple, Ethereum will be common place and as technology is disrupting the nature of work at an unprecedented rate, there is the need for a new and inclusive approach to learning on the job.”

  • How FinTech is disrupting services, by CWG

    Having enjoyed centuries of monopoly, assured by the support of regulation, including through stringent requirements to new licensees, the erstwhile secured future of traditional banks is facing a heightened threat of disruption from financial technology companies (or FinTechs),  founder, Computer Warehouse  Group (CWG), Austin Okere, has said.

    According to him, the FinTechs are exploiting pent-up customer dissatisfaction and new technologies such as blockchain, coupled with the significant boost in smartphone adoption and pervasive broadband to disrupt the sector.

    In a presentation titled: Austin Okere’s Five Forces Model for Analysing the Future of Banking, he said the foundation of the Fintechs’ disruptive model lies in a peer-to-peer model for transactions, without any middleman or central authority in mind, a model that will possibly render the current establishment totally redundant and irrelevant.

    He said: “The biggest threat to the banks has been precisely their seeming success; centuries of relatively significant higher returns, even in the midst of economic downturns that adversely affect the real sectors, have 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.

    “There are indeed five forces that will define the new face of banking:  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 Nigeria 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 – the weight and force of their new found voice. Typically, they clamour for whatever will give them convenience and lower costs.

    According to him, customers are the most significant force, and represented by the outermost sector of the concentric circles. As 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 25million Kenyans transacted $28 billion 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).

    “If the customers however, maintain a strong appetite for traditional instruments of financial transactions such as notes and coins, cheques etc. 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,” he said.

    According to him, the essence of the model is to enable players equip themselves with the imperatives that will ensure that their business is continuously relevant in the sector. It helps to guide the formulation of their prediction based on whether there will indeed be a disruption; what the disrupted space will look like; the scale of disruption; and the pace of disruption

    He averred that a correct application of Austin’s Five Forces model will define the difference between whether players will continue to be in business, or whether your business model will become irrelevant and redundant.

    “Even though I developed the Austin’s five forces model, primarily to analyse the direction of the future of banking, the model can also be used to analyse any industry which is susceptible to disruption from the pervasive blockchain technology; including real estate; for instance, EY’s Australian operations piloted a real estate blockchain ecosystem that is now being used in the market to trade full, and even fractional ownership of properties. And also government, for example, Ukraine has partnered with global technology company, the Bitfury Group to put a sweeping range of government data on a blockchain platform. Dubai also has an ambitious blockchain strategy to issue all government documents on blockchain by 2020,” Okere said.

  • Three Ps of FinTech

    Three Ps of FinTech

    • The value of people, planet and profit

    Financial Technology (FinTech) has become the backbone of thriving economies, companies and individuals worldwide Nigeria is no exception. Many are deploying payment technologies in their operations for improved results. At the Vantage Forum, a yearly entrepreneurial advancement initiative of The Elevation Church, held in Lagos, an indigenous technology firm, SystemSpecs Limited, explained its role in the Treasury Single Account (TSA), promotion of entrepreneurship and speedy economic recovery. It also spoke of the value of the three Ps of FinTech – People, Planet and Profit. To other stakeholders, economic recession presents great business opportunities for investors, COLLINS NWEZE reports.

    When customers got the opportunity to view their account balances in various banks on one screen, including their total balances at the Vantage Forum, a yearly entrepreneurial advancement initiative of The Elevation Church, in Lagos, the experience ignited passion.

    This is one of the benefits that come with Financial Technology (FinTech), which is changing the face of businesses across all segments of the economy. In banking, it is the next biggest platform after customer service.

    That experience come with using Remita Mobile App, payment software deployed by SystemSpecs Limited, which has become the centre of electronic payment.

    “Remita Mobile App enables bank customers to centrally manage all their accounts and monitor how they send and receive money, all on one platform. It eliminates the burden of multiple apps in the management of bank accounts,” SystemSpecs chief, John Obaro, told the over 5,000 guests at the event.

    Vantage Forum focuses on empowering individuals to achieve the highest levels of distinction in their businesses and careers through the provision of resources, such as business seminars, workshops and mentorship programmes.

    Obaro, who also used the opportunity to announce SystemSpecs 25th anniversary holding this month, expressed passion for FinTech and entrepreneurship. He said it was difficult to separate technology from entrepreneurship and payment, adding that they work together to bring sustainable result.

    He claimed about 80 per cent of Small and Medium Enterprises (SMEs) in Nigeria fail within five years, adding that staying strong at 25 means the firm has some magic wands to share.

    He said Treasury Single Account (TSA), which was delayed for two years, only took effect after Remita was deployed to drive the scheme. The platform, he said,  pays no fewer  than two million employees monthly.

    Obaro, who spoke on the theme: ‘’New frontiers, new possibilities: Building an innovative and sustainable business in Nigeria,’’ said  the firm does its business in line with global best practices, keeping in mind the need to positively impact on the society.

    He said entrepreneurship thrives when businesses keep in mind the principles of people, planet and profit. “If you want to build a successful business, focus on hard work, dedication and diligence,” he said.

    Remita is also at the forefront of driving the national financial inclusion policy, and is used by about 500 micro-finance banks to meet the needs of many Nigerians who lack access to commercial banking, empowering them to extend financial services to the unbanked.

    Also, an Economist and Faculty Member, Lagos Business School, Doyin Salami, said the economic recession offers opportunities for investors to tap into.

    Salami said entrepreneurs, who would remain in business, despite the  challenges, would adopt three key strategies: improvement of   customers’knowledge, competitors’ and be persistent.

    He said such businesses should  overcome macro-economic challenges, such as inflation, which rose to over 18 per cent last December even as prices of basic commodities soared by over 50 per cent. He called for the full liberarisation of the foreign exchange market.

    “The solution is implementing fully the Monetary Policy Decision reached last year to liberalise the foreign exchange market. The guidelines were in place and the market started but because of the acute problems of the supply side, we have not implemented the framework as articulated,” he said.

    He said though there were concerns that fully allowing the naira to float might weaken it further. He added that the local currency could also appreciate. “I know people would be worried, should we allow it. But to what level do we allow the currency to depreciate? There’s nothing that says that it will not appreciate,” he said.

    Minister of Trade and Investment, Okechukwu Enelamah, said the government had left the planning stage and was diversifying the economy to insulate it from external shocks and increase investors’ confidence.

    Enelamah, represented by a director at the Bank of Industry (BoI), Toyin Adeniyi, said the ministry’s strategy was built on implementing Nigeria Industrial Revolution Plan (NIRP), providing support for Micro Small and Medium Enterprise (MSMEs) and support digitisation of the economy.

    “Short-term headwinds should not becloud the fundamentals of a strong market, as the government is seeking to partner private capital to diversify the economy,” Enalamah said.

    The minister said the government was tackling the poor macroeconomic performance of the economy, making it more inclusive, tackling its export dependent nature with diversification and increasing investors’ confidence to encourage foreign direct investments. He saidcrude oil price drop impacted negatively on the economy, but added that economic crisis brings about opportunities. He also said the economy is on the path of recovery.

    According to him, though there are challenges with poor power supply, access to credit and property rights, which have adversely affected the country’s Ease of Doing Business Index, these hitches are being adequately tackled.

    The minister said Nigeria’s population of over 180 million and abundant natural resources are great opportunities for investors to consider, adding that the diversifying the economy will make room for quicker recovery.

    LEAP Africa Founder, Ndidi Nwuneli, spoke on how to build sustainable businesses, quality customer services and engage key stakeholders in the business.

    “Your business value proposition has to be short, your business model easy, leverage on technology to save money and also engage your business community, which is key to your enterprise,” she said.

    On attracting investment to one’s business, the LEAP Africa chief said: “You have to convince investors that you will manage their funds well; you need to set up a board, because no one wants to invest in one-man business,” she advised rising entrepreneurs.

    Nwuneli said there are many Nigerians who are interested in investing in the country, but businesses have to be investment-ready to attract the right investments.

    He said: “How many of you have a properly-articulated vision, manage your businesses ethically, have a board, communicate your goals properly, have a governance structure, a regular audit and engage with your communities?”

     

    Remita Mobile App

    Obaro said the Remita Mobile App will change the face of collections and payments and collections  this year.

    According to him, the product helps users to send money and pay bills with ease from any bank accounts, including microfinance banks. “You can also pay anyone – business partners, family and friends. Also, you can effortlessly pay the Federal and state government agencies and settle other utility bills from the convenience of your mobile phone without visiting a bank. Manage standing orders in a breeze. Just easily set up instructions to start or stop recurring payments to friends, family,” he explained.

    The app, he added, enables users request payment in style from customers for services rendered, and asks for money from family and friends for various purposes, such as wedding and aso-ebi contributions.

    ”In this same app, you can be in charge of your expenses. All your expenses are displayed in easy-to-understand charts, flexible by period or category, enabling you to make more financially-intelligent decisions.

    “And if you’re also a corporate user or own your own business, you can authorise payments for bills from any organisation, SMEs, school or religious body that have been sent to you from the office on-the-go. This, in effect, means that in addition to all your personal accounts, you can also manage all your corporate and business accounts on a single device, your mobile phone,” he said.

     

    Building sustainable business practices

    On building enduring businesses, Obaro said: “A sustainable business is an enterprise that has minimal negative impact on the global or local environment, community, society, and economy. It strives to meet the triple bottom line: People, Planet, and Profit. Its people are competent and able to perform optimally for the advancement of humanity, while the business also enjoys large profitable margins. This kind of business positively affects the environment, business growth, and the society at large.

    “If you want to build a blossoming, innovative and sustainable business, focus on the roots.

    “Those roots include: vision, the right attitude, integrity, diligence, dedication, prayers, clear choice, sleepless nights, creativity, planning, fairness, commitment, sacrifice, failure, focus, delegation, hard work, perseverance, and team management – all of which are dependent on the God factor.”

    He said entrepreneurs need to be diligent. “Diligence is the ability to conscientiously pay proper attention to a task. It is deeply rooted in the ability to drill in, when others on the periphery. Of a truth: inconsistent efforts towards the  certain goals will end in futility. That is the power of diligence,’’ he said.

    “Perseverance is the ability to be persistent in doing something, despite difficulties or delays in achieving success. It stems from the desire to see a vision to fruition despite the demand of time, money, energy, and other valuable resources. It comes at a cost.

    “Integrity is ability to consistently act with honesty, doing the right thing even when no one is watching. Integrity has no version. It is either integrity or it is not.’’

     

  • World of mobile money in 2016

    World of mobile money in 2016

    Global firms and operators will be looking at the mobile money market in 2016. They will also keep an eye on developments in FinTech to drive and bring banking to the grassroots as canvassed by global money transfer companies and financial sector regulators, writes COLLINS NWEZE.

    Alix Murphy, Senior Mobile Analyst at Global Money Transfer app WorldRemit, believes that Mobile Money, FinTech and financial inclusion will drive global economies in 2016.

    For her, financial inclusion will mean big business, insisting that making serious money and reaching the unbanked have not always gone hand-in-hand. “We’re now witnessing a major shift in thinking as big name players in payments and other industries are talking openly about the huge opportunity in reaching unbanked customers – and not just as a corporate social responsibility gimmick,” she told The Nation.

    To buttress her point, Murphy says PayPal, Walmart and Coca Cola are just a few companies pursuing innovative financing for small businesses and products targeted towards underserved consumers, while a swathe of new payments start-ups have taken on financial inclusion as a goal.

    “What is more, digital payments are now being actively promoted by global policy-makers as critical to economic stability and financial inclusion for the world’s poorest,” she said.

    Murphy believes next year’s biggest fintech innovations will come from the developing world. “Forget about contactless payments apps and challenger banks: The real life-changing innovation is not happening in the developed world but in emerging market economies. FinTech heavyweights in areas like m-Insurance, microloans and Mobile Money,” she said.

    For her, a financial service for unbanked people using just a basic mobile phone – are transforming lives, businesses and whole economies across Africa, Asia and Latin America.

    She says mobile money in particular has become the foundation for a range of other innovative financial products like life and health insurance coverage paid for by topping up prepaid airtime, interest-bearing savings accounts for non-banked customers, instant personal and small-business micro-loans, and even investment bonds bought through a mobile phone.

    “The 2016 will bring wider acknowledgement among fintech companies in Europe and North America of the lessons and experience to be gleaned from their peers in the developing world,” she says.

    Murphy says mobile-to-mobile will be the benchmark for international money transfers. “In 2016, international remittances are expected to rise to over $600 billion, but most are still sent in cash informally or via risky high-street agents. As Mobile Money continues to gain popularity in the developing world, instant mobile-to-mobile transfers will become the global standard for sending money from person to person across distances,” she says.

    According to her, 2015 saw a series of ground-breaking partnerships between Africa’s largest telcos, banks and global money transfer apps like WorldRemit. This trend, she insisted, will continue through 2016 as consumer expectations settle on instant mobile-to-mobile transfers as the benchmark for international remittance.

     

    Remittances

    The World Bank Migration and Remittances Factbook 2016 showed that Nigerians living abroad sent home $20.8 billion in 2015. The figure, it said, is by far the largest volume of remittances to any country in Africa and the sixth largest in the world.

    “The United States is the biggest remittance sending country to Nigeria, followed by the United Kingdom. Nigerians received $5.7 billion in remittances sent from friends and family members in the US and $3.7 billion from the UK in 2015. Nigeria is also the third largest destination country for migrants from other African nations,” it said.

    It says a quarter of a billion people around the world are migrants, and over $600 billion in remittances are sent annually.

    The global lender says international remittances to developing countries reached over $441 billion in 2015, more than foreign direct investment and trice more than official aid flows.  It says 34 per cent of all international remittances are sent between developing countries.

    It disclosed that remittances constitute more than 10 per cent of Gross Domestic Product for 25 countries. It insists that international remittances have been growing steadily and remain stable even during episodes of financial volatility.

    “In 2015, the number of international migrants surpassed 250 million, a quarter of a billion people, globally. International migrants now represent more than 3.4 per cent of the world’s population. South-South migration is now larger than South-North migration. Over 38 per cent of international migrants have migrated from developing countries to other developing countries. 14.4 per cent of international migrants are refugees,” it said.

    Speaking on the development, Murphy,  says the World Bank’s latest report shows that countries have now hit two significant milestones – quarter of a billion migrants globally and $600 billion of remittances sent annually.

    “More than ever, we live in world of mobile and connected people whose financial ties extend across the planet. At WorldRemit we see the technological infrastructure evolving to meet these changing demands – in particular the convergence of mobile connectivity, instant messaging and international money transfers,” she said.

    She believes that despite being the biggest economy in Sub-Saharan Africa, Nigeria’s financial system is still deeply fragmented, making sending and receiving money very challenging for ordinary Nigerians. According to her, 56 per cent of Nigerians are unbanked, so offering a variety of pay-out options, including direct to bank account and instant cash pick-up, is extremely important for reaching everyone in society.

    “At WorldRemit, we process tens of thousands of international money transfers to Nigeria every month sent by Nigerians in the diaspora using our mobile app or online. It’s technology like this which is helping to bring down the costs of remittances and transform the lives of Nigerians everywhere,” she disclosed.

    The report also showed that technology is significantly driving down the cost of sending money internationally adding that the average global cost of sending remittances fell to 7.37 per cent, still far higher than global targets.

    “Sub-Saharan Africa is still the most expensive region to send money to at 9.53 per cent.  Online remittance products are the cheapest way to send money at 5.57 per cent. Account-to-account transfers via commercial banks remain the most expensive (11.1 per cent), followed by agent-based money transfer operators (6.2 per cent) and post offices (5.9 per cent),” it said.

    The World Bank also insisted that a combination of improved connectivity, low-cost Smartphone and increased competition have contributed to lower costs.

    Some of the benefits to the consumer include security, convenience, accessibility, speed and ease of transaction, competitive charges, access to quality advisory services, and integrity of transactions. Other not-so-obvious benefits, which are nonetheless important, are better cash flow management, enhanced financial planning, and inculcation of sustainable savings habit, which boost financial security and comfort in retirement.

    The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) are expected to boost the use of the mobile money and make the banking platform more acceptable to the citizenry.

    The regulators have taken further steps in enhancing financial inclusion by finalising a framework to extend deposit insurance cover to individual subscribers of the Mobile Money Operators (MMOs) in the form of deposit insurance.

    When approved, deposit insurance cover of up to N500,000 to mobile money by the corporation is expected to boost the use of the mobile money.

    The rollout of the regulatory framework for mobile money payment services in Nigeria are aimed at revolutionising the Nigerian payments system in tune with global developments as well as facilitating financial inclusion in the country. The development has led to the licensing of 24 MMO.

    “To engender confidence of the public in subscribing to the products of MMOs, the NDIC has considered as imperative the extension of the deposit insurance to the individual subscribers of MMOs in the form  of `pass-through deposit insurance,’’  Managing Director, NDIC Umaru Ibrahim said.

    According to him, the framework for making the pass-through insurance scheme operational is currently being finanlised by the corporation. He said the corporation had guaranteed the payment of deposits up to the maximum limit in accordance with its status.

    CBN Director, Payment Systems Unit, ‘Dipo Fatokun, said apex bank believes that mobile money and agent framework is the frontier of cashless boom.

    “Mobile money is the next thing expected to transform CBN’s cash-less policy. The apex bank believes that such initiative will aid both telecommunications and banking industries to further serve Nigerians better,” he said.

    Nigeria’s telecoms subscriber base, put at 131 million as of September, last yaer by the Nigerian Communications Commission (NCC), should play a major role in bringing the unbanked into the formal banking system.

    With over 50 per cent of Nigeria’s adult population unbanked, mobile banking could be the catalyst that will help quicken the adoption of banking services by this critical segment of the population.

    Offshore portfolio managers appear to be similarly persuaded and they are already positioning to take advantage of the expected growth in mobile money.

    For instance, Carlyle Group, a United States-based global alternative asset manager with $203 billion of assets under management across 129 funds and 141 fund of funds vehicles, recently acquired a $147 million (about N27 billion) minority stake in Diamond Bank, partly on the strength that the bank’s new mobile banking service “will help rapidly boost the lender’s customers and profits.”

    The CBN said it avoided the implementation of the telco-led model in the mobile money operation to have full control of monetary policy operations. The policy, it said, will also enable it minimise risks and ensure that the offering of financial services are driven by organisations it licensed.

    In new guidelines, the CBN said the telco-led model, where the lead initiator is Mobile Network Operator (MNO), shall not be operational in the country. The apex bank said the vision of achieving a nationally utilised and internationally recognised payments system necessitates strategies to bring informal payment transactions into the formal system.

    This framework has identified two models for the implementation of mobile money services namely: Bank-led financial institution(s) and/or its Consortium as lead initiator and non-Bank led-a corporate organisation duly licensed by the CBN as lead initiator.