How is the digital transformation helping Ecobank Nigeria achieve its target of reaching 40 million customers?
The banking industry is fundamentally changing. In recent years, we have seen a trend related to the disruptive role of fintech companies in the industry. Banks are also now putting more emphasis on financial inclusion. It is clear that the only way that banks can scale up their activities is by ensuring that they have the easiest access to the largest population possible, through means of communication that are simple and inexpensive enough to be made available to the masses. This is all riding on the back of a platform that is reliant and secure enough to make them comfortable in dealing with banks. Nigeria in particular has the largest population on the continent; therefore, we need to use our vision to direct our efforts in becoming a key player in this market. We must ensure we make easy financial services available to as many people as possible, hence the target that we set for ourselves. As a group that goal is to achieve 100 million customers within the next five years. In Nigeria, we would like to achieve 40 million. Banking today is not just about having an account. It is about having access to financial services by all means, particularly mobile. It is clear to us that mobile is going to be a driving force in that respect.
Is digitalization the bank's main focus today?
Yes, and we have made that clear. It is not just about digitizing our customers. It is also about digitizing ourselves. It is important that the way we interact with our customers and optimize our businesses internally are linked, and communication between external and internal parties is flawless. We are not only looking at our own internal processes in order to automate and digitize as much as we can, but we are also making sure that our customers, for whom we want to be sure have access to the digital services we are providing, also use all of our digital channels—mobile, internet banking, QR code payments, and POS. All of this is now made available to facilitate communication with our customers.
What is your view on the banking sector in Nigeria today?
The fact of the matter is, given the recession the country has gone through, as well as the issues around the situation of the country in 2016 and part of 2017, the portfolios of banks in general have been impacted. NPLs have increased since 2015. That obviously requires attention. The second point is, because of the various rates we see in the market, it is important that some level of convergence takes place at some point between the unofficial and the official markets. When that happens for the banks, some steep adjustments will be required. This is something that we, as an industry, have to be mindful of and prepared for. The third point is that there have new accounting regulations coming into play. International Financial Reporting Standard 9 is one of those and could potentially have an impact on a few banks. That said, the steps that are taken today by the Central Bank of Nigeria and other stakeholders are to ensure that there is no systemic impact in terms of challenges or issues on the country as a whole. For us, that is something we are looking at closely. Effectively, some banks are making huge profits, and we have to ask how these profits are made. Part of such profits are made from the volatility in the FX rates and high level of government borrowing. The sustainability of that needs to be questioned. When I take all of the one-offs out, I look at this from a normalized perspective, I believe some form of adjustments will definitely take place.
CBN Governor Emefiele told TBY that banks have a significant role to play in the recovery of the economy in Nigeria. What is your view on the statement, and what is Ecobank's contribution to the economy?
When an economy is in recession, it is important that all stakeholders play the right role in terms of supporting those who create wealth, produce, and make goods available to the population. We now need to ask ourselves how to achieve this. It has to be a concerted effort from policymakers, companies, banks and the Central Bank as well. We all have to come together. If any stakeholder does not have the right approach or solution, it distorts the market and causes asymmetry. Where there is asymmetry, there is always arbitrage opportunity. At Ecobank, we are doing a lot in terms of financial inclusion, which is the first step. Inflation is about the cost of living. Anything that can reduce that cost is an important element to consider. When we make access to financial services easier for the largest amount of the population at the lowest cost possible, it is a major contribution. Our role is to ensure that the price points of the services that we provide to our customers are as low as possible. This is where technology and digitization come into play.
What is your outlook for 2018?
If you had asked me the same question in 2016, I would have been less conclusive as the situation was blurry and we did not know what to expect. However, today we are recovering, inflation is going down, and reserves are rising. The country recently closed a large bond issue. It seems that macro indicators are now moving towards creating an environment that will support growth. The 2019 election is going to come with its own drivers when it comes to financing the economy. If investments are made to support population growth, it can only have a positive impact on the GDP. It is a function of consumption and investment. The environment has to be conducive for private as well as foreign investment to come in massively to support the much needed improvement in infrastucture. In 2017, we spent half of the year in recession and half of the year out of it. On an average basis, that is not great, but if the trend that has started continues, 2018 will be much better from a macroeconomic perspective. We are all optimistic.