Patrick Akinwuntan, Managing Director of Ecobank Nigeria, last week held a major engagement with the media since assuming office in the second half of 2018. In this interview with our reporter, Akinwuntan highlights prospects of the bank and also took a look at the Nigeria economy in 2019. Excerpt:
What is the identity and stand of Ecobank in the banking industry?
We were established from day one as a pan-African entity with shareholding from different countries. Within our first year of operation, we have established in five countries, namely Nigeria, Republic of Benin, Togo, Ghana and Cote d’Ivoire and that was in 1989 and so next year, we would be 30 years in business as a pan African entity.
Because of our vision across Africa, we started out from our day one model as a global financial institution. We are multilingual, we started from bilingual. We now operate in four languages – English, French, Spanish and Portuguese. We are present in 36 countries in Africa, four counties outside Africa – France, the UK, the UAE and China – essentially to provide a linkage to global trade and to facilitate financial transactions of our customers.
In Africa, within the 36 country network, we have full banking operations in 33 of the countries. The other three countries where we don’t have full banking operations are Ethiopia, Angola and South Africa where we have rep offices. When you look from Senegal, to Rwanda, to Kenya in the east to Cameroon to a bit south, down to Zimbabwe, you have Ecobank in every country.
From the west of Africa, east of Africa, north below the Maghreb, and south above South Africa, Ecobank is present in every country in that geographical space. It’s a unique footprint in order that we deliver the mandates of our shareholders which essentially is to provide world class financial services to every African and the economic development of Africa. And we’ve done this now for 29 years effectively. We’ve built a customer base in excess of 20 million as a group. We provide full banking services right from the wholesale business to the small and medium scale businesses and to individuals.
And in order to do this, we’ve built technology platforms that ensure that we are able to deliver our services in a convenient accessible fast, affordable and reliable manner for our customers and in a manner that is sustainable to provide returns for shareholders.
What should be the focus and outlook of the economy in 2019?
For us, as I have explained, we look at the fundamentals. We look at Nigeria, the population is there; you look at the demography of the population. Over 50% are less than 30 years old and that speaks of growth potentials. Though, it does have its challenges but in terms of economic activities, it demonstrates a huge viable market with growth potentials.
You look at the intellectual capacity within the economy. This is an aspirational economy; an economy where the average participant believes strongly that he or she can do better. And therefore for us, the focus in Nigeria should remain the fundamentals; on, infrastructure, power, rail, in order to harness the significant potential in the county.
Growth of the intellectual economy is important. I’ve commented about this and I’ll still reiterate it. Nigerians are a very resourceful people. Participation in services where you have to use your intellectual capacity leveraging on the Internet, leveraging on the digital access available globally, Nigeria should focus on becoming a top player globally.
It is not by accident that Facebook proprietor came to Nigeria. It is not by accident that the telcos have grown exponentially in Nigeria. It is not by accident that Internet and broadband growths are at a high pace in Nigeria. We need to focus. It is not by accident that our Nollywood products really dominate not just the continent, but also becoming globally accepted.
It is true we have oil but the oil should not be our base. We should focus on various areas where we have comparable advantage and go ahead to realise our potentials as a country.
Even in fashion, Nigeria sets the standard, such as the kit won by footballers at the World Cup. You find the willingness of people to pay for something created by Nigerians. In the area of art and culture, we are naturally a leader and we should exploit that significantly.
Kenya is exploring tourism, Ghana is exploring tourism, Togo has focused on being the relevant port for commerce within West Africa. We have so much potentials in Nigeria. So, Nigerians should begin to focus on discussing more of the opportunities that we have and really highlighting where we have comparable advantage and doing it to scale up.
If you pick any country that we referred to as doing well, what they have done is concentrate their energy on their area of advantage and make sure that everywhere in the world you refer to them, that is their own way of attracting foreign direct investment, creating employment and making sure that the future is bright within their country.
So, for us in Nigeria, the discourse should be around the fact that we have opportunities in these areas. Because we have a young demography, a demography that reflects youth, education and health and anything around basic food and basic nutrition are areas of growth. In various ways, there has been effort; the effort focused on agriculture, the ability to feed ourselves and reduce the amount of import in rice, amount of import in various drinks because not too long ago, bottle water had to be imported into Nigeria.
But there are a lot of Nigerian entrepreneurs today doing it locally now. So, we can scale up in any of these areas. And we should focus on our areas of comparative advantage and competitive advantage and use the scale of production to bring down inflation, bring down cost of doing business, bring interest rates down because in the long run, for the productive sector of the economy to be funded, the cost of being funded needs to be affordable. And given the ability of Nigerians to communicate, my own opinion is that we should focus on our areas of strength and keep discussing it till it becomes a global reference.
Few months ago, the CBN introduced guidelines for payment service banks (PSBs). Are banks not threatened that the PSBs that will see a lot of telcos compete in the same market that banks are trying to capture?
On the development of payment service banks, for us in Ecobank, we collaborate we fintech and other participants in the economy. It is true that it could be viewed as increased competition but competition in itself is not negative. It actually reduces the overall cost of participation because more capital is being put into the sector and the scalability of the sector is still there.
We have less than 60 percent of the population fully banked. If you actually talk of active financial participation, the percentage will be less that 30 percent. By the time you add the underbanked and the unbanked together, it would be close to 70 percent. So, the opportunity is there for more participation.
We have demonstrated in various countries: Ghana, Côte d’Ivoire, Togo, Liberia, Kenya, Uganda, Rwanda, Cameroon that we have the ability to collaborate well with telcos that have participated in this space. In Ghana, we partnered with MTN to even provide treasury bills, investment opportunities for individuals straight from the mobile phone. At the end of the day, participants need a strong bank as the final repository.
We look forward to collaborating with participants in this space. We have the ability to work on our own, but also understand the value of collaborations and we’ll embrace collaborations in the evolving market space that we are looking forward to in Nigeria.
I think it’s a bold step by the Central Bank. It’s a commitment to bringing financial services to every household and because that aligns with our commitment at Ecobank, we will participate positively in furthering that agenda.
Globally, the banking industry is changing as technology continues to disrupt the space. How do you see Nigerian banks faring in this fast changing operating environment?
Famously, I think it’s now well known that banking is not where you go but what you do. In the past, when you say I want to do any banking service, it was synonymous to traveling to one location to do banking. But now, banking has come to your finger tips and we believe that increasingly, banking itself would become more affordable, more available; but the differentiator would increasingly be the effectiveness of the customer service that the bank brings to bear in adding value to the financial transactions being carried out by customers.
First, the definition of who is your customer is being expanded from the person that has an account in your bank to the person that uses your financial services platforms. So, if you look at ATMs, they are interoperable. If you have an account in X bank, and you come to use Ecobank ATM, you are also my customer because you’re using my service; and if you are happy with the service on my Ecobank ATM, not minding which other bank you brought your ATM from, it reflects positively in your confidence in the Ecobank brand.
Therefore, the concept of who is your customer is being expanded significantly. And that’s why the steps taken by NIBSS, the Central Bank in the establishment of BVN, is really forward thinking and should be supported by every Nigerian. What that does is create an identity that enables banks really relate to customers in a non-restrictive manner because you know this is a participant in the economy and you provide the services.
Therefore, customers would have more choices. The ease of access has improved. The transparency requirements are high because people can compare. And therefore, it creates growth. You will find the level of instant payments today.
When I started my career in banking, if you want to make a payment from Lagos to somebody in Kano, you write a cheque and the person in Kano takes it to the bank in Kano. It takes 21 days to get value. But today, it’s at the speed of seconds to do your transactions.
So, banking is one of the industries that have leveraged the developments in technology to leapfrog the challenges of infrastructure in Nigeria and make services affordable at a more reliable level to every individual.
It is a highly dynamic industry. It is an exciting industry for young people to bring to bear innovation and that’s why for us at Ecobank, we embrace innovation and we want to always be in the vanguard to do things better such that more people get better value for their activities.