Ecobank benefits from its pan-african platform
The bank present in the largest number of African countries is gaining strength from its new online payment platform that links its clients all over the continent
Togo-based Ecobank has stolen a march on its continental banking rivals with the launch of its Omni platform, which allows clients in 32 countries to use a single online platform to oversee their operations. Being able to make and receive payments, as well as manage a pan-african treasury, has proved challenging across Africa’s fragmented business environments. The need for these capabilities has been growing as foreign investors and African multinationals have expanded across the continent. “In essence, what we have created is an online banking portal that allows our clients to access all their bank accounts, perform real-time transactional reporting and allow them to make local and offshore payments,” says Patrick Gutmann, group head of transaction services at Ecobank.
Without doubt, the effort to implement a system on this scale has strengthened Ecobank. From the time the system was launched in mid-2013 to the end of last year, Ecobank recorded a 22% increase in customer acquisition, the number of electronic payment and cash management transactions increased nearly 200 times and the value of transactions increased sixfold. In April, Ecobank also announced that its profit for 2014 rose by 167% to $395m on the back of a costcutting campaign.
NEW LEADER DUE
Meanwhile, the bank’s chief executive, Albert Essien, is due to step down soon because he has reached the mandatory retirement age, and the bank is looking for a new leader to set out new growth targets for the bank. Bank executives are looking to move
beyond the management conflict that led to the ousting of chief executive Thierry Tanoh in March 2014. Tanoh and Ecobank are in court to resolve their disputes. Ecobank is leading a drive to attract more corporate clients. Omni allows corporate firms to create a central treasury function. “The client can integrate their operations directly with the bank. So they can link their enterprise resource planning systems with the bank and allow the bank to do the reporting for them,” adds Gutmann.
The system allows clients to marry the requirements of subsidiaries in individual countries with an overarching central treasury. “So you can have a finance director that has access to the bank account locally, with a chief financial officer sitting somewhere else that has control over all the accounts across the continent,” says Gutmann. The finance directors have permission to authorise payments in their host countries, while executives in the treasury department at head office can quickly execute cross-border transfers. To do this, Ecobank partnered with privately owned software company Fundtech, which is based in the US. Fundtech has worked with top banks across the globe, but getting a system compliant with the regulations of 32 states was not a simple task. The language requirements alone were tricky, as the system caters for French and English speakers, with Portuguese, too, to be added shortly. Ecobank had a few advantages for this project. “As a relatively young bank,” says Fundtech’s head of sales for Europe, the Middle East and Africa, Peter Reynolds, “they didn’t have a massive legacy of information technology [IT] infrastructure,
and they operated their entire banking system on one platform. This simplified IT environment was a great help.” Many banks that have attempted to build transcontinental franchises – whether in Africa or anywhere else – have had to do so through a combination of organic growth and acquisitions. Combining a whole lot of different IT systems through acquisitions often relies on a ‘patchwork’ system, where companies spend development resources getting different systems to talk to one another, as opposed to spending money on developing functionality. As Fundtech was building its system from scratch in each of the countries Ecobank operated in it did not have to spend an inordinate amount of time getting different systems to work together, as one of Ecobank’s largest competitors, South Africa’s Standard Bank, has had to do. Standard Bank is larger than Ecobank in terms of assets and operates in 20 African countries. The bank opened a representative office in Ethiopia earlier this year.
NOT FORGETTING CASH
But as advanced as the technology in the new platform is, the bank could not lose sight of the need to offer cash services. “Cash is still a means of payment in many of the countries we operate in. There are still certain client segments that deal only in cash,” says Gutmann. Through experience Ecobank realised that a generic cash management offering would not work for most companies. Gutmann concludes: “For us it was about us being able to grow our share of wallet with clients, so besides providing the capability of managing banking and treasury, it supports our lending activities and speaks to the mission of Ecobank as being a truly pan-african banking group.” In the absence of any monetary or fiscal union on the continent, integrated banking platforms can fill the gap by increasing the velocity of money and enabling greater intra-continental trade.
From Kigali to Cape Town in seconds: Ecobank’s Omni platform is simple to use