72 FI­NANCE

The Africa Report - - CONTENTS - War­ren Dick in Jo­han­nes­burg

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.

TIERED SYS­TEM

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

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