Eniolorunda: Nigeria Needs Seamless Digital Ecosystem Connectivity

The Chief Executive Officer of TeamApt, a fintech startup, Tosin Eniolorunda, spoke with Emma Okonji on how the company is positioning to seamlessly connect banks, people, businesses and governments across Africa. Excerpts:

Leaving a promising career in a firm like Interswitch to chart an entrepreneurial course may be an impossible mission for many. What motivated you and your partners to start TeamApt? Entrepreneurs are usually restless people. They are not usually after money but they thirst greatly on making an impact. They know the money will follow. I needed to make an impact in my life and it was becoming harder to do so with my employer so I left. I figured that the worst that would happen will be that I would fail, and I could always get another job even with the startup on my resume. I, however, knew I was not going to fail. I had planned to do this all my life and I knew it was time. I was 29 years old then. While in school, I had acquired entrepreneurial experience while studying Mechanical Engineering at Obafemi Awolowo University. I had a consultancy business for students, while helping them with various hardware and software projects. I was single and I knew it would only get harder if I didn’t do it then. It was then or never. So I had to leave Interswitch in just under three years after. I could not have made a better decision.

The desire of most startups is to woo potential investors. Why has your organisation taken a different approach to grow your business, particularly at this early stage? We are fundamentalists at TeamApt. The purpose of a business is to create wealth. Wealth is profit. Sometimes startups hype promises of profit making to investors in order to receive higher valuations. Hype is not value. Profit is value. Profit with hype is, however, greater value. In the B2B industry that we play, customers are expected to pay for value. We figured if we recycle their payments and do this quickly, we could reach the scale quickly without external funding. This is what we believed will help us build the muscle we require for a sustainable growth. The second reason is that it takes time and effort to raise significant institutional capital. We did not have that time. We would rather spend that time with our customers and understand their needs deeply. Our clients have rewarded us with millions of dollars of revenue in 26 months without raising a dime from investors.

For most startups, penetrating the market is usually a daunting task. How well have you fared in two years of existence. What are your milestones, and what should the market expects from you in 2018? Any company that is thoroughly focused on customer success has a high chance of succeeding. Our experience has helped us to see the needs and this allows us to envision a better future where banks, businesses, people and governments can be connected in a seamless end to end digital financial ecosystem to improve efficiency for the banks, reduce financial friction for the businesses and increase financial inclusion for the people.

So far we have reached a milestone of providing digital web and mobile banking for 16 banks and about 50,000 businesses. Our banks are delighting their retail and corporate customers with our solutions. Banks have approached us when they heard of the exploits we have done for other banks. The banking industry should expect more of this in 2018. We are also providing solution to a serious financial problem that all businesses in Nigeria are facing. We are experiencing this challenges too while running our business. It is estimated that billions of naira are lost annually to this operational problem. Presently, we are building a solution to address this while working with our partner banks. This year, we will consolidate our ecosystem of banks and include businesses in it for our mission of providing frictionless digital finance.

Fintech innovation requires a particular skill set but the skill gap in the fintech industry is quite alarming. Getting good programmers is a huge challenge. What do you think could be done to address this? This is a real challenge. Good programmers are few and there is a competition for them in and outside the country. The country’s brain drain is alarming as many experienced developers can get jobs outside the country. They can get jobs in Dubai, Ireland, and Estonia with far greater compensation compared to what they would get in the country. To foster innovation and develop the country, a lot of engineers will always be needed and I think it’s high time the industry and the nation banded together to solve this epidemic.

I think the challenge can be resolved fundamentally in two ways. The first is to increase the supply of good quality software engineers and to make the industry more lucrative for them. Supply of good programmers can be improved through internship programmes for secondary and university students to catch and mentor them while they are young. The second solution is slightly harder as it is tied to the macroeconomic performance of the nation. The naira devaluation, for instance, has led to increased emigration of experienced software engineers. The industry can, however, try and raise rates for the engineers.

What are the infrastructure and policies the industry stakeholders, regulators and government need to put in place for Lagos to become No 1 Africa’s hub for Fintech? With all the right conditions in place, I believe Lagos would not only be Africa’s No 1 Fintech hub but would be at par with other Fintech hubs around the world. Currently, the Fintech space is developing with a huge focus on Lagos and asides key factors such as talent, capital and consumer demands which are essential for the growth of any Fintech hub in the world, government policies can either stunt or accelerate the growth of a Fintech hub in Nigeria. If the government steps in and creates policies and procedures that protect and encourage Fintechs in Nigeria, there would be better promotion of innovation and foster healthier competition. Just like London and Singapore, which are two leading Fintech hubs in the world, their regulatory bodies Financial Conduct Authority, and the Monetary Authority of Singapore, have established certain initiatives to strengthen collaboration between Fintech hubs.

Initiatives, such as accelerator programmes, Fintech offices, international agreements, and sandbox environments, where both Fintech companies and other financial institutions can test their innovations without incurring heavy regulations, have accelerated the growth of Fintech in those countries. Asides these regulations, the government can also establish policy programmes that would support the development of Fintechs and other financial related startups in Nigeria. For example, StartUp India was established by the Indian government to provide mentorship opportunities, funding, simpler regulatory processes and many more benefits for startups in Indian. It wouldn’t be a bad idea if the Nigerian government take learning from these countries and establish similar initiatives in Nigeria to accelerate the growth of Fintechs and place Lagos on the map of Fintech hubs globally.

Europe and North America have embraced Open Banking system for different reasons and adopting different models. What is your view on Open Banking and how should Nigerian banking industry approach it? Open Banking is a welcome innovation in the global financial industry and there is going to be a noticeable shift of power from financial institutions especially banks to consumers. It has started already just as you mentioned in the UK and North America. The Australian government has started putting in place policies known as the consumer data rights which will give customers access to their banking data. I believe it wouldn’t take long before the Nigerian banking industry join the global community of Open Banking. We already have organisations in Nigeria such as Open Banking Nigeria that is developing free API Standards that would give customers the power to access and share data with the third parties.

Some people are of the views that the best direction for fintech might be to collaborate instead of competing, as new consumer-financial applications can be built on top of old banking infrastructure. How should fintech relate with banks? The truth is that banks and Fintechs are mutually dependent on each other in the financial industry. It doesn’t matter how great your technology processes are, if there is no demand, then it’s