Ohiwerei: Banks Collaborating with Fintechs to Boost Customer Satisfaction
Chief Executive Officer, Keystone Bank Limited, Mr. Obeahon Ohiwerei, speaks on digital revolution in the banking industry, Keystone Bank’s collaboration with financial technology firms, and various initiatives he has introduced into the bank since he too
How do you think the Nigerian banking industry would evolve over the next few years?
Over the next few years, I expect to see increased competition for customers’ confidence and share-of-mind. I expect to see banks compete more aggressively on such subtle yet potentially profitable indicators as increased account activity; customers’ ease of transaction across touch points; scale of digital spread and partnerships (as against number of physical branches); incentives for repeat business and greater customer life-time value; and overall business efficiency. I also expect to see banks increasingly leveraging data analytics to better-predict customer behaviour for effective marketing and retail loans creation. Finally, while the retail and MSME sectors should remain the main focus for banks, I expect to see this drive replicated strongly in the corporate banking space with unique offerings to tap their down lines and value-chains.
What is your view on artificial intelligence? Do you think such technologies will play a major role in Keystone’s operations during the coming years?
Artificial Intelligence (AI) strategy is already playing a critical role in driving Keystone’s operations via the adoption of Chatbot functionality, named Oxygen both on Facebook and Telegram. The AI technology allows us to improve customer experience by turning several transaction steps on internet Banking and the Mobile App to simple conversations in a chat environment, achieving huge time-saving and convenience for busy customers who are already frequent users of social media.
With Nigeria exiting economic recession, what should the government be focusing on? Do you think Keystone is well-positioned to capitalise on the recovery?
Despite fragile growth quarter-on-quarter and subsisting vulnerability to global shocks in commodity prices, I believe it is safe to say that the recession is past and barring any major socio-politic upheavals it is unlikely to recur, at least not to the scale witnessed in 2016 through 2017. Moreover, the federal government has taken active steps towards reinforcing growth and widening its revenue base, particularly from the standpoint of driving increased tax compliance and plugging any identified areas of income leakage. Other fiscal and structural factors that should strengthen economic growth include: The Presidential Enabling Business Environment Council (PEBEC) set up in July 2017, to remove bureaucratic constraints to doing business in Nigeria; increased diversification of the country’s economy through multiple intervention programmes in the non-oil sectors; accretion of external reserves on the back of increasing oil revenue; and steady moderation in inflation. As a bank we are well poised to capitalise on this recovery and on our assumption of office in the third quarter of 2017, my executive team and I embarked on an extensive restructuring process aimed at achieving greater operational efficiency, extensive process improvement and the re-alignment of skills and competencies to areas of best fit, both at senior and middle management levels. We have also remodelled our digital platforms for collections and payments, to provide increased convenience and value-addition to our customers’ lifestyles and business. So far the market response has been positive and our customer deposits have grown in excess of 40 per cent over the last three quarters.
Given the growth in the global regtech sector, to what extent is the bank utilising innovative technology in order to more effectively deal with regulatory challenges?
Yes, we are indeed leveraging technology to enhance regulatory compliance and our solutions cut across Fraud Management, Anti-Money Laundering (AML) Tracking, Customer KYC and due diligence. Essentially, they detect and deter non-compliant conduct as well as retroactively investigate and create audit trails as may be required. The bank has also invested in solutions that screen customers at the point of account opening against designated terrorist lists such as those of the Central Bank of Nigeria (CBN), US Office of Foreign Asset Control (OFAC), UK (HM Treasury/Bank of England), the EU and the UN. While these solutions also screen transactions and transfers against such lists, our other solutions monitor and report suspicious transactions and activities on customers’ accounts.
How has Keystone Bank been supporting SMEs in the country?
Globally, SMEs are established drivers of even the strongest economies and Nigeria cannot be an exception. With over 15 million SMEs dotting the Nigerian landscape, we are poised to ensure our customers in this segment actively grow their businesses through our partnerships and focused initiatives in the segment. We shall continue to partner with the government and other developmental agencies in making intervention funds available to the segment. Our SME proposition is the “Growbiz Account” with three variants that address their cycles of growth from infancy through maturity and stability. We are also empowering SMEs through our Agency Banking initiative by signing them up as agents for basic off-site cash-in/cash-out services.
Part of your retail-banking strategy appears to be focused on the country’s under-banked and unbanked populations. How do you think access to finance can be improved for the under-banked and unbanked in Nigeria and what specific measures are you taking to attract these groups?
Financial Institutions, Fintech companies, government and other developmental partners need to sustain the momentum by continually driving and funding research into relevant behavioural dynamics of the unbanked and under-banked segments; creating incentives for the unbanked to see value in being part of the formal sector; developing suitable savings propositions and appropriately-priced micro-loan products that realistically address their needs, and leveraging the extensive geographical spread of government agencies to co-locate and in the process bring financial services within reach of the populace.
How is the bank supporting SMEs?
Nigeria currently has about 96.4million adults (EFInA) and Keystone Bank is focused on driving an all-inclusive retail growth structure from the underbanked through High Net Worth Individuals. We are currently deploying a range of solutions to serve the unbanked population which include the deployment of ATMs to locations with little or no access to financial services; deployment of our Agency Banking solution under our direct plan called KeyServ Agency Banking and in partnership with the CBN and other federal government agencies, and co-locating with NIPOST (the Nigerian Postal Service) to reach both rural and semi-urban dwellers at minimal cost. Other are partnering with other strategic organisations to ensure our agent network is spread across Nigeria in the next 12 months, leveraging digital platforms for account opening and other financial services and our USSD Banking service *7111# re-launched recently, allowing customers to perform basic money transfers and airtime purchase among other things.
A major component of your corporatebanking business model seems to involve trade finance. Given that trade finance is among the most hotly anticipated businesses to be transformed by blockchain, do you envisage utilising this technology in the future for such a purpose—or indeed, for any other parts of your business?
Blockchain with its mechanism of distributed and secure validation, has the capacity to subject every party to a high degree of accountability, forestalling missed transactions, human or machine errors, or transactions occurring without the consent of relevant parties. Nevertheless, the peculiar demands of banking transactions require that we implement a measured approach to adoption. The Central Bank of Nigeria (CBN) has advised financial institutions in the country to stay action on the use of this technology for now and this prudential safeguard is not unconnected with the risks currently associated with it. We shall follow the lead of the CBN regarding integration into our operations.
We learnt the bank was in the process of launching a new digital financial-services platform. What are some of the platform’s key features that differentiate it from this what the customers currently have?
The proliferation of digital banking in the retail space has made branchless banking a strategic and compelling proposition especially in the retail value-chain. Keystone Mobile Banking App has introduced a new level of Banking with exciting offerings and features most of which were hitherto non-existent across the entire banking industry. These include: Zero-Data Banking – which allows customers to transact using our mobile app even without data on their phones; Chat Banking service – which allows customers to transact while they chat via Telegram and Facebook; the “Meet Account Officer” feature – which introduces customers to their assigned account officers and allows them to interact directly on the platform, and Foreign Currency (FCY) Transfers – where customers are able to make transfers to banks across the globe right from the mobile app. Others include Movie Tickets – which allows customers view available movies and book tickets; Standing Instructions – which allows scheduling of recurrent payments and transfers; Self-booking and liquidation of Fixed Deposits, and the Enabling and Disabling of cards - which can be a useful safeguard in the event that a customer loses any of our electronic cards. Our new USSD code also allows customers to transact from just about any type of mobile phone, offering such exciting features as bills payment, airtime top up, account opening, account reactivation.
As part of the bank’s digital strategy, how much of your existing IT infrastructure do