FinTechs are No Threats to Banks

This means that System Specs is like a party to recovery of loans?

Yes, and it is a very simple thing. If somebody earns maybe a hundred thousand naira monthly, we’ve seen the pattern, we have the data and we have his history over the last one year. Therefore, the bank can feel comfortable to lend maybe twenty thousand or thirty thousand to such a person, knowing fully well that the chances of default are very minimal.

Do you think that with this product, the interest rates paid by borrowers may increase because the bank will need to pay for the service you have rendered?

It is actually the reverse. It is going to reduce the interest rates. This is how it works, one of the reasons why interest rates are high is because the banks also have to make provisions for defaults. They are not able to give loans easily, in terms of the scope of people they give loans to, because they need to be sure. So today, a good portion of that is done manually. They have to monitor and go through a lot of paperwork before taking a risk, and of course they have to price that risk, so you won’t blame them if the rates are high. But working with partners like us, we have the data for these applicants, so it becomes easier for them to appraise each individual. The risk is better controlled. They can afford to offer lower rates because they know, with a higher degree of certainty, they will get back their money. It may not happen immediately, but that will be the direction because they can grow the volume and better manage the risk.

System Specs is one of the major partners of Lagos State government on Code Lag os, Educate Lag os, and Ready, Set, Work. How do these schemes benefit the participants in the long run?

The Ready, Set, Work is in its fourth year now, and it is a scheme we are happy to be involved in. We are preparing our youths for the real world after school. Many graduates have to go through a longer learning curve before they can settle either in the corporate world or become successful entrepreneurs, but with the Ready, Set, Work, they get to meet people in the industry. They get to benefit from experiences on the practical side of life. We have been involved from inception and we have had some of the products join us in SystemSpecs.

A few days ago, I signed a full employment letter for one of the beneficiaries that came in from attachment, then eventually did youth service here. We find them readier to kick off in the business than people who have not had that benefit of experience. For the Code Lagos, an ambitious game, again to create that awareness and get young startups and people to see the potential in understanding how to code. They are learning more current coding languages to use. So people who go through such programmes are more likely to be of immediate benefits to us than people who have gone through traditional institutions, knowledgeable but not quite current. That is why we are involved in those two programmes.

Recently, your organisation was in the news for building a Social Welfare Centre in A mi nu Kano Teaching Hospital and renovating classroom blocks for children in a special needs school, what informed these projects?

As part of our CSR, two of the major areas we look at is education and health. Incidentally, my father worked in Kano for a little over thirty-five years, so it was a good opportunity to go back to my roots. My dad was a nurse; today his first son is a Professor of Radiology in the UK and his last son is a Professor of Paediatrics is in the US. I didn’t study medicine but the project is the closest I can probably go in showing that I still identify with the medical field which was his own. We had an NGO in Kano that was able to bring this to fruition and we are very grateful for that opportunity and to the Kano State Government who also did quite some work. The Social Welfare Centre will cater for a number of people from the rural areas who have to come to Kano for treatments and need a stopover centre, a rehabilitation centre, a kind of halfway home, a structure and that is what we focused on.

Why did you decide to leave your flourishing career in the banking sector to setup SystemSpecs? I started my career in the 90s, for briefly six months I was supposed to be selling computers. I realised that I wouldn’t do well selling what I don’t know so I decided to leave to practice my craft which was software development. I joined UBA, I was there for about two and a half years, then I moved on to then International Merchant Bank, where I was for seven and a half years. Six months after I got there, I was appointed as the head of department. For those seven years, it was like I was doing essentially the same thing. I was being promoted almost every year or every other year. The money was good.

For a young man I had all the perks of office, the fully serviced duplex in Victoria Island, five minutes from work, you know, every young man would love that, but I didn’t see my future doing something repeatedly, so I took the plunge and left. At that point in time, banking was the only sector of the economy that had some level of computerisation and then of course the oil companies.

The other sectors of the economy especially the manufacturing industry which is stronger than they are today, lacked the efficiencies of computers. And we saw an opportunity there. We partnered with a company in the UK now known as Infor Systems, and supported their product called SunSystems in Nigeria for about twenty-five years. It was only about a year ago we ended the partnership because Remita had grown and required a lot more of our attention. So, we were with Infor for about twenty-five years, we benefited a lot from the relationship before we drafted our own home-grown solutions.

What were the initial challenge sat System Specs’ bud ding stage?

Starting is not always so easy. We had a number of young people that we trained, but they left in search of greener pastures. The greener pastures, ironically most of the times, were not local. Sometimes in a year you may lose like ten people to Canada, US, because these countries, especially Canada, have legalised entry for Computer Science graduates. So, when you have people from SystemSpecs, they apply, within a few months they go. It has been a challenge for the company. The nature of business that we do is something that will benefit government but doing business with government can also be very challenging especially if you choose not to be a conventional business man. In a society where agreements mean nothing, you take a higher level of risk working with governments. Then of course the usual problems of the society, though I won’t call them problems per se. Things like power, because in fairness; for power, you can always create your own solution.

How would you describe the journey so far and what would you say is System Specs biggest achievement till date?

The biggest achievement is that despite all the odds, by God’s grace we have been able to remain standing for 26 years. In those twenty-six years, we have seen a lot of bright IT companies come and go. The environment has not been very friendly, especially when we had the TSA distrust. Somebody stood up on the floor of the Senate with wild allegations that the company was making twenty-five million naira daily, and it became an issue. But come to think of it, if this country wants to develop we need to open up our minds to appreciate good numbers for good jobs. A few days ago, Apple was being celebrated in the US for making a trillion-dollar mark. In Nigeria, if you make a billion, there is a pulling down syndrome. We need to outgrow that and encourage people who are doing proper work to make good money. That is the only way you can encourage young people to also do good and not cut corners.

System Specs is said to be a fully indigenous company, what is the percentage of expatriates to Nigerians in the workforce?

There is something called zero per cent. No expatriate has ever worked with us. The closest we have had to what you may call expatriate is that we have had a number of Nigerians return from the Diaspora.

We have had a few come join us who understand and can see the vision of what we are trying to do but in terms of foreigners, we have not had the need to engage any. Remita and Human Manager were developed right in Obalende, the heart of Lagos, by Nigerians.

The Rem it a Corporate Champions Cup is in its fourth season, what values are you promoting by sponsoring the annual tournament?

It promotes two things, work-life balance and networking. It started from us as a group, we wanted to find a way for our staff to be able to relax and have some fun and we thought this will even be better if we share with our customers and then with the industry where we play. We were able to work with Media Vision to craft this Remita Corporate Champions Cup, which brings together the champions from different industries. It is a good time for our own staff, our customers and the industry generally to come together during weekends and have fun; and also meet with people who have made their mark in soccer. We have been able to work with legends like Peter Rufai all the while, just to encourage even the younger ones on what you can do.

What can you say about the future of FinTech in Nigeria?

There are many brilliant minds in the FinTech space. I just hope they can be allowed to blossom. CBN also has a role to play in that area in terms of regulations that protect the customer but at the same time allow for innovation. It is a very tricky balance and exercise so that you don’t shift to one extreme. If we can get that balance, I still believe that Nigeria may be the FinTech capital, not just of Africa, but even of the world. We have human intellect, we also have a market.

Do you think Nigeria’ s fin tech industry has what it takes to compete globally?

In terms of the competence, we have what it takes to compete globally. I read recently that a major bank in the UK is being celebrated because they have now been able to aggregate balances for their customers across multiple banks. Remita has been doing this for close to ten years, but we have not had the privilege to make that noise on a global scale.

What would have been a good opportunity is the TSA, which if we had the support of the government, would have been a good opportunity to showcase indigenous technology to the world.

There are a number of interesting things coming up. I meet a lot of other tech companies with brilliant ideas, these are not only pioneer solutions, but are solutions that if they are able to project it properly to the world, can be made to scale. Rather than condemning ourselves that nothing good can come out of Nigeria, we need that mental reorientation to celebrate our own successes and then the world will join us in celebrating.

The software industry in Nigeria is dominated by foreign companies, what do you think is responsible for this and what should be done?

I believe there is a lot to gain from these companies. Like I said earlier, we supported a foreign company’s product in Nigeria. However, we need to consciously give preference to Nigerian solutions, such that even when they are not as good as the foreign products but have the potential to be good, we adopt them. For instance, if a foreign product scores 90per cent in an evaluation and a local product scores 60per cent, we should rather give the local product and help that local product to scale, rather than always give preference, for whatever reason to foreign solutions.

Today, the central accounting package for the nation is a foreign product from a country, Estonia. It is a good product, but I honestly believe that if we encourage Nigerian companies, there is no reason why in the not too distant future, we can’t domicile the operation of such in Nigeria. SystemSpecs pioneered IPPIS, but somewhere along the line, some people said it should be given to a foreign firm when it was time to scale. Such self-defeatist attitude is a mental mindset we have to change because most of those foreign companies do not understand the Nigerian environment. They are not customised for operations and so they cost way beyond the software cost because most times the support and the revision costs can easily get out of hand.

In the next five years, where do you see SystemSpecs?

By God’s grace, we want to have entrenched more especially in the SME market. We want to have moved out to a number of African countries and certainly be more visible. Five years is such a long time but with the foundation that we have now, I believe that we are set to be a major player in the FinTech industry globally.

Obaro