Abioye: Financial Institutions Should Adopt Local Software


The Chief Executive Officer of FinTrak, a global financial technology company, Mr. Bimbo Abioye, spoke to journalists on the need for Nigerian financial institutions to adopt homegrown software solutions. Emma Okonji presents the excerpts:

As an indigenous financial software development firm, what motivated you into financial software business?

We were motivated by some factors. We started the business over a decade ago as a consulting firm, majoring in finance and technology consulting. As we evolved, the technology business grew beyond financial advisory, so we incorporated FinTrakSoftware Co. Limited to take over the technology consulting business in July 2013. We did this for two reasons: one is to establish a company that is very well known in the areas of software development and delivery services and also to harmonise the brand with the name for effective business communication and better corporate visibility.

You are well known in the Nigerian software and financial space, what about the regional space?

We have actually developed solutions that have been proven in the Nigerian market and they have been deployed in many financial institutions and some non-financial institutions. Presently, we have about 13 commercial banks, seven mortgage banks, five insurance firms and manufacturing firms using our software. Our solution offering comprises core banking software for commercial and non-commercial banking entities, underwriting systems for insurance companies and enterprise business process applications suitable for virtually any organisation, private and public. Also, the suite includes: enterprise reporting and business intelligence platform to drive strategic insight and enterprise decision support. There is also enterprise budget planning processing and control platform to drive strategic and operational planning processes and evaluation of results in comparison to planned corporate goals. FinTrak Software applications will radically transform business processes globally in a few years to come.

We have built indelible track records especially in the Nigerian financial services. We intend to expand this to other public and private sector organisationsin Africa and globally. We observed that most organisations in African countries invest much in software and yet do not get the commensurate value due to disconnect between technology and their business dynamics and processes. Our goal is to offer platforms that connect with their businesses. We currently have technology implementations in Nigeria, Ghana, Congo, Gambia, Rwanda, Zambia, Kenya and Sierra Leone and some other African countries.

When you say you are in these countries do you have a physical presence or franchise?

In terms of physical presence, we are in Ghana, Gambia and Kenya. In Congo DRC, we have a business partner. We intend to expand further both locally and internationally leveraging on business partnership.

Despite your track records, most organisationsin Nigeria still prefer foreign software to local software. What could be responsible for this?

It has been challenging over the years, but now, we are making considerable progress. When we started, no serious organisations wanted to touch local software especially banks and other financial institutions. Some had ‘unwritten laws’ prohibiting local software patronage. When you introduce local software to them, you would meet a mind-wall. But today, our solutions are being used in some of those organisations.

We accomplished that feat by consistently delivering quality products and services to organisations that are receptive to local options while those that are fixated on foreign options have suffered many failed implementations and poor local supports. This has positioned our products and services above foreign options.

A good case study was the adoption of International Financial Reporting Standards (IFRS) in Nigeria in 2012. Some financial institutions who believed that technologies for implementation of IFRS being a global standard could only be sourced from foreign countries, bought foreign solutions to solve the problem – In short, a lot of banks, insurance companies and other financial institutions in Nigeria bought these solutions and it was mass failure for them. It was gathered that over N3 billion was lost on failed implementation of IFRS solutions in the industry. One of the banks believed in us and it became the only bank that reported its financial statement on IFRS for 2012 electronically. Since then, we have re-implemented IFRS for many of these banks and other financial institutions.

What is the level of compliance with the migration to IFRS 9 on or before the January 2018 deadline?

Changes brought about by IFRS 9, affects mostly financial services industry players. We see a lackluster effort arising obviously from the challenges that financial services industry players, their auditors and regulatory bodies encountered during the implementation of the IAS 39 based financial reporting standards as mentioned earlier. Most stakeholders are adopting hyper cautious approach. The Central Bank of Nigeria (CBN) seems to be unwilling to wield the big sticks to avoid a repeat of hyper pressure that led the banks into making erroneous choices of technical implementation of IFRS based reporting under IAS39. The auditors/IFRS consultants are afraid of advising their financial services clienteles to adopt IFRS software to avoid reputational backlash they suffered recommending foreign IFRS tools that failed woefully.

There is no viable alternative to automation of IFRS 9 considering its complexities and linkage with risk management.

What would be the implication if any of the financial institutions in the country is not able to meet the deadline?

Once you sign up to IFRS, there is no stopping, no parking and no loitering. You just have to keep moving. That means January 2018 is sacrosanct. One way or the other, organisations will comply, but how they will comply is a different ball game. It could be through manual methods using spreadsheets and those currently using FinTrak IFRS solution are able to leverage on FinTrak IFRS 9 Upgrade to achieve their objectives in terms of technology implementation. It is practically impossible to achieve full fledged IFRS 9 implementation using manual methods. Somehow everyone believes that they are doing IFRS, but very few organisations are actually doing true IFRS based financial reporting especially those using spread sheets.

How are you able to achieve competitive pricing?

This has been a serious challenge, but we are trying to correct this erroneous impression that solutions developed locally are inferior to the foreign option and as such, should attract low pricing. A typical Nigerian firm could be ready to pay about N250 million or more for foreign software that might not solve the required needs of their organisation, but for a local option, they would want to pay about N25 million or less even though, this better meets their needs. We are doing everything to change this unfortunate situation as it can potentially impact on our capability to invest adequately in research and development (R&D), recruit adequate personnel to sustain brand quality and deepen market penetration globally.

What level of security implementations have you carried out on your products and services?

Talking about security, we have among us, information security expertise holding gold standard and ISO rated credentials in Information System security. Certifications like Certified Information System Security Professional (CISSP), Certified Information Systems Auditors (CISA) and Certified Information Security Manager (CISM). These body of experts well versed in systems vulnerabilities and countermeasures have designed and built in robust security implementations to make it difficult for any hacker to break in or cause disruption of service. We have built-in security by architecture and by design to provide multi-layered defence indepth in our solutions.

How about financing?

Software being an ‘intangible’ product (not physical), has been challenging getting banks to finance software development efforts. Bank of Industry (BoI), for example, does not see software development industry as an industry they could support; instead, they are busy pursuing tailors, fish sellers and brick makers. Though, through the Institute of Software Practitioners of Nigeria (ISPON), we are engaging BoI to fashion out ways of supporting the software industry, just like they currently support Nollywood. Currently, we are only able to source loans from some banks secured with our project receivables.

Do you have enough government support?

Past governments have been paying lip services to local software developments. There was a directive in 2006 during the Obasanjo/Atiku regime that all MDAs should patronise indigenous software and hardware services where they exist. Today, Buhari/Osinbajo administration is preaching ‘Buy Nigeria’ and recently, Acting President Osinbajoreleased an Executive Order to ensure MDAs patronise locally available solutions. We are hoping that the current government will muster the needed political willpower to ensure that local software firms are given the opportunity to thrive. We are also in discussion with all relevant government agencies such as NITDA, NOTAP, BPP and others.