Accelerating Digital Transformation

Ademola Adebise

Oluchi Chibuzor

The banking industry is in a digital race. For many retail banks, online and mobile channels have become as important—if not more important—than branches and ATMs.

According to a report by one of the leading global professional services firms, Deloitte, banks around the world are already realising how investments in digital technologies could benefit customer acquisition and satisfaction.

The report highlighted Bank of America which currently receives more deposits from its mobile channel than it does from its branches. The bank’s CEO Brian Moynihan had stated that investing in digital banking capabilities has helped improve customer satisfaction.3
Just like the Bank of America, in Nigeria, more commercial banks have seen increased transactions from their alternative banking channels in recent times. One of such banks is Wema Bank Plc.

With ALAT, Wema Bank has offered Nigerians everywhere in the world a bank that is designed to meet their needs. With this platform, the bank has recorded a significant increase in deposits even as it continues to strive to be among the leading banks in the country.

The digital bank is expected to disrupt the banking landscape and is driven by three pillars – convenience, simplicity and reliability.
ALAT is a platform targeted at youths, which the bank believes would increase its earnings by $200 million by year 2020.

ALAT has led to a drastic reduction in the bank’s operating cost to the barest minimum and has continued to give customers the best deals on savings. Clearly, the cost of running banks in Nigeria is higher than what is obtainable in most countries considering that most banks have to generate power, among other expenses. To this end, banks have come up with various products to encourage digital banking.

To the Managing Director/Chief Executive Officer, Wema Bank Plc, Mr. Ademola Adebise, every bank needs to be innovative to remain competitive.
Adebise said the vision of his team is to get ALAT to become the premier digital platform in Nigeria. This, according to him, would be driven by the bank’s expertise in the digital space and our retail partnerships.

“Basically what you see is that everything in the banking industry is commoditised, talking about products. You will notice that product A which is in one bank, is also in another bank. For us, we want to be an idea bank. We want to be known for innovation and we want to be very agile. For you to make a mark in this space, you need to be very agile and speak to market with products that appeal to customers.

“It is not about developing products, it is about appealing to the needs of the customers, which for us is very key. We are going to leverage technology as much as possible. Of course, our ALAT, the fully digital bank that we launched two years ago, it is doing very well and what we are doing now is that we are reviewing ALAT to take it to the next level.

“That is, to take it to a platform where we would be appealing to lifestyles. We have a lot of value creators and value consumers, that is buyers and sellers, on the platform. The whole idea is basically to reduce the cost of doing business and improve out top-line. We have sectors that are clearly mapped out that we play in the retail space.

“Of course, in the SMEs’ space we have different verticals that we can work with. We have the creative, the micro-businesses, the agriculture value chain, and other clearly mapped out products that we would use to appeal to these segments of the market. By the way, the bank was set up in 1945 as a retail bank. We have not moved away from that vision; it is just that things have been evolving,” he explained.

Also, the Chairman of bank, Babatunde Kasali, recently assured stakeholders and customers that the financial institution would continue to leverage on opportunities for accelerated growth especially around the sectors and industries such as agriculture and manufacturing.
He said this at the bank’s recent Annual General Meeting held in Lagos.

According to Kasali, internally, the bank took significant steps in 2018 to ensure that in 2019 it delivers value for shareholders, “and we are prepared to achieve this.”

“Another of our core commitment in 2019 is to continue to use our technology edge to drive disruption to deliver on our goals for the year.
“Wema Bank is well positioned to ride the growth curve and deliver even better performance in 2019. “As a bank, we look forward to 2019 with great confidence as we begin to realise the Wema dream of giving all who interact with us a delightful and memorable service experience,” he added. He said consistently the bank’s aim has always been to scale up and improve market share through various initiatives, saying that it was pleasing to know that in 2018, the bank made significant stride in that direction. “Since 2016, our business has largely focus on four major areas namely innovation and technology, providing excellent customer service, effective risk management and broadening our national footprints to achieve our targets.

“ALAT, Nigeria’s first free digital bank, was borne of this renewed focus and in 2018, the bank continues to record significant growth especially around customer acquisition,” he added.

Continuing, the bank chairman said: “As we effectively refocus and strategise to drive the bank in 2019, there are certain key factors that might negatively impact the domestic and international economies. These factors include the following: continuing trade tensions between developed and developing economies like the United States and China; the manner of the United Kingdom’s exit (Brexit) from the European Union will also be a significant drag on global economic growth.”

In addition, he noted the slowdown in global economic growth that had been impacting commodities trading.

Wema Bank’s audited financial results for the full year ended 31 December, 2018, showed that the bank’s profit tax grew by 59 per cent to N4.8 billion, up from N3.01 billion the previous year. The results also showed that the Wema Bank Group recorded gross earnings of N71.53 billion, which was a 9.6 per cent increase over the 2017 figure. Its profit after tax also climbed to N3.33 billion in the year under review, up from N2.26 billion in 2017. The growth resulted from 8.59 per cent increase in interest income and a 13.95 per cent increase in non-interest income.
The bank also recommended to its shareholders a dividend pay-out for the first time in 14 years as it has paid a dividend of three kobo per share in line with the board approved dividend policy.

In the year under review, the bank continued to improve on its deposit mobilisation while at the same time working down its cost of funds.
“ALAT (Nigeria’s first fully digital Bank) launched in May 2017 has improved the bank’s retail liabilities and customer base as the bank now onboards over 1,000 new customers daily on the digital platform and continues to grow its partnership profiles.

“The digital bank continued to receive several accolades in 2018, including the World Finance Awards for Most innovative Bank Africa and the Asian Banker Awards for Best Digital Bank Africa,” Wema Bank insisted.

Wema Bank recorded other notable achievements during the year. These included its successful tier-2 capital raising of N17 billion, even as it retained its Investment grade ratings from Fitch, GCR and Agusto.

The foregoing clearly shows that customer satisfaction should be the focus of every financial institution. To continue to grow their customer base, banks will need to accelerate their digital transformation and deploy channels that would deliver convenience and satisfaction to their customers.