Okonkwo: Our Focus is on Union Bank’s Next Growth Phase

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The incoming Chief Executive Officer, Union Bank, Mr. Emeka Okonkwo, in this interview speaks about how he plan to propel the financial institution’s growth as well as plan to leverage technology to provide more value to customers. Nume Ekeghe presents excerpts:

Can you give us a background to your banking career, leading up to your appointment as CEO of Union Bank effective April 2021?

I have always been a banker, even though I have a Bachelor’s degree in Civil Engineering from the University of Nigeria, Nsukka, an MSc in Construction Management from University of Lagos and an MBA from Warwick Business School, UK. I began my career in banking about 30 years ago at Citibank Nigeria, where I started off at officer level. By 2009, I had risen to the role of Executive Director in charge of Commercial Banking and Global subsidiaries. During my time at Citibank, I worked in Corporate Finance, Credit Risk Management, Marketing, Treasury and Strategic Management, both in Nigeria and the United Kingdom; and was later appointed the Head of Corporate and Investment Banking Division in Citibank Bangladesh in 2011. I joined the team at Union Bank in 2013, as an Executive Director responsible for rebuilding and leading the Corporate Banking Business.

Your predecessor has done remarkably well in growing the bank’s balance sheet and customer base, as well as revamping the image of the bank. What will you do differently to continue the growth trajectory?

Emeka Emuwa has done an incredible job here at Union Bank. He took over the reins in 2012, on a mission to transform and to re-establish the bank as a leading provider of financial services in Nigeria. Today, we are a solid mid-tier bank, going toe-to-toe with our competitors within the industry. Emeka and I have worked very closely together as I joined the bank a year after him to head the Corporate Banking business. We have been in the trenches together as we navigated the very challenging journey of transforming and rebuilding this institution. Due to our strong collaboration over the last seven years and our joint refresh of our bank’s strategy late last year, our priority now is to focus on the next phase of growth for Union Bank. I am proud to say a solid foundation has been set and I am confident that we will build on this to accelerate our growth. As we move ahead, our focus will be on turbocharging customer acquisitions and transactions, while we continue digitalising our operations to ensure we remain a truly ‘simpler, smarter bank’. We will also sustain our investments in robotics, artificial intelligence and data analytics to automate key processes and deliver personalised experiences. In addition to these, we will ensure cost control through operational efficiency and an effective cost optimisation program. Finally, we will be taking a ‘beyond banking’ approach to engaging with our customers and stakeholders, to ensure we are truly Nigeria’s most reliable and trusted partner.

What would you do differently to increase your retail banking customer base?

Our retail strategy has been consistent over the years. We have continued to emphasise a ‘customer first’, digital-led approach to serving customers. This has led to significant growth in our retail base, transaction volumes and even our deposit and loan books. As we move ahead, we are focused on customer acquisition and channel optimisation through reliable digital channels and self-service platforms. We will also continue to provide compelling and innovative products – especially lending and transactional offerings – to drive customer transaction growth and service delivery.

Predictive data analytics will continue to be a strong element of our strategy. We will leverage predictive / proactive data analytics for relationship management, cross-selling, up-selling and risk management. We will also be interested in broadening our partnerships with tech companies, telcos, merchants, and fintechs to ensure our brand is embedded in our customers’ lifestyle, goals and aspirations.

For a long time, Union Bank was perceived as a bank for the older generation. However, we have begun to see a shift in perception. What strategies will you put in place to cultivate the youth market?

We pride ourselves on being able to marry the wisdom of age with the agility of youth in a way that appeals to all age groups. This combination is possible because we realise the importance of innovation, and over the years, we have focused on reinventing ourselves to continue to satisfy the existing customer base as well as those we intend to attract. Through continued investments in our people, processes and structures, we will maintain excellent service delivery across all our touchpoints and deliver on our brand promise ‘to provide simpler, smarter banking services.’ Lastly, in line with our customer-led approach to banking, we will continue to build tailored propositions and products that best suit our customers’ needs and enable their success.

Technology was a big step for your predecessor in terms of enhancing banking processes and automation, how do you intend to exponentially increase market share with the use of technology?

I believe technology will remain critical in our next phase of growth and I am happy that our investments are yielding positive results.

As mentioned earlier, we will continue to invest heavily in data analytics, AI and use robotics to automate processes that are repetitive in nature. We have done with well with refunds, reconciliations, and term deposit booking –these processes are now done within minutes. We have migrated a lot of our products and services to our digital channels. For example, accounts can now be fully opened and operational on our mobile app with cards delivered to customers’ home and activated remotely. This ensures that we can exponentially grow our base. Customers are also able to apply for loans online with the funds disbursed within minutes. We will continue to invest in technology to deliver simpler, smarter experiences to our customers. We will also continue to refresh our system at intervals to ensure that the network is always optimal and reliable, reducing the possibilities of system downtimes and ensuring faster processing of transactions.

What is Union Bank doing to attract more customers and contribute to the growth of the economy in terms of lending to the critical sectors of the economy?

At Union Bank, our customers are at the heart of our business. In line with our mission to ‘make lives better by providing the simplest, smartest solutions and guaranteeing the best experience every time’, we are dedicated to continuous investment in our people, processes, and platforms to deliver this mission. Our customer acquisition strategy has technology at its core to provide self-service, personalised and tailored solutions that support our customers’ goals and aspirations. We believe this strategy will retain existing customers and attract new ones. We have been building a digital-led bank over the last three years and the current situation with the coronavirus pandemic has only accelerated the momentum. In line with our strategy, we have grown our customer base from 5.8 million in 2019 to 6.6 million in 2020 with a corresponding increase in transaction volumes. Approximately 94 per cent of all our customer transactions are also now done digitally. In terms of lending to critical sectors of the economy, we continue to prioritise this in executing our strategy, fully supported by our robust risk management practices. This has led to a gross loan book of N736.7 billion as of December 2020, a 24 per cent growth from N595.3 billion in December 2019. We have witnessed increased activities in the manufacturing, general commerce and retail sectors and we expect to do even more with emerging opportunities in those sectors as we will continue to grow our lending base while being prudent.

Union Bank has chosen to focus on the Nigerian market as it builds for the future. Why have you taken this path when most banks seem to be keen on exploring beyond the shores of Nigeria?

We have a clear vision to be Nigeria’s most reliable and trusted partner. This vision is based on the distinct long-term opportunities that the Nigerian market provides, as well as our strengths, competencies, and the solid investments we have made in broadening and deepening our roots here over the years. We are confident that our Nigeria-centric strategy will pay off for us in the long run.

Do you think banks are doing enough in the area of financial inclusion? If no, what would your bank do differently to deepen financial inclusion?

Nigerian banks have done quite a lot to drive financial inclusion in the country, especially through the Financial Literacy and Public Enlightenment (FLPE) sub-committee of the Bankers Committee. But we need to do even more to reach and serve the unbanked and under-banked. At Union Bank, we have approached this from several angles. First, we have developed products and services that serve the needs of low-income earners, as well as the banked and under-banked. Our UnionDaiDai account lowers the entry barriers for people in this demographic group and offers them the opportunity to open accounts and gain access to the financial system. UnionDirect, our agent banking network is another way in which we continue to deepen our impact in this area. We grew our network from 3,100 enrolled agents in 2019 to over 18,000 agents in 2020. Going forward, we will continue to expand our UnionDirect footprint to reach more underserved communities, shrink the size of the unbanked population in Nigeria, and ultimately drive economic growth in Nigeria.

What is your general assessment of the regulatory environment as banks appear to be facing serious headwinds due to the regulatory environment; what is your take?

Our regulatory environment will always be present, and we need to understand that the importance of regulation is to ensure proper functioning and stability of industries and the economy. Banks, just like other industries have faced headwinds over the last year and conquering those headwinds will require resilience and innovation. At Union Bank, we have those qualities in spades. As we know, where there are headwinds, there are opportunities and those who win take advantage of these opportunities will come out tops in the end.

We will continue to work with our regulatory agencies to advocate for policies that will benefit all concerned. At the same time, we will continue to innovate and strengthen our corporate governance and business practices to ensure we are here for the next 100 years.

What should your customers expect from Union Bank when you assume the leadership?

Our commitment to our customers is to be that reliable and trusted partner committed to enabling their success. We have also promised to make lives better by providing the simplest, smartest solutions and delivering the best experience every time! This is our mission, and this is what our customers can expect from us.

What is your general outlook for the economy in 2021 and Union Bank in particular?

In 2020, Nigeria’s GDP declined by 1.9 per cent, but it was a relief to see a 0.11 per cent GDP growth in the fourth quarter of the year, thanks to the non-oil sector. The positive growth implies that the Nigerian economy is technically out of the pandemic-induced recession that disrupted economic activities for most of 2020. In 2021, we expect Nigeria’s GDP to rebound by 1.5 – 2.0 per cent, fueled by increased economic activities in the non-oil sector. And the different government interventions and economic recovery and growth plan, as well as improvements in the oil market. Agriculture, ICT and Trade remain the biggest sector contributors to GDP and will continue to present opportunities for growth. At Union Bank, we see opportunities in some sectors that witnessed increased activities last year or remain the focus for our government’s economic growth plans including agriculture, manufacturing, trade, information and communications. We will seize emerging opportunities in those sectors as we will continue to create selective risk assets that meet our risk assessment criteria. We are confident in our growth strategy, and we are confident that we are on the right path to being a leading financial institution in Nigeria.