Banks are deploying digital banking infrastructure to bring services closer to customers and record higher profitability.
Increased deployment and usage of Unstructured Supplementary Service Data (USSD) and mobile banking channels supported Access Bank’s N450.6 billion gross earnings in the first half of the year. Investment in banking technology is enhancing service delivery to customers and yielding higher returns to shareholders.
The integration of digital technology into almost every facet of peoples’ lives has transformed the way they communicate, socialise, do business and conduct financial transactions.
For many financial institutions, investment in technology remains a priority given the huge benefits it presents. Such investments are more pronounced in today’s world where major aspects of banking operations are technologically-driven.
That explains why digital banking is gaining grounds, helping the banked, underbanked and unbanked connect to the financial system.
Banks are not only competing for the mobile apps space, or better ways to serve customers, they are also launching new products and services targeted at bringing services closer to the people.
One of the banks that has made huge investment in technology is Access Bank Plc. The investments have supported its digital banking operations and increased its earnings position in the first half of 2021.
Earnings rise on tech deployment
Access Bank grew its half-year pre-tax profit by 31 per cent to N97.5 billion in the first six months of 2021 from N74.3 billion in the same period of 2020. The bank recorded a 14 per cent jump in gross earnings to N450.6 billion compared to N396.8 billion in 2020.
Its unique business model that supports the corporate and retail value chains throughout the African continent and beyond and huge investment in technology contributed to this revenue jump.
With improving profitability, resilient capital position and robust, diversified balance sheet, the Group is on track to deliver on its vision to be the World’s Most Respected African Bank.
Group Managing Director/CEO Access Bank Plc, Herbert Wigwe, said: “Our push for digital innovations to improve efficiency for our customers resulted in significant increase in our USSD transaction volume (+62 percent year-on-year) and our Mobile and Internet Banking transactions volume (+67 per cent year-on-year)”.
Wigwe has over the years of his leadership in the Tier-1 bank put it on a path of sustainable growth and profitability. He is also leading the bank in a diligent expansion drive that focuses on bringing value to customers and returns to shareholders.
Wigwe further said: “Over the last few months, we have successfully completed acquisitions in South Africa, Mozambique, and Zambia, emphasising our footprint in key markets around the globe. We will continue to grow our presence in geographies with significant growth potential, especially where they support our global customers.”
“As we become Africa’s Gateway to the World, we would also seek markets that supports our trade and payments aspirations and the African Free Trade Agreement. To further enhance our operating efficiency and ensure strong returns on invested capital, we will bring the best of our group assets, specifically our digital banking capabilities that support individuals and businesses, enhance financial inclusion, and deliver the benefits of a strong network effect across our enlarged Group”.
“Throughout the pandemic, we have been able to demonstrate our ability and willingness to support our customers, our communities, and our colleagues. As the outlook improves, and as business returns to a new normal, we will continue to support our communities in order to stimulate growth and create new opportunities. To accomplish our vision to be the World’s Most Respected African Bank, we are working together across the Group on the back of our robust balance sheet, increased retail momentum and efficiency”, the bank’s CEO further noted.
Expanding border transactions
The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, urged Nigerian businesses to seize the the African Continental Free Trade Agreement (AfCFTA) opportunity to ensure that Nigeria serves as a significant hub for international and domestic companies seeking to serve the West, Central and East African Markets.
The Chief Executive of Financial Derivatives Company Limited, Bismarck Rewane said AfCFTA will create the desired impetus to stimulate the economic growth of Nigeria in 2021.
Rewane, in his presentation at the Lagos Business School recently, entitled “2020: A year to remember or forget” said, “The year 2021 may hold brighter economic omens for Nigeria than the outgoing one.
“Among the specific engines expected to stimulate growth in the incoming year is the African Continental Free Trade Area, AfCFTA,” he said.
Access Bank Plc also expressed its commitment to be at the centre of AfCFTA implementation process, providing banking services to rising African population. The bank is expanding its operations across Africa to ensure that it is fully on ground to meet the increasing banking needs of the over 1.3 billion Africans targeted in the AfCFTA deal.
Wigwe explained that across Africa, there is an opportunity for the bank to expand to high-potential markets, leveraging the benefits of AfCFTA.
He said AfCFTA, among other benefits, would expand intra-Africa trade and provide real opportunities for the continent.
He stated that the plan is for the bank to establish its presence in 22 African countries so as to diversify its earnings and take advantage of growth opportunities in Africa.
According to him, Africa has enormous potential and there are opportunities for an African bank that is well run, that understands compliance and has the capacity to support trade and the right technology infrastructure to support payments and remittances, without taking incremental risks.
“We believe that we are best positioned to basically do all of that. Our focus is to become an aggregator in Africa and we are building a global payment gateway and providing trade finance support and correspondent banking across the continent. We are focusing on the key markets.
“The approach would always be that in the country we wish to go to, that we have the right skills. We would not just be a drop in the country in which we are present, we would make sure that we have an impactful presence in each of the major countries in which we are present.
“In doing this, we are also mindful of the country we are going to so as to make sure that it is of benefit to the bank. As we do this, we are working with our friends and partners.”
“We are diversifying our earnings away from volatile markets as well and we are orchestrating our operations from the global payments gateway and ensuring that using Access Bank UK, providing corresponding services from digital platforms, the overall profitability of our franchise,” he explained.
Commenting further, on AfCFTA, he said the bank would use its digital framework to benefit from the continental agreement.
“Coming to Nigeria, we think we need to continue to entrench ourselves in the local market because there is still so much work to be done. So, we are doing everything possible to satisfy our customers and also to ensure that our channels are adequately secured. We are also ensuring that our staff are very efficient,” Wigwe said.
The AfCTA trade bloc offers a potential market of over 1.3 billion people and a Gross Domestic Product size of over $3 trillion.
According to The United Nations Conference on Trade and Development (UNCTAD), there is the potential for intra-African trade to rise to 15.5 per cent as a share of total African trade by 2022 compared with 10.2 per cent from 2010.
The African trade pact aims to bolster intra-regional commerce by lowering or eliminating cross-border tariffs, facilitating the movement of capital and people, promoting investment and paving the way for the establishment of a continental-wide customs union.
Signed in Rwanda in early 2018, the AfCFTA is aimed at promoting the free movement of businesspeople, goods and investments across Africa – a market of 1.3 billion people.
Grassroots customers reached
Under Wigwe, Access Bank Plc, has equally commissioned and empowered 74,000 Access Closa agents to provide financial services to customers across Nigeria.
This aligns with its mission to deliver superior value to its customers and provide innovative solutions for the markets and communities it serves.
The bank in a statement stated that these Access Closa Agents are spread across the 774 Local Government Areas in the country, the bank has significantly grown access to finance and banking services to Millions of previously underbanked Nigerians, provided alternate streams of income for MSMEs, promoted financially literacy and also advanced its ambition to bank one in every two Nigerians by 2025.
Senior Banking Advisor, Retail, Access Bank Plc, Robert Giles said the bank’s agent network was part of the its promise to ensure easier and safer access to financial services for every Nigerian.
He said: “As a bank driven by innovation, we must deliver better outcomes for customers in terms of speed, security and service to enhance customer experience in all the locations that we operate. With the recent mapping of over 70,000 Access Closa Agents, customers and non-customers of the Bank who are traveling for Business, events or to visit loved ones in any location in Nigeria will continue to enjoy uninterrupted banking services as our Closa agents are available in several rural and semi-urban locations across the country.
“They can also access financial services from a Closa agent near them, by simply searching for “Access Closa Agent” on Google Map instead of walking long distances in search of a branch.”
Head, Agency Banking, Access Bank Plc, Tolulope Oyeyipo, said: “The Access Closa agent network is a bespoke channel through which Access Bank expresses her passion and commitment to broadening the opportunities and access to financial services for every Nigerian and African, irrespective of where they might be.”
With over 70,000 agent locations spread across every neighborhood in the country, we are making sure our customers and indeed customers of other banks can enjoy seamless banking services close to where they live and work, in a safe and convenient manner. By offering basic financial services such as cash withdrawal, cash deposit, bill payments and account opening, our continuously growing agent network is increasingly making the need to visit a bank branch unnecessary for everyone. We are committed to being at the forefront of providing digital financial services in Nigeria,” Tolulope concluded.
Credit expansion to customers
Access Bank says it is providing more access to credit to SMEs. In an emailed note to customers, the bank disclosed that it understands challenges SMEs face in accessing finance at a favourable interest rate and repayment period.
The bank is working on the intervention fund support for healthcare sector created by the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, to ameliorate the effect of the COVID-19 pandemic in Nigeria. The bank said that aside its digital lending platform it created for customers’ convenience, it also offers loans at a favourable interest rate, flexible repayment period with no collateral.
