Role of Software in Boosting the Nigerian Financial … of Software in Boosting the Nigerian...

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Role of Software in Boosting the

Nigerian Financial Sector


Outline

Role of Software in Fueling Growth

Nigeria’s History of Banking

The Future

2

Today’s Software Landscape

The Financial Service Landscape


Democracy (1999 – Date)

Total Population: 174 Million

Number of States: 36

Number of Local Government Areas: 774

Total Adult Population: 80 Million

Economic Capital: Lagos (17.5 Million )

Federal Capital: Abuja (3.0 Million )

No. of Banks: 22 Commercial

No. of Bank Branches: 3,200

No. of ATMs: over 14,888

No. of Registered PoS: 118,661

Nigeria

NigeriaThe Financial Service

LandscapeNigeria’s Banking History Role of Software in Fueling

GrowthToday’s Software

LandscapeThe Future

1. World Bank, Wikipedia | 2. Lagos Bureau of Statistics| 3. United Nations Population Fund | 4. Central Bank of Nigeria | 5. Interswitch | 6. NIBBS


The Nigerian financial services industry is undergoing drastic changes for the following reasons:

� Consumer empowerment� New technologies� Globalization � Regulatory changes

Companies are more aggressive as they position themselves for increased market share and profitability.

Technology is also being deployed more effectively in identifying customer needs and providing relevant services.

To remain relevant in this industry, cost reducing strategies, mergers, acquisitions and alliances/outsourcing, are some of the challenges that need to be faced.

Financial Service Landscape




LandscapeThe Future


Financial Service Providers

Regulatory Authorities

Commercial BanksMerchant BanksCommunity Banks

Insurance CompaniesDiscount Houses

Finance CompaniesBureaux de Change

Primary Mortgage Institutions (PMIs)

The Federal Ministry of Finance (FMF) The Central Bank of Nigeria (CBN)

The Nigerian Deposit Insurance Corporation (NDIC) The Securities and Exchange Commissions (SEC)

Debt Management Office (DMO)National Insurance Commission (NAICOM)

The Federal Mortgage Bank of Nigeria (FMBN) Financial Services Co-ordinating Committee (FSCC)




LandscapeThe Future


African Banking Corporation – 1892

Bank of British West Africa –

1894

Barclays Bank – 1912

National Bank of Nigeria –

1933

British & French Bank for Commerce and Industry – 1948

African Continental Bank - 1949

Free Banking Era (1892 – 1959) – Absence of sustainable banking legislation, as anyone could set up a bank, provided it is registered under the Companies’ Ordinance Act 12

Beginning of Regulation (1959 - Date)CBN (est. 1959) – Setup of monetary policies, licensing and supervision of banks

NDIC (est. 1988) – To safeguard depositors’ fund


Landscape

Nigeria’s Banking History

Role of Software in Fueling Growth


The Future

7. Central Bank of Nigeria & Independent Research - THE EVOLUTION OF NIGERIAN BANKING SYSTEM, SUPERVISION AND CURRENT CHALLENGESBy Toluwani Alexander Ajayi LLB (Hons), LL.M Margaret Sosan (LL.M)


Transaction Processing

•Branch

•Web

•Mobile & Social

•ATM,

•Point of Sales

Customer Acquisition

•Onboarding

•Know Your Customer (KYC)

•Customer Relationship Management (Behavioral Influence & Churn Management)

Internal Processes

•Financial Performance Monitoring

•Internal Process Automation

•Human Capital Management

Software: the programs used to direct the operation of a computer, as well as documentation giving instructions on how to use them.

With the hardware they run on, they drive the technologies that Banks and users rely on run the business

Usage in Nigerian Banks


LandscapeNigeria’s Banking History Role of Software in

Fueling GrowthToday’s Software

LandscapeThe Future


Operational Efficiency Operational Efficiency

Straight-Through-Processing of transactions

Automation of Internal Processes

Human Capital Optimisation

Mobile / Social: Adoption of consumer technologies

for banking purpose

Profitability Profitability

Drive customer acquisition

Cost containment as part of the strategy

Better management of operational requirements

and supplies

Analytics of financials for better decision making

Improved transparency to stakeholders

Service ExcellenceService

Excellence

Customer Relationship Management solutions

Adoption of customer friendly technologies

Better feedback mechanism using different tools

Increasing usage of cutting edge software with rich user interfaces

Governance,Risk and Controls

Governance,Risk and Controls

Better regulatory supervision

Real time interaction with regulators and partners

for reporting

Better visibilities to risks inherent in the business

Automation of internal controls to reduce human

error

Factors Influencing Adoption of Technologies


LandscapeNigeria’s Banking History Role of Software in

Fueling GrowthToday’s Software

LandscapeThe Future

3

1

6

1

1

7

0 1 2 3 4 5 6 7 8

Core Banking Applications *

Finacle T24 ETHIX FLEXCUBE eBBS BANKS

Most Widely Used Software

#1

For most banks:- It’s the core of financial transaction processing

- Contains the following:

- General Ledger, - Fixed Asset Register- Receivables & payables and may be connected to another system for management

reporting- Interfaces with other systems for collections, payments and other transactional systems



Growth


The Future

* www.inntron.com/core_banking.html, www.dejiolowe.com/2011/04/15/core-banking-software-in-nigeria

Identity Management (Directory Services)

Online Banking for Corporates and Retail

Business Process

Management

Human Capital

Management

Card Switching & Management

Systems

Customer Relationship Management

System

Trade Finance

Other Widely Used Software

Other Software- Mobile Banking- Enterprise Resource Planning- Financial Performance Management- Fraud Management- Social media (Facebook, Twitter, LinkedIn, etc.)



Growth


The Future



Growth


The Future

High cost of software acquisition and setup of National Office for Technology Acquisition and Promotion (NOTAP) to help reduce this.

#1

Sub optimal usage of application functions with consideration for Nigerian environment.#2

Application security issues#3

Challenges in Software Usage

Development of local content#4


Reduced Total Cost of Ownership- Build Local Capacity- Partnership with Global OEMs

Consumerisation of IT- Customers dictate technologies to use

Interoperability- Disparate systems working together as one- Increased Integration




Landscape The Future

Business Intelligence- Customer Insight- Better Business Decision

Cloud / Mobile- Focus on Competitive Edge- Increased Customer Reach

Big Data- Lifestyle Banking- Create New Opportunities

Role of Software in Boosting the Nigerian Financial … of Software in Boosting the Nigerian...

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