By Prince Osuagwu
In the midst of several challenges including infrastructure deficit, cold war between banks and telcos, low awareness, agency banking is said to have the smartest key to unlock economic development.
Managing Director and Chief Executive, Itex Integrated Services Limited, Mr. Ernest Uduje, who spoke to Hi-Tech recently, said with a mixed agency banking model involving telcos and banks, cashless culture would improve tremendously in the near future
Itex just announced expansion plan after years of silent operations. What must have motivated this expansion plan and how will it benefit customers?
Yes, we have been quiet in our operations for some time now because we were working hard on our expansion plan, which we have just announced. We needed time to plan and get our plans right, but now that we are ready with our big plan, we can no longer remain quiet but sell our plan to our customers who will largely benefit from the expansion plan.
What are some of the products in your new business plan tailored towards sustainability?
We have products for the financial technology space, especially for the unbanked that will further drive financial inclusion.
We have solutions for settlement systems, web acquiring systems, merchants’ acquisition, among others. Some of our expanded service offerings from payment channels include PayVice, Terminal Application Management System (TAMS), Internet Payment Gateway, Afrimart and other bespoke services.
The Itex POS terminal application software is highly robust, with extreme flexibilities that allows for customised transactions both traditionally and digitally.
Unlike before, banks and FinTech players are striking better understanding and having healthy business partnerships. What is driving this new romance?
Initially there was lack of understanding about the roles of FinTech in the financial services industry, but as technology evolves, the roles of FinTech are becoming clearer to the financial players, especially the banks, hence the new collaboration between banks and FinTechs. Technology has also engendered trust and business growth.
The truth is that a lot of financial transactions and innovations going on in the banking industry, were generated and developed by the FinTechs, and the banks cannot do without FinTechs in this era of technology advancement
Technology is demystifying some financial transactions that were hitherto seen as the exclusive rights of the bank staff alone
Nigeria, aggressively driving cashless economy, is still regarded as a cash-based economy; why this irony?
Nigeria is still regarded as a cash-based economy because of the huge volume of cash that is still in circulation, even though several Nigerians do online and mobile financial transactions, as well as the use of Automated Teller Machines (ATMs) and Point of Sales (PoS) terminals for financial transactions.
From inception, Nigeria has been a cash-based economy, where every transaction is done with the exchange of physical cash. But that narrative is changing gradually, with the introduction of cashless economy by the CBN. The adoption of cashless has been slow, which is a major reason why many Nigerians still prefer to carry cash around for their financial transactions.
However, the country still requires more infrastructure that will complement the existing ones so that people in rural communities can have a feel of cashless economy..
Somehow, telecom operators and banks appear to be in cold war over mobile money operations. Bank-led or telco led, where will mobile money make the most impact?
Mobile money can be bank-led or teleco-led. What actually matters is the success of the system. In some parts of the world, it is bank-led, while in other regions it is telco-led, but in Nigeria, it has been bank-led, since its inception, but I am glad that the CBN is bringing in the telcos into the scene by the recent pronouncement on mobile licensing that is open to telcos and I can see that most telcos have applied for the licence and they have been licensed by the CBN to be part of the system. What this means is that we will see more penetration in agency banking and mobile money operations in Nigeria.
But again Nigeria is a different market from other markets and we hope that the new development will further drive cashless project in Nigeria.
How can the challenges of agency banking in Nigeria be addressed?
Major challenges are infrastructure and basic knowledge in information technology. Poor infrastructure has been identified as a major challenge and the government needs to build robust infrastructure that will enhance technology development in the country.
The people need to have basic knowledge of evolving technologies that are driving businesses and this is important for business growth and continuity. Itex, for instance, is involved in training and retraining of merchants, developers and customers in the area of agency banking and product development to further drive financial inclusion in Nigeria.