Look Around You!

1. Protocols & Greetings

The President/Chairman of Council CIBN, Mr. Bayo Olugbemi, FCIB

The Honorable Minister for Communication and Digital Economy, Dr. Isa Ali Pantami,

FNCS, FBCS, FIIM

The Deputy Governor, Economic Policy Directorate, Central Bank of Nigeria, Dr.

Kingsley Obiora.

The 1st Vice President, Dr. Ken Okpara, FCIB

The 2nd Vice President, Prof. Pius Olanrewaju, FCIB The National Treasurer, Mr. Dele Alabi, FCIB

The Registrar/Chief Executive, Mr ‘Seye Awojobi, FCIB

The Past Presidents of the Institute here present

Distinguished Members of the Governing Council

Ladies and gentlemen

Inductees and Graduands


Welcome and greetings. This morning 1,311 of you who aspired to this certification have succeeded. Congratulations on this achievement.


2. Introduction

This morning, my address will focus on the digital economy and the role of professional bankers. I have chosen the more provocative title of “Look Around You” because it’s a call to action and preparation for the future.


Before I start, permit me to introduce this new economy.


The Information Age succeeded the Industrial Age and is characterised by digital assets using information technology resources like computing systems, networks and communications. In this era, information is an organisational asset, albeit intangible. Alongside every industrial revolution are new economic models that change the way business and society live accorded by the effects of the industrial revolution. For example, written communication delivery first used carrier pigeons, then moved from messengers to horses and now snail mail to electronic mail.


By creating the Ministry of Communication Technology in 2011 and it’s renaming to the Ministry of Communications and Digital Economy in 2019 are evidence that this trend has not gone unnoticed in Nigeria. And it’s my pleasure to have our (my) Honourable Minister, Dr Isa Ali Ibrahim Pantami, in our midst today. Earlier this year, the Honourable Minister launched Nigeria's Digital Economy Strategy that will diversify Nigeria’s economy beyond oil. Evidence from the GDP Contribution reports published by the Statistics Bureau confirms this trend. The latest Q2 2020 reports growth in GDP contribution of the Information and Communications Technology Sector to 17.83% from 13.85% in the same period of 2019.


By creating the Ministry of Communication Technology in 2011 and it’s renaming to the Ministry of Communications and Digital Economy in 2019 are evidence that this trend has not gone unnoticed in Nigeria. And it’s my pleasure to have our (my) Honourable Minister, Dr Isa Ali Ibrahim Pantami, in our midst today. Earlier this year, the Honourable Minister launched Nigeria's Digital Economy Strategy that will diversify Nigeria’s economy beyond oil. Evidence from the GDP Contribution reports published by the Statistics Bureau confirms this trend. The latest Q2 2020 reports a growth in GDP contribution of the Information and Communications Technology Sector to 17.83% from 13.85% in the same period of 2019.


The digital economy was birthed alongside the Information Age and represents the levels of economic activity from digital connections between people and businesses and extending to devices, data and processes. These connections or interactions depend on the interconnectedness of people, organisations and machines facilitated by the internet, mobile technology and the internet of things (IoT).


By creating the Ministry of Communication Technology in 2011 and it’s renaming to the Ministry of Communications and Digital Economy in 2019 are evidence that this trend has not gone unnoticed in Nigeria. And it’s my pleasure to have our (my) Honourable Minister, Dr Isa Ali Ibrahim Pantami, in our midst today. Earlier this year, the Honourable Minister launched Nigerias Digital Economy Strategy that will diversify Nigeria’s economy beyond oil. Evidence from the GDP Contribution reports published by the Statistics Bureau confirms this trend. The latest Q2 2020 reports a growth in GDP contribution of the Information and Communications Technology Sector to 17.83% from 13.85% in the same period of 2019.

The dimensions of growth span the entire economy, but I want to focus on the financial services industry and the nexus between digital technologies and financial services - digital financial services. Coincidentally, digital financial services is one pillar of the Digital Economy for Africa (DE4A) Initiative - The World Bank’s support for the African Union’s Digital Transformation Initiative for Africa that wants to see the digital enablement of every African individual, business, and government by 2030.


In 1949 George Orwell published the book Nineteen eighty-four. In that literary classic, Orwell projects into the world of government and society in an imagined future year - 1984. My memory of this piece is the phrase “Big Brother is watching you” where he envisaged a world of perpetual government surveillance.


Later in 1994, Bill Gates in his capacity as CEO of Microsoft stated: “Banking is necessary, banks are not”.

Because the lion share of your work is in banks, I would urge you to spend a moment reflecting on that statement. I am certain some of you are thinking, “where will I work?”, “what’s the point of this certification?” Or some of you will think “26 years have already passed, his prediction is inaccurate”.


Well, a thorough examination of these statements will provide insights into our discussions today.


Amidst the realities of the digital economy and the future statements, here we are celebrating your induction into this esteemed establishment. You have earned another feather. Is having the feather enough or could the feather speed up and contribute to the digital economy and build a digital Nigeria?


I would say the latter, but that would require answers to the questions such as “how digital am I?; how digital are we (at the organisational and sectoral level)? My presentation this morning is to highlight what is going on around us. Please note that my insights may be diverse, but I will relate them to banking.


Are we to care or why should we care about the future?


3. Digital Transformation


As a banker, how digital are you?

There are emergent shadow pandemics alongside Covid-19, one of such is the employment pandemic.


First, we have seen jobs transition from place to space, where work is not just a place we go to but an activity we carry out. Given that not all work is digitally enabled, the value of some roles in the organisation will be re-validated. An example of this is in the Civil Service, where workers below a certain grade have been away from work and unable to work for months. Digitally enabled work means that work activities or business processes are executed digitally (without paper) end-to-end (inter-departmental and inter-organisation).


Related to this is that organisations are distributed and aggregating quality digital infrastructure at one location is inefficient because now, our homes are our workplaces and our organisations have to accommodate this shift. This also raises the issue of the digital tools we buy. Because our models have been place-based, desktops have dominated the workplace; but how portable are those desktops? Again this raises the dilemma of information security and data theft when organisational information is dispersed across machines. The digital infrastructure and tools deployed in our homes require hard infrastructure like electric power and housing conducive to home-based work.


Because more jobs will be tech-enabled, the activities described need not just digital skills, but also a digital mindset with a fresh perspective on productivity - from effort-based to one of achievement orientation. Because for each digitally enabled, space-based job, geographic boundaries are no longer a barrier.


In the banking industry, such digital skills include:

  • Future communication: engaging customers digitally

  • Digital awareness: the ability to understand and use technology

  • Data-driven decision making: applying insights derived from data to decisions and

  • problems

  • Human-centred design: designing products and services from the customer

  • perspective

  • Risk & governance: understanding and managing risks in a digital world


Customers are an integral part of our ecosystem, but how digital are they?

With certain customer segments, digital literacy constrains digital banking.


As a financial services provider, how digital are we?

The digital transformation of the banking industry has been an interesting journey that started in the 1990s when the new generation banks introduced online real-time banking enabled by core banking applications and communications networks. This evolution has evolved beyond branch banking and spans digital financial instruments and delivery channels. While our financial services ecosystem has recorded significant progress in areas like the bank verification number (BVN) and instant payments, the surge on bank branches after the first phase of the lockdown presented some interesting challenges to the financial services ecosystem and the digital transformation of financial services. There’s still work to be done!


To what extent are we providing digital financial services?

Digital financial services or financial services provided through digital channels are in existence, but are they sufficient? I relate the sufficiency argument to penetration levels as they are yet to reach all Nigerians. So when we compare the financial inclusion levels with mobile telecoms or even Internet usage, vis-à-vis their maturity (100 vs 20 years).


The informality of the economy and dominance of cash requires innovation capabilities that extend beyond digitising cash to developing financial solutions that meet the needs of the larger population.


Let’s consider the industry and ask how digital are we?

The ability to reach 100 million adult Nigerians introduces the state of the financial infrastructure. This infrastructure has developed beyond physical branches that offer over- the-counter services to digital (self-service) channels or touch points like automated teller machines (ATMs), Point of Sale (PoS) terminals and individual mobile devices.


Other than the digital infrastructure, the changing financial services landscape is one we must also acknowledge and recognise.


The 2008 global financial crises was the catalyst that led to a call to action by younger and tech savvy bankers disillusioned with the antecedents of the legacy players alongside reducing public distrust of bankers, technology evolutions, and access to finance (A2F) solutions for MSMEs.


These young bankers disrupted financial services. Becoming financial technology providers, also known as Fintech’s that are not just building innovating digital solutions, but also using innovative technologies and addressing customer needs. The CLASSIC acronym best describes fintechs.


  • C: Customer-Centric - building products around the customers demands using customer-centric design approaches

  • L: Legacy Free - they are purpose-built and free from all prior encumbrances

  • A: Asset Light - they are asset-light, sourcing most of their technological capabilities

  • from the cloud

  • S: Scalable - they leverage partnerships and simplicity to foster scale

  • S: Simple - they are not trying to be all things to all men, building focussed and

  • compact solutions

  • I: Innovative - they use innovative technologies, operate innovative business models

  • C: Compliance Light - in their simplicity they either reduce or avoid the need for

  • authorisation


These new entrants have challenged the status quo of banking as we know it, forcing us to re- think financial services. I will share 3 perspectives:


1. Function vs. Definition

⁃ The legacy view of financial services is according to the entity where the

services provisioned are related. In this alternative world, the entity by its definition can differ from the functions or services provisioned. This unbundling that fragments the industry, increases the number of actors in the ecosystem, has implications also for regulators.


2. Data-driven vs. Data-based

⁃ We live in a world where data is everywhere - 3Vs we should know are High

velocity, Large variety and Big volumes. However, are we storing this data or are the insights drawn from data available for business and policy-related decisions? Are the internal competencies designed to exploit data?


3. High-tech vs. Low-touch

⁃ Financial services have been operating high-touch, low-tech models, as it

relates to customer interactions. However, with growing markets, technological advancements, the narrative is deviating towards high-tech, low-touch. This coincides with the on-demand economic model where customers choose when, where and how they desire services provisioned.


4. Conclusion

Ladies and Gentlemen, I have presented a few thoughts on digital transformation across the individual, organisation and industry lenses.


Let’s imagine the bank of the future. We may not even call it a bank because it’s an entity that provisions services by enabling financial flows. We are moving towards banking-as-a-service (BaaS) model where the licensed and regulated entity known as the bank is a back office provider while the fintechs access the banking services and provide them to customers. In a quirky way, this B2B2C model is like the way technology was first provisioned to banks as invisible back office providers.


And here you all are, gaining a banking certification in a future world where banks may no longer exist. I urge you to look around you, the dynamics have changed and my question is where will you play? Are there 2 camps - bank vs. Fintech? Will we collaborate or compete? Will we play to our strengths or duplicate?


Ladies and gentlemen, we are all witnessing your acquisition of a new certification and I want you to remember that this certification represents - a qualification and commitment to providing banking services and not to work in a bank!


Congratulations once again and I wish you all success in your digital careers. Thank you for listening.

* This address was delivered at the 2020 CIBN Graduates’ Induction & Prize Awards Day held Virtually on August 29, 2020.

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