Exclusive interview with Dr Adesola Adeduntan, CEO, First Bank of Nigeria Limited
In 2019, FirstBank celebrated 125 years in operation, a huge milestone. How has the bank remained at the forefront of banking development in Nigeria?
FirstBank’s brand promise is to always put its customers, stakeholders and partners first and at the heart of its business. Its mantra, “You First” has been one of the leading themes that have placed the Bank at the forefront of banking development in Nigeria. Over the years, FirstBank has remained resilient, overcoming varying challenges to set the pace on many fronts across the financial service landscape. It has built a formidable deposit-generating machine, leveraging many key competitive advantages including a robust branch network, large retail client base, strong relationships with the top domestic and multinational corporates and institutions, as well as brand perception of solidity based on longevity and resilience. This unique attribute has portrayed the iconic brand as a dominant and reliable banking franchise to its stakeholders.
FirstBank is presently a distinguished dominant player in the financial Inclusion drive having grown our agents (Firstmonie) to over 50,000 across Nigeria and has processed over N3trillion worth of transactions through the initiative. FirstBank is therefore about the only bank with presence across the length and breadth of Nigeria and agent locations in 770 Local Government Areas in Nigeria.
In the digital banking and payments space, the Bank remains the industry leader with virtually 3000 ATMs deployed across Nigeria, over 9 million users on USSD and over 3.5 million subscribers on the FirstMobile App. It is worthy of note that FirstBank was the first to deploy self-service capabilities on a banking mobile app, where customers can enroll themselves on the FirstMobile App from start to finish. The Bank was the first to introduce instant issuance of cards to customers in the branches; the first in Nigeria to issue over 10 million cards to customers; and the first to enable merchants to self-enroll for Quick Response (QR) Payment on the FirstMobile App.
FirstBank introduced the Visa Multi Currency Card, an All-in-One card and first of its kind to be offered by any financial institution in Africa. This card can be linked to four currencies: Naira, United States dollar, Euro and British Pounds Sterling accounts and can be used within and outside Nigeria. In addition, the Bank launched its Digital Innovation Lab not too long ago. FirstBank remains innovative in meeting the needs of its customers and providing them with world-class financial products and services.
In your opinion, what are the current challenges and opportunities for the banking industry in Nigeria?
One of the current challenges in the banking industry is with respect to revenue generation and profitability. Overall, the industry has witnessed significant changes in the interest rate environment of most government securities. The implication of the low interest rate environment is that banks in Nigeria will need to refocus their business strategies towards growing risk assets portfolio by funding quality wholesale transactions and aggressively driving consumer/retail lending. Given the policy thrust of the CBN to boost lending and support growth of the economy and the revised minimum loan to deposit ratio (LDR) of 65%, the industry will naturally witness increased lending to the real sector by Banks in 2020
Another challenge is the threat of increased competition by both the incumbents and the Fintechs and Bigtechs, as well as the newly licensed Payment Service Banks. Banks will focus more on leveraging innovative technology capabilities to drive improved customer experience as well as improve internal operating efficiency.
Despite the challenges, there are significant opportunities in the industry for banks to leverage innovative technology capabilities to drive improved customer experience as well as improve internal operating efficiency. Many banks will be making strategic investments in data and analytics, as data has been tagged as the “new oil”. Overall, the industry will witness an increase in the deployment of digital banking platforms, artificial intelligence, robotics and analytics capabilities.
Given the dynamic changes in customers’ tastes and needs; there will be opportunities to create new product and channel offerings or entry into new sectors / segments that are not the industry’s traditional play area – the areas that have high potentials to deliver additional revenue streams.
Driving Financial Inclusion has been a focus for FirstBank. Why is this a key driver and how well has the bank fared?
In line with the Central Bank of Nigeria (CBN)’s initiative to reduce financial exclusion rate from the present 36.8 per cent to 20 per cent this year, FirstBank has remained at the fore front of driving nation-wide financial inclusion.
With over 50,000 agents in 770 LGAs across the country, FirstBank is actively providing financial services such as account opening, funds transfer, BVN enrolment, cash withdrawal, cash deposit, bills payment etc. in areas with previously high rate of financial exclusion and beyond traditional banking hours to customers and non-customers of the Bank. This scheme also has social impact as it is a source of revenue for individuals and small businesses – over 150,000 direct and indirect jobs have been created with an average monthly income of N70,000 earned per agent. It is also worthy to note that 23% of FirstBank’s agents are female.
FirstBank Agent network is the largest verifiable Agent Banking network in Nigeria today. As at December 2019, the Bank had processed transactions worth over N3trillion.
What is the role of Financial Inclusion in achieving Sustainable Development Goals (SDGs)?
Financial inclusion is an enabler of other SDGs; specifically targeting 8 of the 17 goals. These include SDG1, on eradicating poverty; SDG 2 on ending hunger, achieving food security and promoting sustainable agriculture; SDG 3 on providing health and well-being; SDG 5 on achieving gender equality and economic empowerment of women; SDG 8 on promoting economic growth and jobs; SDG 9 on supporting industry, innovation and infrastructure; and SDG 10 on reducing inequality. Additionally, in SDG 17, on strengthening the means of implementation there is an implicit role for greater financial inclusion through greater savings mobilisation for investment and consumption that can spur growth.
With access to financial services, people can invest in businesses; education; live healthy lives; farmers get rich agricultural produce and women are more empowered.
Our approach to driving the SDGs is in two-fold: firstly, aligning our corporate responsibility & sustainability strategy based on our business goals; the Nigeria Sustainable Banking Principles (NSBPs) and global best practice in integrating sustainability within the business operations; and secondly creating awareness amongst staff and other stakeholders through sustainable partnerships.
While the Bank works towards promoting all 17 SDGs, we focus more on 8 of the goals because they are material to us. These goals are: 1, 2, 3, 4, 5, 8, 13 & 17. Let me explain briefly three of these goals. Take Goal 4, Quality education: we have contributed to educational development in the country through our key corporate responsibility & sustainability programmes including Infrastructure Development Programme; Endowment Programme; Financial Literacy, Entrepreneurship and Career Programme. Here, we support infrastructure projects in 13 universities and 3 secondary schools across the 6 geo-political zones in Nigeria; empower over 60 secondary schools; 80,000 secondary students; contributing over 40,000 staff volunteering hours in the process. Secondly, under End Hunger & Achieve Food Security – Goal 2, we have partnered with CBN, in driving agricultural financing through such schemes as Commercial Agricultural Credit Scheme; real sector support facility for MSMEs; held FirstBank Agric Expo in three consecutive years since 2017 and have supported Agriculture in seeds and equipment funding with over N200 billion naira.
Thirdly, Gender Equality – Goal 5. The Bank is committed to maintaining a positive work environment and to conducting business in a positive, professional manner by consistently ensuring equal employment opportunities. To this end, the Bank has put in place a couple of initiatives. These include FirstBank Women Network. This is an internal initiative designed to empower female staff and focuses on Influencing Career Pipeline; Networking Opportunities; Mentoring, Coaching and Sponsorship Opportunities; Counselling, Support and Welfare. There’s also a deliberate policy at the board representation. For example, we have three female Chairpersons across the Holding Company’s owned operating entities: FirstBank; FBN Quest and FBN Life Insurance.
FirstBank has made various alternative channels of banking available and created several products to cater for customers’ needs. One example of such products is FirstGem. Can you tell us about this unique product?
FirstGem is a bespoke solution to foster empowerment of women across the socio-economic strata. FirstGem which has recorded significant milestones is a product that is ideal for all women aged 18 years and above, whether working professionals or entrepreneurs; and it comes in two variants, savings and current accounts.
The FirstGem initiative is implemented across three pillars – Creation of a FirstGem platform for women; Value proposition for women MSME’s (capacity building, affordable finance, access to infrastructure, market visibility); and a strong commitment as a financial institution to support women by leveraging the Bank’s resources in developing unique and mutually rewarding solutions.
The benefits of the product include: access to leadership programmes/workshops/training on women empowerment, business skills on wealth management and investment plans, access to annual medical and health programmes/events sponsored by the Bank for women, among others. Empowering women via agent banking is also one of the outcomes of the FirstGem initiative. It brings us much joy to see that more women are embracing this proposition and are getting empowered.
As the oldest Bank in Nigeria, First Bank of Nigeria Limited has played a major key role in the social and economic development of Nigeria. In what particular ways has the Bank achieved this?
FirstBank has always been committed and passionate in contributing to the growth in social and economic development of Nigeria through strategic actionable initiatives. The Bank has played a key role in the social and economic development of Nigeria in so many ways. FirstBank once played the role of the regional Central Bank and has also produced two Central Bank governors over the years. The Bank is empowering SMEs through its SMEConnect, a portal that caters for the needs of small and medium enterprises in a deliberate and engaging manner. We are currently running an SME clinic series that supports entrepreneurs to develop their businesses.
As stated earlier, the social impact of our Agent Banking scheme is impressive. It has effectively widened the banking services net to capture the huge informal sector and its success is evident in the rate of adoption. The agents are equipped to facilitate customer transactions on an online real-time basis, and this provides a compelling value for all parties within the value chain. The customer has cheap, easy and convenient access to financial services. The agent enjoys additional revenue from commissions, incentives and increased demand for existing services. We are solving social welfare problems. FirstBank is positioned to deliver financial services beyond its traditional channels and in a cost-effective manner.
What is the retail banking strategy for the year ahead?
The retail banking strategy for the year ahead is to drive account opening and customer acquisition. The Bank will not relent in its financial inclusion mandate as we will keep onboarding agents thereby empowering them economically and rendering of financial services to the unbanked and underbanked. In addition, our drive to innovatively leverage technology and provide most seamless customer experience will continue. We are building business agility and collaborating with strategic partners where necessary.