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Interviews

FirstBank CEO on Digitisation, Customer Relations and the Impact of Effective CSR Initiatives

FirstBank CEO on Digitisation, Customer Relations and the Impact of Effective CSR Initiatives 1

FirstBank of Nigeria Limited is a multinational bank and financial services company based in Lagos, Nigeria. It boasts an extraordinary 128-year history and is the region’s foremost financial inclusion services provider, having won multiple Global Banking & Finance Awards including ‘Best CSR Bank Western Africa’ and ‘Best Corporate Bank Western Africa’ this year.

Wanda Rich, editor of Global Banking & Finance Review, recently interviewed CEO and Managing Director of FirstBank of Nigeria, Dr Adesola Adeduntan, to find out more about how a bank of such esteem and award-winning success maintains its position as a pacesetting powerhouse.

Wanda initially asked his opinion on the most prominent challenges facing the African banking industry today. “They include, but are not limited to, inadequate banking infrastructure, shallow financial depth and low banking penetration, low financial literacy levels amongst the citizenry, prevalence of cash-based transactions, prevalence of illiquid, short-dated and costly domestic fund markets, and an onerous regulatory environment,” he replied. “It should however be noted that the severity or prevalence of each of these challenges varies from country/market to country/market. The more developed African banking markets like South Africa, Nigeria, Kenya and Morocco have less of these challenges.”

Part of FirstBank’s vision is to be Africa’s ‘Bank of First Choice,’ and it positions itself at the forefront of the growth and progress of the African banking industry. As Dr Adeduntan explained, FirstBank is significantly driving the industry’s financial inclusion and banking penetration rate through its unique agent banking proposition in Nigeria, Ghana, Democratic Republic of Congo, Guinea, Senegal, Gambia and Sierra Leone. “As of August 2022, FirstBank has over 186,000 banking agents covering 772 out of the 774 local governments in Nigeria,” he reported. “The agent banking proposition is helping to improve access to financial services for the individuals and citizens at the base of the pyramid, as well as providing gainful employment in the localities where these agents operate, thus lowering the unemployment rate.

“In addition, FirstBank has been collaborating with regulators and key industry stakeholders to transform and improve the overall banking industry infrastructure in Nigeria and other African markets. FirstBank has also pioneered several innovative banking industry infrastructure initiatives in Nigeria. Our corporate social responsibility initiatives are deliberately aimed at improving the financial awareness and literacy levels of citizens in the markets and communities where the bank operates.”

Another area in which FirstBank strives to lead the way is leveraging digital channels to deliver improved services to its customers. “FirstBank has a robust portfolio of innovative digital channels that address the everyday banking transaction needs of both wholesale and retail customers,” Dr Adeduntan said. “This is evident in the commendable digital channels’ user base, transaction intensity and digital revenue. We have over 19 million users on the bank’s digital channels – the FirstMobile, FirstOnline and USSD platforms. Our customers completed more than 2.1 billion transactions worth over NGN39 trillion via digital banking channels in 2021. Our digital channel revenue grew by 15.8% between 2020 and 2021 to NGN56.8 billion, driven mainly by increased adoption and higher transaction intensity.

“Additionally, the bank’s digital channels have improved the customer experience and brand perception for the bank by extending and increasing customer access points to the bank’s suite of products and services.”

For clients looking to manage risk and enhance their revenue, FirstBank’s corporate banking division serves the bank’s largest clients in each of the main industries of the economy: energy (oil, gas and power), mining, services, conglomerates, manufacturing, telecommunications, infrastructure, agriculture and more. Dr Adeduntan explained that this division provides a broad range of banking and financial services which includes project finance, trade and corporate finance, term loans, foreign exchange and treasury services, cash management services, guarantees, collection and payment solutions, among others.

“The bank’s corporate banking division’s go-to-market strategy is anchored in its vision to be a ‘trusted advisor’ to clients,” he expounded. “Beyond deploying a robust balance sheet to meet the specific financing needs of the bank’s clients, the corporate banking division offers advisory services on various debt solutions and risk management strategies that help clients minimise their risks and optimise returns.”

He also reported an increase in demand for credit from corporates in line with the economic recovery of recent times. “Economic activities across Africa’s major economies have rebounded following the dip occasioned by the COVID-19 pandemic. In Nigeria, the economy exited the pandemic-induced recession in February 2021 and the same is the case for most other African countries. The increased level of economic activity has naturally spurred the demand for more credit to support the expansion initiatives of various corporate customers.”

He disclosed that in line with the general increase in the overall industry demand for credit from corporate customers, FirstBank’s corporate banking division’s loan book grew by about 25% between June 2021 and June 2022. “Such robust growth is a testament to FirstBank’s strong commitment to supporting customer growth and profitability objectives.”

Discussion turned to product development, and Dr Adeduntan emphasised that FirstBank is deliberate and proactive in the development of tailored products to meet the everyday needs of its wholesale and retail customers. “The specific factors that drive FirstBank’s product development process are anticipated changes in key customer segments, sectors, and industries; customers’ feedback; technological advancements; regulatory changes; outcomes of key stakeholder engagements; competitive trends in the industry; process improvement opportunities, and anticipated opportunities within the relevant ecosystem.”

As an institution with a rich legacy, FirstBank’s proactive approach to understanding customers’ needs and providing innovative products that meet them has allowed it to remain dominant, Dr Adeduntan stated. “FirstBank has developed key innovative products in response to corporate customers’ needs in the context of the current business and economic environment, including bespoke treasury products – FX swaps and non-deliverable forwards – and other structured trade and debt solutions. We have also deployed an innovative and robust transaction banking platform, FirstDirect. This platform has strong transaction banking capabilities in key areas including payments, collections and receivables, the B2B marketplace, liquidity management, supply chain finance and trade management.

“As a forward-thinking institution, the bank is also building strong data analytics capabilities that will provide valuable insights from both internal and industry sources to better serve our corporate customers.”

Making financial services as accessible as possible is a crucial component of modern banking. Dr Adeduntan outlined FirstBank’s          array of financial services and products for both retail and wholesale customers that leverage innovative technologies to improve their access. “We are helping to deliver improved access to financial services in three broad ways. First, expansive physical touchpoints. FirstBank remains at the forefront of improving financial penetration in Nigeria, with over 750 business offices and 186,000 agent locations across the country. The bank has been deliberate and strategic in improving access to financial services, and this has enabled us to record tremendous success, primarily through FirstMonie, the agent banking proposition. Today, FirstBank’s agent banking network is undisputedly the leading bank-led network in Nigeria. As stated earlier, the FirstMonie agent network operates in 772 of the 774 local government areas in Nigeria with over 186,000 agents, more than 50,000 of whom are female. Over 50% of FirstMonie’s agents are in rural areas, contributing significantly to providing financial services to people in remote locations who had been hitherto deprived of access to such services.

“Second is innovative digital channels,” he continued. “FirstBank remains one of the most innovative banks in Nigeria. This is evident in the various digital capabilities and touchpoints that the bank has deployed to improve access to financial services and products. The bank leverages technology to deliver exceptional digital touchpoints to both tech-savvy and non-tech-savvy individuals.

“With growing mobile phone and internet penetration in the African market, FirstBank deployed mobile platforms (FirstMobile, LIT app), USSD (*894#) and an online platform (FirstOnline) that allow customers easy and improved access to financial services. These platforms remain as leading digital touchpoints in Nigeria with over 19 million users. FirstBank has one of the highest numbers of ATM touchpoints in the country – over 3,000 – which allows customers to carry out transactions without visiting the banking hall.

“Third is our extensive financial service offering,” Dr Adeduntan went on. “FirstBank offers products and services that address the financial services needs of all customer segments. The range of products and services offerings cover key business segments including corporate, commercial, SMEs and MSMEs, and individual segments including HNI, affluent, mid-affluent, mass affluent, and base of the pyramid/mass market.

“Specifically, for the unbanked and underserved individual segments, the bank has designed products and services to address their lending and deposit or transaction needs, including digital nano loans (FirstCredit), and no-frills savings and transaction accounts (FirstInstant).”

FirstBank has made great efforts to keep customer relations at the core of its banking operations. Dr Adeduntan discussed why this remains a priority and how the bank continues to strengthen these relations. “In line with FirstBank’s #YouFirst mantra, customers are at the heart of every business decision and action of the bank,” he revealed. “FirstBank remains one of the dominant banks in the African banking industry with a customer account base of over 38 million, and a balance sheet size of over NGN8.8 trillion. An excellent customer experience has been one of our competitive advantages.”

He elaborated on this point, underlining FirstBank’s appreciation of the importance of customers and the role they play. “Without customers, there is no business. At FirstBank, customer relationship management is not just about existing customers; it is also about potential customers. One of the bank’s core objectives is to drive customer acquisition and retention by strengthening existing relationships and establishing new ones through a positive customer experience. In this regard, FirstBank leverages innovative technologies to drive improved customer experience, patronage and retention. Any sustainable banking business must be built on a trust-based relationship. At FirstBank, integrity and respect for customer privacy and confidentiality are among the top priorities.”

Another high priority of FirstBank that he highlighted to Wanda was its commitment to supporting social economic development in Africa. “Financial institutions are expected to play significant roles in the pursuit of social economic development in Africa. In every economy, they are key in determining the efficiency and effectiveness of the resource allocation system. Through the financial intermediation role of mopping up savings from the surplus section of an economy and providing credit to the deficit section, financial institutions enable the overall economy to reach its optimal potential. They also provide individual and business customers with relevant financial products and services that drive overall economic development.”

In a similar vein, corporate social responsibility (CSR) is another area that has always been important to FirstBank, as he explained. “As a responsible corporate organisation, the bank has remained a dominant player, partnering and supporting various socio-economic development activities to promote the continued growth of our host communities, and Africa at large. FirstBank is committed to driving sustainable social, economic and environmental transformation. Our engagement in sustainable business practices is based on the bank’s commitment to economic development and stability for the present and future generations.”

In support of this commitment, he revealed, FirstBank has institutionalised several programmes to drive its CSR agenda. “The bank’s flagship socio-economic development initiatives include the Community Infrastructure Development programme; Education Endowment; FutureFirst, the financial literacy, entrepreneurship and careers programme; our e-learning programme; the SPARK (Start Performing Acts of Random Kindness) programme, and the Environmental Preservation programme.”

He went on to describe the significant impact that has been made through some of these initiatives. “FirstBank partnered with IBM and Lagos State Government on the e-learning initiative to provide students with access to the Digital-Nation Africa (DNA) programme, an online youth-focused learning programme that enables innovation and skills development on emerging technologies. Over 170,000 students and pupils have benefitted from this initiative.

“The FutureFirst programme, in partnership with Junior Achievement, has imparted knowledge of financial literacy and entrepreneurship to over one million people across the country. The bank also partnered with the Nigeria Conservation Foundation on the Green Recovery Nigeria Initiative to raise awareness of environmental issues in Nigeria and encourage sustainable practices in over 30 schools across the country.

“In 2021, the SPARK initiative positively impacted over 80,000 people including widows, students and people living with disabilities. Over 60 primary and secondary schools have benefited from this initiative. The impact of SPARK has spread across at least seven countries where FirstBank has a presence, including Ghana, DRC, Guinea, Sierra Lone, Gambia, Senegal and Nigeria, with partnerships extending to over 100 charities and NGOs including LEAP Africa, International Women’s Society, UNGC, UN Women and Junior Achievement Nigeria.

“Finally, FirstBank has built over 15 social and educational infrastructure projects in universities and schools across Nigeria.”

Dr Adeduntan concluded with an update on what is coming next for FirstBank. “We remain focused on pursuing our vision: to be Africa’s ‘Bank of First Choice.’ The bank is driving the actualisation of this vision by exploring growth opportunities in new business areas and additional high-impact African markets, accelerating enterprise digital banking capability deployment, enhancing customer experience, delivering business efficiencies, consolidating leadership in transactional capabilities, strengthening technology and innovation capabilities, and building a stronger balance sheet.”

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