Delivering competitiveness is what CSNC brings to the table, says Mbama

Ethelbert Chinagorom Mbama is the MD/CEO, Circuit Systems Network Communications (CSNC) Limited, that is primarily involved in the delivery of IT services and solutions. The Cisco Certified Network Associate and member, Institute of Directors (IoD) in this interview with DON OKERE explains how most of their solutions are centered on solutions that will help financial industries achieve compliance with the regulatory authorities.

Tell us about Circuit Systems and Networks Communications Limited

Circuit Systems and Networks Communication Limited (CSNC) is an innovative ICT solution company, with core competencies in information technology, consulting, value added solutions, custom software development, system integration and implementation, with focus to service primarily the financial sector and the public sector in Nigeria. CSNC is a dynamic and progressive company with a clear objective to provide our clients with innovative and cost effective business solutions through the efficient deployment and integration of information technology.

The company started operations in April 2011, and presently has delivered large enterprise projects in many banks. Our business model and operational strategy are what propel our growth. Our key objective is to provide organisations enterprise-wide, business process visibility & technology optimisation by utilising our proprietary methodologies and quickly identifying the critical core business process, constraints inhibiting revenue and earnings growth and to assist our customers to better understand if their business process initiatives are providing measurable and sustainable improvement results. Delivering competitiveness is what Circuit Systems Networks Communication Limited brings to the table when it takes on any assignment. Its vast repertoire of competencies begin from strategy consulting, that factors in the client’s current and future competitive scenario, and then goes on to tailor IT solutions and services that meets today’s as well as tomorrow’s business needs. Enviable lists of loyal clients, who have regularly sought our services, are living proof of the CSNC edge. It is their testimonials and our growing list of competencies that is helping to enlarge the list of clients every day.

You won Beacon of ICT award as the Entrepreneur of the Year for 2013 and 2014 and CSNC won IT Service Provider of the Year. What values do these awards bring to your company and customers?

One of the key lessons I learnt when I got the news that we won these awards was that no matter what you do, someone, somewhere is watching or monitoring you. We never solicited for nominations, we saw the nomination list and we became proud that somewhere, an institution has recognised our effort and what we do. So I can say it’s all about hard work and consistent belief in our models. Also, I believe its references from our customers. The awards have spurred us on, it has made us to believe that we cannot fail right now; we must take this higher as we are in the eyes of the market right now. We have to live up to what the award stipulated, which is, best service and consistent customer happiness. We have remodeled our strategy since then and it has helped us grow further into many areas. Competency and skill acquisition has doubled. We are now afraid to fail.

From our findings, your company seems to be focused mostly on bespoke solutions, could you help share with us what your company does and your strategy for now and the future?

Before we started, we were aware that there are many ICT companies in Nigeria offering various solutions. We needed to break into the market and build customer confidence. That strategy was our major breakthrough and the reason we focused mostly on bespoke solutions. We started with IFRS. Then only one company was offering it and it is a specialised solution. It requires deep understanding of accounting and banking industry for one to deliver this. We took up the challenge. Here the players were few. The success we recorded spurred us to go into more bespoke solutions where we can carve a niche for ourselves and be specialists in it. We moved into loan management system, then Basel II and today, we cover a circle which includes IFRS, Operational Risk, Basel II and Loan Management by delivering the consultancy, software, implementation and training. Interestingly, these solutions are interwoven as they share common data. We have other solutions like Data Warehouse, Human Resources Management System, Business Process Automation etc. We are evaluating some other specialised systems which will be launched in the market soon.

Our strategy is to continue to build competence in our chosen solutions, become the best consultant and service provider in that space and focus on ensuring that we consistently share the knowledge with our customers. This is achieved through organising specialised trainings focused on solutions and the system.

Briefly what’s your company’s position in the Nigerian IT space?

In CSNC Limited, we are focused mainly on software solutioning, implementations/support services, and ICT training for the banking industry as priority and extending to other industries especially the public sector and SMEs.

Meanwhile, our solution is not just ‘jack of all trade and master of none’. We try to take things step by step, because we have a model we are following. Most of our solutions are centered on solutions that will help financial industries achieve compliance with the regulatory authorities. We try to ensure our solutions are somehow interwoven. Presently, we have the following as flagship, in the financial industry, IFRS, Basel II, operational risk, credit (loan) management, data warehousing which encompasses business intelligence as well as performance management, budgeting and forecasting and Human Resources Management System (HRMS). All of them were combined under a business decision support system and internal operational system, which we work with global solution vendors to deliver to our clients.

We made this approach or choice because of the nature of businesses in the industry and Nigeria at large. Critical to every bank is effective service delivery, efficiency and ease of operation (business automation), and reduction in operational costs. To achieve that, they need to automate certain processes that are ab nitio manual, and comply with global standards.

The good thing about us is our understanding of the banking business, environment and the major challenges in banks during system implementation which is mostly around data quality, knowledge gaps and understanding of the expectations, and we bring to bear, a specialised bridge to allow us to handle these challenges and expectations. We have crisscrossed a lot of banks; we have about 13 banks running on our different solutions. We control the market share in the FIRS solution; our loan system which entered the market two years ago has already taken over the market, replacing other default loan systems. Our Basel II is about to be implemented in two banks in Nigeria, the first ever to implement it. We have worked and integrated with all the banking applications and source system you can see in any environment in Nigeria, thus, our understanding and knowledge of banking environment is second to none. It’s diverse and specialised.

Our model in delivering the solutions is second to none. Because of the experiences we have had during the FIRS solution implementations and services we discovered that some of these new standards are alien to us. Therefore, some customers, even some consultants, do not really understand exactly what it entails to deliver these things in their environment. We had issues around data qualities, knowledge gap, human resource, etc. This made us to decide that the first step to deliver is to arrange full-blown training. Example, in Basel II we will set up a training location, far from the customers office, with the bank staff, and train them on understanding what Basel II/III is, details around framework design and modeling in Basel II/III. This same approach is being used if we are dealing with Operational Risk, IFRS etc.

We come with already made templates and fine-tune them to what the banks want and what is obtainable in the country. By the time we are done, the participants understand the intricacies of the solution. Although, they may not have 100% perfect, but they would have been equipped to understand how to solve certain challenges. During the training, we do the detailed scoping; define the requirements, so that everybody understands what the project and the system will achieve. If they were able to provide us with details, we can develop the models that will work. Training will be a continuous process, from time to time; we organise training to keep improving on that.

You recently partnered with Fidelity Bank to deliver Basel II/III, to you what challenge does it solve for banks?

To answer the question, though I am not a risk expert, it’s important to understand what Basel II/III is and why it was introduced. Basel II/III is a set of international banking regulations developed by the Bank for International Settlements in order to promote stability in the international financial system. The purpose of Basel III is to reduce the ability of banks to damage the economy by taking on excess risk. Basel III is not a panacea, and will not single-handedly restore stability to the financial system and prevent future financial crisis. However, in combination with other measures like IFRS, Credit Management System, etc, these regulations are likely to help produce a more stable financial system. In turn, greater financial stability will help produce steady economic growth, with less risk for crisis fueled recessions such as that experienced following the global financial crisis of 2008-2009.

While banking regulations may help reduce the possibility of future financial crisis, it may also restrain future economic growth. This is because bank lending and the provision of credit are among the primary drivers of economic activity in the modern economy. Therefore, any regulations designed to restrain the provision of credit are likely to hinder economic growth, at least to some degree. Nevertheless, following the events of the financial crisis, many regulators, financial market participants and ordinary individuals are willing to accept slightly slower economic growth for the possibility of greater stability and a decreased likelihood of a repeat of the events of 2008 and 2009. There tend to be a common set of features that seem to repeat themselves in various combinations from banking crisis to banking crisis.

The objective of the Basel III reforms is to reduce the probability and severity of future crisis. This will involve some costs arising from stronger regulatory capital and liquidity requirements and more intense and intrusive supervision. It is widely accepted that prudent fiscal and monetary policies are the cornerstones of financial stability and sustainable economic growth which Basel II/III will provide and ensure to banks. It is difficult to imagine a country that can maintain sustainable growth on the foundation of a weak banking system.

In CSNC, we position Basel II/III because, in recent additions which formed Basel III, it is more comprehensive in its scope and it combines micro- and macro-prudential reforms.

In a nutshell, it is equivalent to IFRS and banks will leverage on it to ensure that during crisis, they have a buffer to rely on. Basel II/III deals with credit system. The problem in the sector has been how to manage the credit point-trying to give loans and manage or calculate the risks around it-overdraft, among others. So, there is also a global standard on how those things are done. The models have been done and acceptable globally.

However, it is important to note that if it works in other places, does not mean it is a perfect fit for you. That is the essence why you look at your internal credit model and see how you can fine-tune it to fit into Basel II modeling based on the standard your central bank developed. In a nutshell, it gives you global window on how to manage credit. Organisations are scored based on certain parameters that they used in designing their system so that any given time it can accord you close picture of somebody you are about to deal with.

CBN has severally directed banks to implement BASEL II and it has not worked, what are the challenges in the implementation?

One of the critical challenges we face in the banks or any organisation as a consultant is managing change and trust. People are not eager to hands-off what they traditionally do; they don’t believe that many IT vendors are more or less consultants and service providers. Secondly, in most banks, understanding BASEL II/III and associated value it brings is a challenge. They tend to rely 100% on foreign or big consulting companies while their internal risk and IT team lack the deep knowledge required in delivering and managing it.

When regulatory bodies pencil down policies, we expect that there should be consistent workshop for the members of the industry. The workshops should be organised to explain to them what these policies are intended for, why it has to come, the value it will create and how they will benefit. That is where we expect the consultants to come in also. There are issues the workshop must address as well: the implementation guidelines, how ready are they, what it will cost us to deliver. It is when you are sure that the industry is up to 90% ready for the implementation that you can go ahead to issue implementation deadline.

Outside some few, many do not understand what we are discussing. Nobody understands the value or the processes of deployment. As far as they care, the credit system they currently use can do it. That is the reason we are coming in through a different approach. We are planning to do a comprehensive workshop for CIOs and CROs in all the banks, in conjunction with risk experts, for them to understand how they can prepare for this, what needs to be done, understand how the modeling and framework is done and designed. That will spur them to understand why you must not wait till CBN tells you to implement before you commence. It is a way to improve your operations.

What nature of support do you give your clients?

Most of our partnership agreement is on exclusive level. This informs why we continuously invest heavily in skills and technical knowhow around our solutions and the concepts. My team must understand what IFRS, Basel II/III, Operational Risk, Loan Management system etc are, how they apply to banks before they start delivering the technical part, they must understand how Basel II/III is designed and what it is, same way for Loan Management, HR System Data Warehouse, etc.

We also engage experts on long term partnership on support and deliver. It’s an ongoing process. Quarterly training is offered to my technical team by the partners, because a skilled team ensures customer happiness and more business. In this territory, we have proven this. Some of our clients have one or two technical resources permanently in their environment and at 24 hrs 7×7 availability for any kind of support, and we escalate to our vendor partners for such support that is beyond us. The training we give to our technical team is focused on first and second level support, what it entails and all the details involved. Our target is to take full control of whatever we position and implement for our clients without much recourse to our vendor partners.

Do you train your clients to manage issues to certain level before your specialists’ interventions?

To be honest, I wouldn’t want my clients to be coming to me. It is better for them to be competent enough to handle certain issues. Imagine if we have 50 clients, can a workforce of 25 deliver support to them satisfactorily. We try to encourage our clients to know the intricacies of the work. It is only when the technicalities become cumbersome for them that we intervene.

This is one of the major reasons we designed our new implementation methodology, where we must do a detailed hands on training on the subject matter and our solution, two weeks intensive training outside the customers site. We developed this out of our experience in IFRS projects. Our Basel II/III projects must come with two weeks hands on training on framework designs, modeling, ICAAP etc as I mentioned above. It is comprehensive.

We also encourage customers to make quarterly or half year investment in training. We offer customised training to their team which allows them to understand everything, take full control and reduce cost of support for them. One of our clients came with a list of challenges or identified knowledge gaps, after using our system over a period of time, we organised a customised or special training based on that and today, they have better understanding in addressing their issues than before.