Echoes from CIBN annual dinner in PH: Banks told to monitor costs to survive

...As ex-banker, Onwuliri, says order for Saturday bank work would trigger more costs to banks

Banks have been advised to monitor costs in the face of more regulatory interventions from the Central Bank of Nigeria (CBN) and other regulatory agencies as well as fallouts of technologies that cause disruptions to normal operations.

The advice came from an ex-banker and a Knight, A.N.C Onwuliri (PhD), who delivered keynote speech last weekend at the Autograph (event centre) on Abacha Road where the Rivers State chapter of the Chartered Institute of Bankers of Nigeria (CIBN) held its annual dinner.

Identifying both fixed and variable costs that stare banks in the face, Onwuliri pointed to the announcement by the CBN that new bank cards would be issued in 2023.

He said banks are now jittery over the announcement because millions of cards are lodged in their vaults. “Will they be useful in the new era or must be changed?”

He also mentioned the order that banks should resume weekend services in the face of Naira redesign. He said bank workers have to come to work on Saturdays to fast track the recall and reissue of naira notes.

Onwuliri said this would balloon the costs banks bear.

The other factor he mentioned is technological disruptions that he said have become frequent. He however, warned that; “Any bank that does not embrace fintech will crash or merge. A new culture of technology-first has arrived.”

Technology, he warned, has opened the underbelly of banks for risks, requiring closer monitoring and higher risks. “Technology pushes competition higher and this pushes management harder.”

Read also: New Naira: banks begin extension of operating hours to 6pm

He deposed thus: “Banking is a risky business, and technology has come to make it riskier.”

He thus advised banks to review corporate governance procedures. “If not, your bank will beg for acquisition.”

In what the ex-banker termed ‘Sharing my Thoughts’, Onwuliri made it clear that tech-driven disruption is everywhere. He however counseled thus, “We must align with technological intrusions and use them as stepping stones.”

He said technology is rapid worldwide and that banking industry has gone through many phases. He described the manual era as the period when bank workers saw hell working with only ledgers that were numbered from one to over 20. “Queues were very long. Next was when IBM adding machines came in but the relief was small. Now, it is Fintech era which has brought fast changes, good and bad. Tech has also boosted fraud.”

He said innovations such as banking from home have dawned on Nigerians. “Technology is now the key driver of rapid changes in the banking industry. Customers now become hungrier for more.

“Banks either partner with fintechs or develop theirs. New techs lead to new rules issued by the CBN. Other things from technology have emerged, such as blockchain, AI, and digital identification.”

He pointed out the main concern of the CBN being to protect customers, saying banks must comply or face sanctions.

The major issue he pointed out was that more regulations lead to new costs on banks, but stakeholders still maintain their expectations.

He said these disruptions and higher costs call for innovations on the part of the banks to reduce costs.

In his goodwill message, the national president of CIBN, Kenneth Opara, who was represented due to flight disruptions by Evi Kanu, Fidelity Bank’s regional head, called on bank to re-configure operations in the face of fintech upsurge.

He said the CIBN has always supported growth of the economy, and pointed at linkage programme with universities to help to adjust the university syllabus and help to close the gap and produce graduates fit for the industry.

“This has led the CIBN to open centres in six universities with the Rivers State University (RSU) the last of them.”

In his welcome remarks, the Rivers State branch chairman of CIBN, Nkwachukwu Njoku, said banking and finance remain a central issue in the economic life of any nation and the CIBN has indeed come of age in this domain.

He said the annual dinner is an event for bankers, allied professionals, and their publics to interact and discuss topical banking related issues that would have positive impact on the industry.

In her treatise, a non-executive director in Wema Bank, Ibiye Ekong, tried to situate the banking industry within Nigeria’s economic realities such as declining oil output, foreign exchange scarcity, and spiraling inflation. “Despite these, there market opportunities for banks.”

She concluded that technology or fintech is not an enemy, and gave the bankers some tips on how to turn it to a blessing.

A panel of discussants made up by the NDIC Zonal Controller, Celestine Okafor, and a lecturer from Okoh Polytechnic, Chioma Achaka, tried to calm the nerves of the bankers.

Okafor said the regulators want innovation in orderly manner, saying disruption should be positive and must be customer-centric.

Achaka said tech is to improve things, but that it is no more business as usual.

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