• Tuesday, March 05, 2024
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BusinessDay

Nigerian Banks: A case for Real-time Data Acquisition

Real-time data is crucial to corporate planning, forecasting and strategic decision-making. Hence, it is clear why corporate customers in the country are demanding that banks provide reliable and accessible real-time data. Countries all over Africa – including Nigeria, Africa’s largest economy — are making every effort to increase their levels of regulatory compliance in an attempt to keep up with legislative and economic requirements.

According to a recent survey by KPMG on the Nigerian banking sector, “a number of the corporate respondents suggested that more banks should build capabilities to support integration between ERP platforms and banks’ proprietary e-payment solutions, thereby minimizing the need for manual intervention and ultimately reducing the risk of errors”.

Customer expectations are changing rapidly with the rise of digital channels, and the lower-time scale and near immediate availability of data for reporting that real-time enables offer banks a path to keep up with those expectations and ensure that data and systems can provide a single view of a customer across channels to aid understanding of what customers desire, how they want to interact with the bank and how to deliver the service.

Reforms in the Nigerian banking sector have been no different from global trends; the race to become Basel II compliant perhaps even Basel III has been all over the news in recent times. The objective of these reforms has been to improve both the financial strength and lending capacities as well as real-time banking activities. Turnaround time for request and enquiries accounts for one of the major reasons why Nigerians switch banks according a recent survey on the banking industry by KPMG.

According to the Head of Financial Services for SAP Africa, Darrel Orsmond, “By identifying and eliminating risks in advance through the use of real-time reporting, banks can satisfy the needs and demands of stakeholders thereby reducing risk and increasing regulatory compliance.”
SAP’s $500 million African Investment could be a game changer for Nigerian Banks. I believe it’s a massive opportunity for the banking sector to not only to create an entirely new business model, but also shift value proposition from products to services, and eventually use technology to make a real impact on banking services. Imagine a world in which customers actually have control over their money; connected directly to various payment mechanisms. A world where banks reclaim a direct bond with customers, a world where stakeholders in the payments sector stamp out inefficiencies in the payments space consequently reducing costs and protecting margins in the face of persistent change and regulation.

While the current payment infrastructure works well today, it was built during an age when paper reigned and in which the mass market Internet and Smartphones did not exist. Today however, the internet and Smartphones are a key part of our everyday life – Nigeria currently ranks number 8 globally in terms of internet usage and also arguably has the highest Smartphone penetration globally.

“We are facing a major turning point where we either embrace the cutting-edge or remain rooted in the past. Solid, forward-looking investment plans will not only dramatically strengthen Africa’s ICT landscape, but also its ability to compete on a global scale,”  said the Director, Insights and Vertical Industries, IDC Middle East, Africa and Turkey, IDC, Mark Walker.

As customer expectations shift and banks strive to provide better experiences, real-time payments could hold the promise to keeping customers happy. SAP Africa, in partnership with Ernst and Young, is committed to transforming the banking industry in Nigeria to take advantage of the big data analytics solution for real-time reporting and consequently provide customers with unprecedented capabilities to transact, move, store, process and analyse data in real-time. In replacing current complex card payment systems, real-time payments must be able to attain an extensive adoption to create a network effect that is well able to propel the new system forward, hence an evolution in the payments space and an improved support for cloud and mobile applications — all with nominal customer disruption.