The Central Bank of Nigeria (CBN) in December 2018 announced its plan to launch a National Microfinance Bank (MFB) in collaboration with the Bankers’ Committee and the 774 local Nigerian Postal Services offices.
The presence of new countrywide MFB and recent mergers between existing banks are steadily increasing competition for Nigerian MFBs. To continue growing in their markets, MFBs are implementing new technology to deliver their services to more individuals in remote, hard-to-reach communities through agency banking and delivery channels.
With Oradian, the financial inclusion company delivering a specially designed core banking system through a Software-as-a-Service (SaaS) model in Nigeria, leading technology becomes affordable and accessible for not only commercial banks but microfinance banks and financial inclusion-focused institutions.
With a SaaS model, MFBs in Nigeria are accessing global best practice through an affordable annual subscription or ‘pay-as-you-go’ payment model. Rather than making heavy upfront capital investments on on-premise hardware and purchasing software, financial institutions pay an annual subscription to access the software that they need.
“The market in Nigeria is evolving and the financial services that individual clients expect from their financial institutions are changing. For MFBs to meet the needs of their clients better, they must be flexible and able to quickly get ahead of these changes. Flexible, cloud-based core banking systems are enabling MFBs to meet their clients’ demands and future-proof their businesses,” Julian Oehrlein, co-founder and head of product for Oradian, said.
As part of the CBN’s national strategy to reach 80 percent financial inclusion by 2020, the Shared Agent Network Expansion Facility (SANEF) is setting out to improve access to financial services by increasing the number of access points from 50,000 to 500,000. The introduction of an agent network and alternative delivery channels will enable MFBs across Nigeria to deliver financial services to more individuals in the country more effectively and efficiently.
To quickly roll out delivery channels and build a network of agents, MFBs are looking to implement flexible cloud-based core banking systems that enable them to integrate their core business operations with delivery channels and agents.
Delivery channels offer a way for financial institutions to deliver services to their clients. A delivery channel can be through an institution’s branches, through clients’ mobile phones, ATMs, internet or online portals, call or contact centres, among others.
Through agency banking, financial institutions provide financial services to clients through partnerships with other businesses which serve as transaction centres, called agents. These agents, collectively known as agency banking, allow financial institutions’ clients to access the institution’s products and services seamlessly and securely via third-party providers.
MFBs are innovating in Nigeria’s financial services sector by tapping into cloud-based technology, rather than on-premise IT systems that include investment heavy servers and data centres. Through cloud-based technology, MFBs can integrate their core banking system with delivery channels and agents through an open Application Programming Interface (API), a technical intermediary that enables two applications or software programmes to communicate and function as one. This enables MFBs to be more competitive in their markets and build their client base.
In addition to streamlined integration, cloud-based core banking systems are enabling MFBs to digitise their operations, become more efficient and make informed decisions with real-time data and real-time reporting, consolidated from all their branches.
Oradian has established strategic partnerships that include working with the Nigeria Inter-Bank Settlement System (NIBSS) and 3Line.
Through strategic partnerships, financial institutions can access strategies which offer a multi-channel approach to serving customers through an integrated and cohesive customer experience.
“We are committed to continue solving the challenge of financial inclusion in Nigeria, which is why we started Oradian in 2012. We have built global best practice into our core banking systems and we are partnering with leading technology providers to equip MFBs with the technology they need to serve more Nigerian individuals who need access to financial services,” said Onyeka Adibeli, Oradian’s co-founder and programme director, Africa.
3Line works with leading MFBs in Nigeria to create a network of agents that are improving access to financial services. Since July 2017, a partnership with 3Line has seen First City Monument Bank (FCMB) open a total of 142 agency banking locations.
Oradian partners with technology providers to integrate its cloud-based core banking system, Instafin, with leading fintech solutions, making Instafin a robust, all-in-one system for its community of visionary financial institutions. Oradian partners with providers who share global best practices, an agile development approach and international security standards.
Oradian is a financial inclusion company serving financial institutions in remote, hard-to-reach communities. Using insights from its community of customers, Oradian builds a cloud-based toolset that smart financial institutions plug into to access best practice and efficiency.
Its global community is made up of over 75 financial institutions in 11 countries with a concentration in the Philippines and Nigeria. Collectively, Oradian’s community of financial institutions provides access to financial services for over 3 million end-clients.
ENDURANCE OKAFOR
