MUDIAGA UMUKORO is the managing director and CEO of AppZone Core. In this interview with JOSEPHINE OKOJIE, he spoke about the role of microfinance banks in accelerating Nigeria’s financial inclusion target.
In 2021, you announced the relaunch of BankOne with the focus to serve Africa’s leading fintechs – Neo bank, and Challenger bank. Can you tell us how much impact you have made in this regard?
It has been very exciting since we created the focus and relaunched the platform with the fintech and Neobank target market in mind. Since then we have facilitated the launch of several digital-only Neobanks with a “Go-Live” schedule that was about a quarter of their prior estimate. Watching these banks deliver fantastic innovative products of our platform with prolific impacts in terms of active customers has been very inspiring to us.
How achievable do you think the CBN 2024 financial Inclusion target?
I believe everything anyone puts their mind to is achievable. The CBN targets growth in financial inclusion from 64percent in May 2022 to 95percent in 2024. This is achievable if all stakeholders work hard at the goal. The current proliferation of fintech products is certainly a good push in the right direction. The consolidation in the microfinance industry, which is attracting bigger players with better access to funding and technology, will also serve to be instrumental when looking back in hindsight, come 2024. The industry as a whole will need to work hard at banking infrastructure and security though. We must reduce fraud and service unreliability to encourage the underbanked.
Knowing that microfinance banks play a significant role in driving financial inclusion, how exactly are you fostering the growth and driving impact amongst MFBs across the continent?
Right from the get-go, we identified microfinance as the key to tackling the challenge of financial inclusion. That sub-sector knows the clientele more than anyone else. They are however challenged by limited access to proper funding and technology. Luckily the CBN has put measures in place to tackle the funding challenge. The Bankone platform on the other hand is designed to tackle the technology end. The platform is delivered in a Banking-as-a-Platform (BaaP) model which allows banks to outsource their entire infrastructure to us in a secure, affordable way. Financial institutions on our platform get the best of both worlds in secure reliable banking infrastructure, at a remarkable fraction of the regular cost.
As Africa is rapidly accelerating towards a fully digital banking future, we have also seen a spike in cyber theft, how does your organisation ensure that financial institutions and even customers are protected?
Cybersecurity in banking now has to be at the very least, as intrinsic to a bank’s operations as its day-to-day. Financial institutions must maintain best practices in policies, technology tools and procedures to combat this monster. There is no shortcutting this rule. Even the CBN is taking this seriously enough to release a cybersecurity standard that OFIs must comply with by January 2023. Most FIs understand this but the cost of being up to date with these standards is significant which ends up deterring them. Luckily our model of banking infrastructure delivery has a Security-as-a-Service component inherent in its delivery model. This shrinks the cost enormously for subscribing Institutions without compromising standards. In fact, by sharing the cost across all institutions on the Bankone platform, we can stay far ahead of lone FIs and attackers at large
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What sets BankOne’s technology apart from similar technologies both within and outside Africa?
There are several ways Bankone is unique. First, it is the only cloud-native Core Banking Application built from scratch in Africa and specifically fitted for African banking operations and use cases. Secondly, it is delivered in a Banking-as-a-Platform (BaaP) model-which is unique. This means we provide not only the core banking application, but all the other ancillary applications, services, and partnership integrations required for a bank to function in today’s digital world. The model allows subscribing Institutions to outsource 90 to 98 percent of their technology and engineering operations to us.
As a leading provider of technological functionalities that enables digital banks to engage customers and deliver services without human interaction, where do you see traditional banks in the next few years?
This is a very interesting question because we are positioned to support both sides of the debate. Every financial institution needs our technology. Digital banks have innovative technology but do not need to reinvent certain fundamental wheels within the banking tech stack, and so turn to us. Traditional banks on the other hand are coming from a background of outsourcing most of their technology to foreigners but this is changing due to the Neobank competition factor. They are now reaching out to service providers like us to outsource completely, which when considered in-depth, is a master stroke. Traditional Banks that successfully combine the depth of their banking experience with outsourcing their entire technology stack to competent vendors and collaborating with others, may very well become the most successful digital banks of the future. So, I guess the answer is Time will tell.
We know BankOne has operations across Nigeria, Ghana, Gambia, and Kenya, are there plans to scale to other parts of the continent and beyond?
Absolutely! The African continent has always been our target and most of our expansion into the listed countries has been reactive. Sequel to our 2021 fundraise though, we identified the problem we have solved in Nigeria as a continental one and have begun proactive expansion efforts to East Africa amongst other African regions and the feedback has been awesome. Interestingly, there are pending unsolicited requests from the Caribbean as well as the Middle East. So we are keeping our fingers crossed.
