Without embracing new models, banks will die as customers move – Dixon
CORNEL DIXON is head of Africa, Backbase, a company that helps banks in emerging markets to digitalize their operations. The firm has identified Nigeria as one of its key markets for expansion. In this online interview, he tells Daniel Obi the company’s ambitions for Africa and Nigeria. Excerpts:
Backbase just started its African journey, why at this time and what is driving the move?
BankWe are a global company and we have been focused on getting the best engagement banking platform that can be white labelled to 80 percent of banks around the world. We had to learn more about the type of customers in Africa as there are use cases which we don’t see that often in Europe which have huge value for Africans i.e. airtime top up, electricity payments etc.Internally we were scaling the team to support the growth in Africa and now we are in a good place to help with executing across the continent. Our team is fully focused and dedicated to serving the continent with strong background in banking and telco operations on the continent
Would you attribute your late entry into Africa to the reticent disposition of traditional African banks in embarking on digitalisation of their operations?
Bank customers have been digital for a long time and banks have had to play catch up, it’s true. Look at the push from MNOs and other mobile money operators. Customers vote with their wallet where there is a better service. Most banks have understood the need to be digital however they have had to focus on other priorities. Many regulators have had to modernise their legal frameworks. A bank can have an end-to-end digital onboarding process however if the regulations are not ready for it, they won’t take the risk. I wouldn’t’t say the entry is late. I think the entry is at the right time. Executives know what needs to be done. Regulators are on the modernisation journey. Customers want an engaging experience and service: whether an individual running a pop up store or an African multinational.
Why do you think some African banks have a drawback attitude to digitalisation and what is the cost/implication of the lethargy by banks to fully embrace digitalisation?
Where there is little clarity or understanding, there is risk. Many banks did not understand the cost of not being digital. COVID-19 exposed this. Banks have existed for hundreds of years, however the acceleration in innovation of the last 20 years is more than what the industry has seen over 200 years. By not embracing new models, the business will die as customers move. ‘Innovate or die’ to quote Peter Drucker.
Do you think Covid-19 pandemic has made it more necessary for digitalisation of operations more than ever before?
The pandemic has accelerated the use of digital and the need for better digital banking platforms to keep the customer engaged. A key factor to warding off the Covid-19 fallout was whether banks managed to implement a move to digital banking. This rapid digital transformation is therefore of critical importance for banks across the continent going forward. Changing consumer habits and rapid technology adoption from a growing middle-class in Africa is influencing the way banks adopt a new digital-first strategy. Banks will need to deploy a new engagement-led platform to better serve their clients and meet the new online needs and demands. Moreover, banks will have to ensure a client-centric approach to remain relevant in an ever competitive landscape, where telcos, fintechs and other players are also entering the market.
Backbase is advertised as an omnichannel state-of-the-art digital banking software solution capable of unifying data and functionality from core banking systems and fintechs into a seamless digital customer experience across any channel. What does this mean?
Our Engagement Banking Platform (EBP) powers all lines of business, including Retail, SME & Corporate and Wealth Management on one user-first platform. From digital sales to everyday banking, the platform’s entire design focuses on a seamless and captivating experience for both customers and employees. The EBP complements legacy systems with a comprehensive digital engagement solution so banks can innovate, operate and engage with their customers. We give banks the speed and flexibility to orchestrate seamless customer and employee experiences across any device and deliver measurable business results.
Backbase has worked with and impacted global giants like Deutsche Bank, Metro Bank, Standard Bank and HSBC. What assistance would you look to provide for Nigerian banks and how would that help their operations and customers?
As a starting point, we provide the innovation built on the platform to customers all across the globe, including in Africa. This means that as we keep an eye on the market, if we see something innovative, customer friendly and that can make banks revenue; we add it to the platform. A small but key example is that of rounding up spending. This helps customers save and increases stickiness for the bank. Win, win. Working with Backbase is not just about using great technology, it’s also about leaning into the knowledge we have gained across hundreds of projects around the globe. If we tell you it won’t work, it’s not a guess. It’s because we’ve either tried it ourselves or seen a customer try it. Together this means, we can comfortably bring a bank to market not just quickly but safely. And with an experience to be proud of.
The common challenge in digitalisation of operation is security as cyber-crime appears to be on the rise. What is your comment on this issue and how safe are banking operations?
We take security very seriously at Backbase and this is because apart from protecting the customer with our security mechanisms like transaction signing or biometrics, it’s also about protecting the business. For many banks, we manage the operations end-to-end which means that we are ultimately responsible for ensuring that the system is up, running and secure. The biggest security risk is the person and this means that the best way to fight it is through education and through making the system simple at the point of use. If people aren’t aware of the dangers of phishing attacks, they can fall prey to scammers .If a system or experience is too complex, people will make mistakes. Overall people are getting savvier about the dangers of cyber crime and the digital natives who have grown up with the internet tend to fall victim to financial fraud less often. Although they are affected by other types of cyber crime more often.
Banks and FIs can reduce time to innovation by adopting these journeys to bring omni-channel banking experiences right into the hands of the customer
There is a focus on SMEs in your Engagement Banking Platform, a sector of Nigerian industry that is under supported, how can Backbase provide tailored support to Nigerian SMEs?
Banks have typically shied away from SMEs as they were too small and risky to serve at scale. Especially with traditional, face-to-face methods. Therefore focus has been on corporate institutional banking which has been high touch service. SME is also a broad segment as it touches the sole proprietor to the company employing 10s of people and potentially bringing in hundreds of thousands of dollars. Backbase for SME Banks helps Financial Institutions (FIs) provide best-in-class banking experiences to customers and employees through our turn-key SME Banking apps that can be quickly adopted and that can cover these different sub-segments in SME. Built on our Engagement Banking Platform, the apps have an exhaustive set of banking features that are quick to deploy while also allowing for the flexibility of catering to business priorities via theming and configuration options.
As a part of the turn-key SME Banking Apps, Backbase provides out-of-the-box customer journeys that can be used for various kinds of banking products or services. These journeys are specifically built to provide and support the banking capabilities that customers expect.
Banks and FIs can reduce time to innovation by adopting these journeys to bring omni-channel banking experiences right into the hands of the customer. These journeys can be as diverse as logging in to make a payment to applying for a business loan.
You have a mission to serve 10 percent of all smartphone users worldwide with a Backbase powered finance app, what is the date on this goal and what part do you expect Africa to play in this expansion?
We’re well on our way. It’s no secret that Africa has a young and growing population. As barriers access to information, technology and data drop, they will have a stronger global voice. We expect Africa to be a corner stone of our growth and we are proud to serve her people.
Backbase appears to be a forward thinking and inclusive company, how would you say that influences your overall output?
An organisation is only as good as its people. We have fantastic people from all walks of life with experience in banking, telecommunications, design, law, technology. You name it. In the Backbase Africa team, we have just under 20 countries represented and our local leadership is over 50 percent African. This means we can marry a global view with a local understanding. This is very special.Ideas come easy with this diversity and it means we can be agile and innovate our approach with ease.
Backbase appears to have a head-start on most businesses by encouraging remote working opportunities that are uncommon in finance. Why have you championed this initiative and how much do you think it will impact your expansion?
As I said before, it’s all about people. We hire people who work well in a team and that means a good level of trust. We trust that people will make a choice that is good for them and for the team about where to work. If collaboration is required, some teams prefer to meet face-to-face whereas others are happy to meet online. Quite often we see people coming to the office to get some peace and quiet! Overall, our approach means that we can quickly scale and go to where the talent is.
Tell me more about Backbase and the opportunities in Nigeria/ Africa?
We have big ambitions for Africa and Nigeria as we see that many of our competitors have been providing sub-standard solutions in sub-Saharan Africa. We are committed to the region and we are beginning with our first hires on the continent, including in Nigeria. We also recognise that affordability is crucial for banks as they scale operations. Therefore, we are bringing a new commercial model to market to ensure that Backbase can be used by all, not just the big banks.