Mr. Remi Babalola is the Executive Director, Lagos and West, First Bank of Nigeria Plc. He is also in charge of consumer banking, with the responsibility of ensuring that the bank deploys reliable, safe and cost-effective channels to deliver efficient electronic banking services to customers. In this interview with GODDY EGENE, Babalola speaks about how the bank has been pioneering e-payment services over the years and what it intends to do to remain a dominant player in the financial sector.
About one and half years after recon-
solidation, what is your assessment of the banking industry?
Dramatic changes have taken place after the consolidation. Almost all the banks that we have now are well capitalised, the structures and services are getting more embedded, the banks are getting safer, depositors are getting more secure and confident to transact business with the banks.
In specific terms, what would you say that First Bank has gained from the reconsolidation exercise?
First Bank acquired two banks, namely the MBC International Bank and FBN (Merchant) Bankers Limited. But most importantly, the reconsolidation actually fits into the corporate strategy of the bank. The bank had in 2002 originally set out to grow organically and inorganically. As a result, the reconsolidation fitted into our corporate plans and focus.
Among the objectives of the reconsolidation exercise was to draw more N450bn into the banking industry. What is First Bank doing in this regard?
One of the major benefits of consolidation is the fact that it raised the competition bar. Bankers are becoming more competitive now because the franchise risk is now higher. If I start a bank with N5bn or N10bn it is different from starting a bank with N25bn or N50bn. Naturally banks are becoming bigger, stronger ad more focused. As a leading retail and commercial bank, we realised that we have our footprint everywhere. The market has changed after reconsolidation, and we decided to raise the number of branches and the locations we are going to be to remain ahead of competition.
A lot of people ask whether it is because of reconsolidation that banks are now looking at the opportunities in the industry. To that I would say yes and no. Yes because you have a limited number of banks competing among themselves. Naturally, innovation is getting better. Before now, how many ATMs did we have? Now First Bank has more ATMs than all the ATMs all the banks had before consolidation. This happened because shareholders funds have gone up and every bank tried to ensure that the funds are judiciously used.
Talking about money outside the banking sector, the reason is because of infrastructural deficiencies. But all these are improving. When you talk about having access to your money when you need it, this has improved, because banks are expanding fast and deploying various channels. At First Bank, for instance, all our branches are on-line. This was not the case before. First Bank has deviced ways to bring part of the N450bn into the system. We appreciate the fact that what we call banking penetration is very low in Nigeria. But there are tremendous opportunities through which more people will be brought into the formal sector.
Talking about e-payment, what is First Bank doing to ensure better services for its customers?
Our first major thrust is to decongest our banking halls. Because of our legacy and the fact that First Bank has been built over 100 years, we have the largest customer base in the industry. We also have branches in many locations where other banks don’t have. Therefore, First Bank has come to be recognised as a national icon in the country. It is the bank for Nigerians. That is why when you get to our banking halls, you see many customers, which we are very pleased about. But if you go to some other banks, you see scanty queue, and that tends to make people believe that such banks have superior services. That is not the case. We are converting that opportunity of large customer base to wealth by putting ATMs in every single branch of First Bank. In some branches, we even have two ATMs. All those customers you see in the banking halls, we are encouraging them to have a card. And it is free. And when they use the cards on our ATMs, it is also free. We are not charging them anything and the cards could be used at anytime of the day, because our ATMs operate 24 hours a day and seven days a week. This is just within our bank. We are having other arrangements and there are so many things we are coming up with plans that will jolt the industry. First Bank will bring an ATM for foreign exchange transactions. It is going to be first of its kind in the whole of West and Middle Africa. The ATM will operate in a way that a customer can just walk to it, put in his foreign currency, whether dollar, pound sterling or Euro, and it will dispense naira. We plan to put that ATM at the airports and major hotels.
But do we have the infrastructure to support these innovative products?
The infrastructural challenges we have in this country can also be good opportunities for us. All our services are supported by robust technology; that is why they are 24/7. Whether there is electricity supply or not, our ATMs will run. As I am talking to you, I have my mobile phone and note book, so that if my ATM in Akure, Ondo State is short of cash, I get to know immediately. The same thing goes for all our ATMs all over the country, because there is a monitoring software. This has made us to record over 99 per cent efficiency for our ATMs. As at today, in the entire country, First Bank is still the number one bank in terms of transactions volume and value. And the reason is that out of the total transaction of 13 million in a month, First Bank does about 2.5 million. Also, in terms of card issued out, we control over 50 per cent. And, of course, in terms of ATMs, First Bank is number one.
Some banks may be planning to displace you in this area. What are you doing to stay ahead of competition?
There are two ways. The game has changed. The new game in town is collaboration and competition, so we call it “coopetition”. First Bank actually initiated and formed Interswitch. It was also our idea to start up the ATM. The reason is that you cannot be an Island to yourself when you are doing a business like ours.
If you are doing a business with somebody who has an account in Bank A and another who has an account with Bank B, it is better for us to have a platform that is agreeable by everybody, that is secure, safe, and command confidence. That was what informed Interswitch. When we set up, First Bank called in Accentive, paid Accenture and called on other banks. We then turned our investments into equity. Our strategic thrust is infrastructure leadership. We want to build the infrastructure for the financial service industry, because we have the pedigree, reputation, brand name and deep pocket. The newer generation banks that may not be as strong, can actually use the infrastructure and pay a token to the owner of the infrastructure, and that is the essence.
In terms of what we are doing to remain a dominant player in the e-space, we are very clear that what will justify anybody leading e-space is the type of innovation. First Bank is a big organisation and at the same time a nimble organisation, because we have a clear focus, strategy management and a board, which are well embedded and good. As long as we remain the most innovative bank in e-space, we will remain the most dominant in this area. It is not just because of money.
In fact, as they say, idea is capital, every other thing is money. The greatest thing that is driving us is innovation.We are going to depend on innovation in technology and the experience gathered over time, and use these to dominate the market. First Bank is going through what we call mass expansion. All the undergraduates, all the secondary school students and artisans, we have different programmes for them. We are also forming alliances with a lot of organisations. We are also coming up with a situation whereby you can take your loans through electronic channels. The large chunk of what we are doing currently is collections. Whether you want to pay for DSTV, water corporation, Federal Inland Revenue Service, buy something at any shop or eatery, we want to make sure that these payments are made through us.
But the future is the First Service. How will it be for you to be in your house, prayer place or work place and have the channel you can do business with. The channel may be your mobile phone, notebook or ATM. That is what we call First Service. You are actually going to serve yourself, and it will be secured, safe, cost efficient and convenient, andyou will have confidence in it.
These innovations will definitely involve a lot of money. How do you hope to finance them?
A large percentage of the N100bn we are raising will go for e-space expenditure. This money will be put in infrastructural upgrade that will enhance all that we wish to do. Recently, we launched Netpay Internet Card. If you want to buy something on the Internet, pay for a club or association, most people find it difficult to use their major cards. Because when they use their major cards, it exposes the money or credit limit on that card. We are putting customer as the main nexus of every decision we are taking. We are building a bank that every black person should be proud of. You should be very proud to bring out your card or cheque book and say I bank with First Bank because that is the number one bank in Nigeria, the West and Middle Africa and that will be the number one and domineering bank in Africa. We are working towards bringing an ATM that will collect cash. All the ATMs in Nigeria are those that dispense cash. But soon we will bring in ATMs that will be collecting cash from customers. The ATM will sort out all the denominations. ATMs that will disburse loans, take your cash, dispense your cash, exchange forex, accept cheques from you. These are lots of things that we are coming out with, and we believe that with these, we are helping the industry, the regulators and the countries as a whole.
We are number one in pension custodian services, number one in registration. We are a foremost player in trusteeship. When you look at the things we are doing and at our subsidiaries today, there is no bank in the whole of West or Middle Africa that can actually boast of the kind of subsidiaries that we have. That tells you the kind of the unified platform we are presenting to our customers. Apart from our offices being transformed, our customer service is also transforming at a very fast pace. As part of the transformation, every customer of First Bank gets a statement every month. In terms of products, we will keep having new products as long as we can see the opportunities from the customers. Once we see a customer need, we device a product that will fit into that need because the whole objective is customer-centred.
From our products you will know that we are customer centric. Talking about e-payment, the number one product is the debit card. With the debit card, you can use it on the ATM, Internet, and POS terminal. We had been with Master Card for a long time as acquirer. But now, we are both acquirer and issuer.
We introduced M-banking with Glo so that customers can use their mobile phones. But we are moving ahead to ensure that a customer of First Bank can transact business with a customer of other banks, using their phones. We also have alert banking services. Anytime a customer pays money into his account or there is a withdrawal, they are alerted. Because we are the leaders in the industry, we do not make noise. In 2001, we pioneered banking on wheels. All the products we are bringing in will touch the lives of our customers.
You speak so passionately about First Bank and services to customer. Who is Remi Babalola.
I am the Executive Director, Lagos and West. I am also in charge of electronic payments; that is cards and channels. I am also in charge of consumer banking. And these are the key growth areas. They need a lot of passion, energy and a clear focus or innovation. I believe that the most important thing that keeps you going is that things must be done better. You can always improve on things. I call it continuously and never-ending initiative improvement. You can always improve on the ways things are done. It is not just competition for competition sake, but to ensure that we create value for mankind.
