‘30% of banking revenues come from digital payment ecosystem’
•Agbaje says GTB will crash data price if licensed as telco
About 30 per cent of banking revenues are said to be coming from the various digital platforms made available to customers.
This was disclosed by the Managing Director and Chief Executive Officer, Guaranty Trust Bank (GTB) Plc, Segun Agbaje, at the just concluded Social Media Week (SMW) Lagos, 2020.
Speaking on ‘Going beyond the digital experience’, Agbaje said that banks have realised that anybody who has the ability to leverage digital technology has become a competitor and is now competing with traditional banks who historically owned the payment and financial services space.
“About 30 percent of banking revenues come from the payment space. Of course there is also competition for loans, credit and for those who do salary advances; but the critical space that people are fighting for today on digital platforms is payments. All the other things that come on the back of that are add-ons,” he said.
Agbaje, who gave a presentation on the growth of digital payment and how GTbank is strategically positioning itself to stay ahead with innovative solutions, said digital payments in Africa is largely driven by the proliferation and ease of use of mobile devices and the large number of Small and Medium Scale Enterprises (SMEs).
“The ease and use of phones is really driving this payment revolution. Mpesa does over $30 million. As the rest of sub-Saharan Africa starts to do about 68 per cent, the amount up for us to fight for is about $60 billion in yearly revenues of the payment space. This is a very lucrative and very fast growing space and Africa’s youth population is clearly driving it.”
“The second thing that is driving it is SMEs. There are over 180 million SMEs in Africa, doing about 4.5 billion transactions a day, so when you take the young, technology adopting population, huge proliferation of SMESs, then you see the engine of growth that is really driving the payment space,” he said.
Fortunately, the African digital space has actually leap frogged and is more advanced that what obtains in many other developed economies; as mobile money technology is booming year on year, and the only country that might actually be doing better that countries in Africa is China. This landscape is very developed and the competition is intense in Africa, as a result, industry experts say that there is more to gain and much more than technological skill is needed to service the digital payment sector adequately.
According to Agbaje, who hinted that if the Nigerian Communications Commission (NCC) should grant the bank a telecoms license, “GTB will bring down data prices below what is currently obtainable in India. Just tell NCC to grant us access, and you will see what we are capable of doing. At least, you can see the digital footprints GTB has created in the banking sector. We are not resting. From two million to 18 million retail customers in the last one decade, it has been thr product of hardwork and innovation.”
Agbaje said GTBank is determined to stay relevant by building competing products on every payment platform space. Sighting GTCollections, GTPay, Habari, GTworld, GTtransfer and its other digital payment and service products, the CEO said the lucrative and fast growing digital payment space should never be neglected by traditional banks who are determined to stay afloat.
“The fundamentals of our digital space are constant innovation and end-to-end customer experience. Technology is going to become a commodity that will be easily bought; so it is definitely not the people that have the best tech that will win this space. What I think would be the differentiator will be the company that has the best technology and can give you the best customer experience by living you with that feeling that there are people who care.
At GTBank, we are going to win very easily because we have built all the digital platforms and we never stop engaging and interacting with our customers,” Agbaje stated.
“Already, leading telecommunications service providers in Nigeria have been granted payment service banking (PSB) licenses, and have started intense push to ramp up mobile money numbers in volumes and value, especially as they seem to be advantaged with penetration levels and subscriber numbers. It therefore goes without saying, that traditional banks would need to do much more than simply provide digital payment options for customers in Nigeria.
“It is also important for banks to note that apart from Fintech and Telcos, global companies which are not fintech but provide such services like Alipay, Amazon pay, Apple pay, Google pay and the rest, have advantages that local banks cannot have. These companies have the resources and the technical know-how, such that anytime they choose to play on the African continent, it would be an easy entry for them and 30 per cent of banking income is easily at risk,” he stated.