Changing from corporate banking to retail banking demands strategic engagement, leadership —Dozie

He was the last Group Managing Director of Diamond Bank following the bank’s merger with Access Bank. Thereafter, Uzoma Dozie established Sparkle, a digital bank, which is a product of his experience working in the traditional banking space for over two decades. In this chat with GBENGA SALAU, he spoke on Sparkle, five years after and digital banking in Nigeria.

Can you give an insight into what Sparkle is?
Sparkle is a digital bank, unlike other banks, we are purely digital, as we do not have branches. We deal with our customers remotely. So, why did I go into this? I was in traditional banking for over 20 years and I played in a lot of sectors, from corporate to commercial banking and later rose to be Head of Finance Department and later the Managing Director of Diamond Bank.

Towards the second half of my stay in Diamond Bank, I started the retail business but before then, most traditional banks in Nigeria were focused on corporate, commercial banking and high network individuals but not so much about retail business.

And I saw that opportunity and Diamond Bank was always looking at how to take banking into new places that nobody wanted as well as the middle market at that time.And the only way you could do that and serve people then, especially mass number in a cost-effective way was to use technology. The retail banking opportunity started at a point where Automated ATM came into Nigeria and it was cost effective way of providing services outside the banking hours for our customers and delivering what we could not deliver to them without them going to the branches. Banks open from 9am to 5pm, and most people in the retail space do not have the luxury of going into the banking hall to spend 30 to 40 minutes. And do not forget that branches are not everywhere. So, it was a great opportunity. Also, it was an opportunity to provide basic cash and withdraw opportunity, aside other services.

I was fortunate to go to university abroad, when I returned to Nigeria in 1992, banking services I took for granted in the United Kingdom (UK), we do not have it in Nigeria from the retail perspective. So, I felt let’s get to that point and surpass it from Nigeria’s perspective using technology, especially as we do not have legacy system.

So, when I became MD of Diamond Bank, of course, the thing about establishment is that change is very hard to come by. Changing your organisation from a commercial, corporate focused banking to retail banking takes a lot of effort and leadership. And as the leader, you must not only believe in it,you must also use it. And we invested in the technology, but using it to also drive change in organisation. And we were very effective with it in terms of customers, because we moved from five million customers that took us 20 years to build to 15million customers three years after that without additional branches built. That was the power of mobile as we had the largest mobile banking customers in Nigeria at that time.

We also had the best proposition for small businesses like Micro Small and Medium Enterprises (MSMEs). So, I took a lot away from that, a lot of learning and of course from a system perspective, we were the only organisation then, not just bank, that was completely paperless. So, when you came to Diamond Bank, there was no paper and the whole idea was that you have to be nimble to be cost effective as an organisation, because when you are dealing with retails, you cannot just have people serving them, you have to have system serving them. You have to be able to be responsive and active and you do that by being mobile.

With mobile banking, I can work from anywhere so that remote working started from Diamond Bank. Then, we had a mobile first philosophy and I could approve anything on my mobile phone. For me, when we merged with Access Bank it was solely because of the retail business, nothing else. Access Bank has stronger corporate business and we had similar commercial banking system, but where we were hand and feet above them was clearly the retail space and the technology that we use.

But when Diamond Bank merged with Access Bank, Sparkle was the next big dream for me.

Where did the name, Sparkle, come from?
The word sparkle comes from the word diamond because diamond sparkles, so that was how the name came. And as a bank, we focus on two segments, individuals and small businesses. Why, because we believe we can give them a better banking experience than what they are currently offered by traditional banks.

Secondly, I have a strong philosophy that you provide services based on information, because people’s lives are based on decisions and decisions you make are based on information and the information you get is based on data. So, I believe that if I can help you do your transaction much better, then from that transaction, you can get insight to take better decision.

A good example of that is health, the reason health watches are booming is because it gives you data about yourself which helps you to take better decisions about your life. So, that is what we provide for our customers. And then, we focus on small businesses and why small businesses because the ease of doing business in Nigeria is difficult. Everything is physical. If I want to open a bank account, I have to go to a branch, why can’t I start my small business in my living room, why can’t I register my company with Corporate Affairs Commission (CAC) without physically going to their office. Why do I have to go physically to all these three points/ And why can’t we help small businesses leveraging existing technology and infrastructure so that anyone can say, I want to start a business and he or she can go to sparkle’s website and we can help him or her to register the business.We would onboard you and you can start doing your business without actually stepping out.

So, Sparkle is providing full banking services as well as being the alternative premium digital solutions to the existing banks. Our competitors are not companies providing online transactional services. And we are not a fintech, we are a bank that knows how to use technology to provide premium banking services to people and MSMEs.

The future is digital and you have to be digital as a small business, you must be able to receive payment, send things to your customers without them having to come to you. COVID taught us that. Traditional banks are not good at that, even at Diamond Bank, we tried but there is a limitation of technology. And to do it digitally, you must have the right technology, reason Sparkle is completely cloud, there is no physical branch and our staff comes twice to the office. So, they can work from home and take decisions from home or wherever they are in world. This is just as our customers can be anywhere in the world, we run a 24-7 business and customer services. We are working with Deleiote to leverage Artificial Intelligence (AI) in our operations because some of the customers’ problems could be solved by robots.

We are doing this because we understand that competitive advantage is not about data but about information, the right type of information and the right time.

What cutting edge services do you provide?
This is the way I see banking. Budget planning for instance. I want to go on holiday and I look at it from customers’ perspective.

We built Sparkle so that I can use it and not just my customers, but benefiting from the power of digital banking. There is no bank MD that uses mobile app the way I do. At Diamond Bank then, we said no staff should use the banking hall, but the mobile app so that when it is down, they feel the pains of the customers. So, at Sparkle, nobody uses it because when it is down, I feel more pained than anybody. This is why I enjoy it, nobody does my transactions for me, I do it myself. And at the end of the month, I can see where my money goes to. Even simple payment made three months ago to track it, you have to go to generate a statement and start looking through but with Sparkle, you just put the person’s name, and all the payment made to the person will prop up and you see it. This is probably because you want to take a decision or if you have given the guy more money than you should have or you want to give him more money. So,we created that solution that is about information and decision-making.

In designing the sparkle app, it was designed as a wallet, to receive and send money and it is easier and simpler to use.  For businesses, instead of just giving you a bank account, we also give you business support services. For instance, when you start your business, you do not need to hire a tax consultant, and if you are one or two man business and you do not need a human resourceofficer, manager or inventory manager, this is because you do not have the luxury to spend on that and you want to spend your resources on your core business, with sparkle you are covered.

It is also about capturing your data and that of your customers, which give you insights. We are providing banking services but capturing a lot of data for decision making at the same time, which could help to provide better services. And that is the power of digital. And digital banking is the future; banking is going to be here for a very long time.

I always look at it from the consumers’ perspective. Central Bank of Nigeria (CBN) is doing a lot to help understand the difference between banks and fintech. Fintechs are good at enabling transactions, facilitating inclusion and making things easier but banking is about storing people’s value, which means I take your money, I either give you back as it was or I add value to it. And to do that you must know how to take and manage risk, taking risks to make returns for your depositors and shareholders. And to do that you must governance structures.

And you must use some tools to help you understand the market, the people and the market risk, which is not what a lot of people really do. Aside we have the governance structure, we are different, from the fact that we understand banking very well because we have been banking for almost 25 years and we understand technology very well because we have used it to advance banking. And now, we are using new technology, opportunities to actually bring about better customers’ services and experiences to people, as well as things that are very difficult for other banks to do.

You said change is sometimes difficult, how has been the journey of transiting from traditional banking to servicing digital banking?
It is an education, it has been a learning experience because the world has changed and the customers have changed; even the people that you worked with including the condition of works. When you start a business you need to understand the technology and the psychology of the people.

Trust some argued is limiting digital banking in Nigeria?
Trust is also changing. And everything is about data when you look at the data of young people in Nigeria, they are in the majority. My generation and above, our psyche is about ownership, but power was about information. It is going to be more cost effective for people to open their bank account on the phone rather that through a physical branch.

As a digital bank, technology infrastructure is critical to your success, which is not topnotch in Nigeria?
Technology deployment is about reliability and affordability. But technology is getting better by the day. However, we have tried to build around the constrains to give the best of experience to the consumers.