‘Prospa’ like ‘Brass’: Please let’s find a better name for these ‘banks’
Do you remember Slip-free banking? That was from GTBank. In 2005. Seventeen years ago. The concept was utterly simple: come into the bank and conduct banking by filling no forms, carrying no slips. With real-time digital connections, GTBank tried to demystify banking. It was truly ahead of its time.
But that was then. These days, with new banks such as Kuda, Nomba, Prospa, and Brass, the quest for frictionless financial transactions has broken new dimensions. And because of that, these new tech-powered financial institutions are beginning to look like a different species of organisms — they’ve got the DNA of banks but are mutating into much more. Perhaps, if you really think about it, they should be known by a different name.
Take Prospa. It’s a bank that offers to help entrepreneurs register their businesses. Once the registration is complete, it then, “in five minutes”, opens an account for the new company. This is Prospa’s big differentiator. And it’s brilliant, isn’t it? If you would like to start a company but need help navigating the Corporate Affairs Commission’s online registration portal, Prospa says it will help you.
This means that Prospa is not your grandmother’s bank. It’s a business consultancy that also does banking. Now, one question for Prospa is this: how many of Nigeria’s 40 million underserved micro-businesses will it have to register for it to be profitable?
Question two: if a company is so small that it cannot afford to employ a lawyer or executive or consultant to do its registration, does that company have the liquidity or business volume to actually return a profit to Prospa?
Of course, the bank has positive projections, otherwise, it wouldn’t have attracted over $3.8m in funding from investors.
To be sustainable, though, Prospa may need to add even more extra services to its bouquet. Services like: financial accounting and market strategy for its customers. Perhaps it might even add management consulting, the sort you would typically expect from a firm like Accenture or Deloitte. Or, whoever said a bank couldn’t effectively run its customers’ entire lifestyle, planning, negotiating bargains, booking travels and holidays, scheduling and handling school fees, and so on?
Do you see where I’m going with this?
The more we follow the explosion of possibilities that technology has dropped into financial services, the more users can rely on the service providers to handle more aspects of their personal and corporate lives. The more these new banks become way more than… banks.
In the case of Brass, it has even gone deeper into the whole do-more-than-ordinary-banking thing.
Once a prospect signs up with Brass, the banks onboards them to a portal from where payments can be made, invoices can be dispatched and reconciled, and team access to accounts can be controlled. Brass appears less than a bank and more like an empathic butler who intuitively feels your pain and serves you what you need to destress and regain your bearings.
When it comes to loans, Brass says it can quickly smoothen out cash flow wrinkles. “Capital is available,” it says on its website, “based on your cash flow performance and history with us.” The website, by the way, is festooned with customer testimonies.
If we assume that those customer endorsements on the Brass site are legit, you can see how that may start a cycle of customer acquisition for the bank. New prospect sees testimonials from real, traceable businesses on bank’s website. Prospect gives bank a try. Prospects become a customer. Customer is impressed with banks’ services such as simplified operations, low charges on transactions, transparent tracking of funds, sweet interest rates, access to loans, business advisory, team access integration, and multi-platform mobile applications. Customer shares positive reviews of the bank’s services online and by word of mouth. Positive reviews attract more prospects. And the cycle begins again.
It does also help that at this time, digital banks all around the world are having a great time in the sun, particularly because they seem to have earned a lot of trust from their users.
According to the Edelman Trust Barometer of 2021, 70 percent of consumers surveyed in 27 countries, including Nigeria, report that they trust the technology industry. Fifty-three percent of them trust the financial services industry. While these numbers show a decline in the level of trust compared to the previous year, and while the financial services sector only scores about average marks, tech clearly leads all other industries. So, by bringing the halo of tech to financial services, fintech companies win more converts to their services.
Meanwhile, as we noted before, is the number of new adopters of fintech services large enough to make a difference? As great as these services are, digital banks still largely depend on internet connections and a tech-savvy customer base. This suggests that their customers are likely to be concentrated in cities — Lagos, Abuja, Port Harcourt, Ibadan, Kano, Kaduna mainly. This may sound like a setback but is it? I’d say it’s a good start.
The more tech becomes accessible and second nature to more people, the more natural it feels to hop on board a fintech platform to plan everything.
As things currently stand, digital banks are blurring the lines between consulting firms, software as a service (SaaS), money transfer start-ups, and banks — and to continue to term them all as ‘banks’ suggests that we’re ignoring the major change that’s unfolding right before our eyes.
In the meantime, while the regulators may be figuring out a distinct classification to capture this evolution, at least the rest of us can rest in the satisfaction that, thanks to tech, real lifestyle banking is finally becoming a reality.