‘Consumers’ digital and financial lives are now linked,’ says Ecobank’s Ade Ayeyemi

By Joël Té-Léssia Assoko
Posted on Thursday, 15 September 2022 11:24

After seven years at the helm of Ecobank Group, Nigeria's Ade Ayeyemi will be stepping down. © Guilhem Alandry/Documentography for JA

As his last moments at the head of the group he joined in 2015 approach, Ecobank’s CEO Ade Ayeyemi shares his recipe for digital transformation and details his vision for the future of finance and tech on the continent.

In half a dozen years, under the auspices of Ade Ayeyemi – its current CEO who is leaving and whose replacement is Kenya’s Jeremy Awori, as revealed by Africa Business+ on 8 September – Ecobank Transnational Incorporated has launched several digital financial products. Over time, the Ecobank Mobile App (2016), CashXpress (withdrawals and payments made via a bank agent or an electronic token at the counter, without a bank card, in 2016) Rapidtransfer App (diaspora transfers, in 2017), Omni Lite (for SMEs, 2018) and Omni Plus (large corporates, in 2019) have been added to the online banking platform Omni, which was created in 2015.

The cumulative effect of these different services – complemented by partnerships with telecoms operators MTN and Airtel, payment services such as Alipay and Palm Pay, and money transfer operators Western Union, RIA and MoneyGram – are now more apparent in the bank’s results. By the end of 2021, payments accounted for 12% of its revenue, or about $208m, up almost 25% year-on-year. By mid-2022, the bank claimed nearly 14 million digital customers, more than its total customer volume in 2015.

While the idea most often associated with his career path – both at Ecobank and during his three decades at Citi – is a strict focus on costs, Ayeyemi often reiterates that he was in charge of both “operations and technology” for Africa in the US bank. “I came up through the application development side of the business and have a very good understanding of how to use technology to develop a business model that allows us to succeed,” he tells the curious.

As he enters the final stretch of his years at the helm of Ecobank, having reached the retirement age limit of 60, the Nigerian leader agreed to talk to us about this aspect of his record as well as the digital bank’s future. Two of his colleagues working on the pan-African institution’s digital transformation: Nigeria’s Tomisin Fashina, director of operations and technology, and Senegal’s Abdoul Aziz Faye, director of information systems, also agreed to be interviewed.

You recently announced that the value of transactions carried out through all the group’s digital tools had increased by $10.5bn over the year, reaching $39.1bn in the first six months of the year. These figures came as a surprise, as Ecobank is not necessarily seen as a leading digital player in the market. Do you think this aspect of the bank’s evolution – compared to, for example, reducing costs or branch numbers – has been undervalued? And how have you brought about this transformation?

Ade Ayeyemi: When I joined the bank in 2015, we took stock of our digital assets, to see if they were fit for purpose with our strategic intent – to reach people on our continent, across multiple channels, in an efficient manner. We, therefore, focused on strengthening our technology subsidiary to enable a very dynamic digital transformation. Our technology arm operates from Ghana, where it exports services to the rest of the countries where we operate. We also realised that it was important to have world-class data centres – with a primary data centre in Accra and a backup in Lagos – with world-class connectivity and a private cloud that allows us to monitor and interact with our operations.

We have also demonstrated our intention to provide our customers with a central banking application that meets international industry standards and offers a real convergence of services (cash, payment, transaction processing, etc.). This strategy of consolidation and convergence has not only reduced our costs but, more importantly, enabled us to serve our customers in 33 markets across Africa with the same high standards of quality.

Abdoul Aziz Faye: I would like to add that the new generation of customers does not bank in the same way as previous generations. In Africa, you now have more than 800 million people under the age of 25. They want to bank where they are, when they want to bank, without having to go to a bank outlet. To serve this generation, you have to digitise your operations and innovate.

How has this strategy manifested itself in practice, not just in terms of transaction volumes, but in the day-to-day running of the bank and the interactions with your teams, and your customers?

A. A.: The migration from physical to digital banking has seen our ‘physical’ footprint halve since 2015 to around 600 branches, as we now serve over 33 million customers, compared to 10 million seven years ago. Our customers are able to get services instantly, with a marginal transaction cost now close to zero. And our cost-to-revenue ratio has also improved significantly (from over 70% to under 60% by 2022). Going forward, we will become even more efficient, our costs will continue to fall, and the company’s profitability margins will continue to improve.

Tomisin Fashina: Staff numbers have reduced from 19,000 to around 13,000 today, but at a much higher volume and value of transactions. Digitalisation has allowed us to change the dynamics of our transactions – from 70% done through branches and 30% through ATMs before to only 6-7% done in branches today, compared to 45% through digital channels and the rest through payment cards. Our digitisation strategy also ensured that we were ready to work and provide services when the Covid-19 crisis occurred and in some cases, up to 50% of our employees were working from home.

Was it easy to convince the teams to follow you? The changes you mention are quite significant, in terms of staff and professional organisation…

A. A.: At the end of the day, you have to make sure that these changes are not just a series of actions, but part of a broader strategy. It was important to clearly state the strategy that we are pursuing as an organisation, which is to connect people in several countries on our continent. As a banking institution, technology allows us to connect with people and serve them equally, regardless of their social class or the part of the continent they are in.

Once we were able to anchor this strategy in the organisation’s purpose, it was easier for my colleagues to willingly follow us in this direction. We got people on board and as soon as we started to produce visible results, more of my fellow Ecobankers were convinced. The path of technological progress we have embarked on has helped convince people that we can become a much more stable, profitable and impactful organisation.

What developments do you anticipate in terms of the future of digital banking and services?

A. A.: Digitalisation and globalisation are key trends that we have seen in this century. Digitalisation, in particular, enables organisations and companies – if they use technology correctly – to implement their strategy. For the years to come, the first thing we all have to understand is that consumers’ digital and financial lives are now linked. Whether they are watching a movie or using the Amazon app, if they see something and want to purchase it, they want to be able to do so directly.

Banking consumption is therefore taking place in the background, due to the integration of financial and online lives. In the future, the customer will be able to choose and configure their payment facilities and banking services. We will become more and more sophisticated – today more than 80% of the time spent opening an account is spent confirming your identity – and this digital identity will allow us to do things faster.

Ecobank has invested in recent years in supporting African fintech start-ups, some of which are selected each year through competitions and incubated by Ecobank. What do you think of the difficulties that the African fintech ecosystem is facing today, as several financial regulators – in Kenya for example – are imposing sanctions on them?

A. A.: Fintechs are an essential part of the financial industry. We also understand the regulatory issues that central banks want to address in terms of information integrity, and we don’t want a situation where monetary policy loses effectiveness. However, the combination of knowledge and technology allows us to address these concerns and desires when it comes to designing and delivering fintech services.

This is to ensure that we benefit from what fintech can do, without regulation suffering. We need to get the fintech community to work with regulators to ensure that the quality of service delivery continues to be to everyone’s satisfaction. This conversation between stakeholders must continue.

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