Nigeria’s Access Bank began operations in 1988 as a privately owned commercial bank and, over the subsequent years, grew into a top-notch, world-class financial institution with ambitions to be not only Africa’s most successful bank but the continent’s gateway to the rest of the world. It is Nigeria’s largest bank under such metrics as assets, loans, deposits and branches and Africa’s leading bank by customer base. One of the key ingredients in Access Bank’s success has been its “robust, long-term approach to client solutions—providing committed and innovative advice”.
After achieving laudable success and growing exponentially in corporate banking, Access Bank applied this same expertise to the personal and small-business platforms it acquired from Nigeria’s International Commercial Bank in 2012. Building a vibrant retail bank that is fully digital and omnichannel was a key pillar of the bank’s growth strategy, and in 2019, it completed its merger with Diamond Bank, then Nigeria’s leading retail bank with 19 million customers.
Through its four banking segments—corporate and investment, commercial, business, personal and private—the bank is thoroughly committed to delivering “sustainable economic growth that is profitable, environmentally responsible and socially relevant” with a special focus on financial inclusion, women and youth. Access Bank continues to seek opportunities to expand its outreach across the African continent and beyond. The full-service commercial bank operates through a network of more than 58,000 touchpoints spanning three continents and 12 countries, serving 40 million customers. Throughout the years, it has received numerous awards for its achievements from recognized international organizations.
International Banker was pleased to have the opportunity to ask Dr. Herbert Wigwe, Group Managing Director and Chief Executive Officer of Access Bank Plc, several questions about Access Bank’s successes and plans.
Dr. Wigwe, thank you for your time…
Access Bank has been exceptionally responsive towards containing the potential impact of the coronavirus. Among the most interesting aspects of this response has been the setting up of its Incident Command Centre. What are some of the primary responsibilities of the Centre? And have you been satisfied with its effectiveness to date?
At Access Bank, our business continuity management (BCM) practices are governed by a robust framework that clearly identifies critical assets and the vulnerabilities to which those assets are exposed. At a strategic level, the Incident Management Team (IMT), otherwise referred to as the Incident Command Centre (ICC), provides leadership and strategic direction during a crisis. The team has the primary responsibility for the command, control, assessment, communication and coordination of the stages of crisis response.
The IMT is a key part of our operations as it is authorized to act in the best interest of the bank by minimizing the impact of or preventing any disruptive event for the bank. Case in point, following the outbreak of the COVID-19 pandemic, the IMT activated the bank’s Business Continuity Plan (BCP) to protect employees, customers, other stakeholders, facilities and service infrastructure while providing critical services. So, yes, the ICC was exceptional in its performance, and I was satisfied.
According to reports, Access Bank has agreed to buy a majority stake of the African Banking Corporation of Botswana, with a deal expected to be concluded in 2021. Access Bank has also recently bought a controlling stake in South Africa’s Grobank for around $60 million to become the first Nigerian lender to establish a presence in South Africa. As well, it is agreeing on deals in Zambia and Mozambique. What does such international expansion provide to the bank that is not achievable through domestic channels?
Access Bank has a vision to be Africa’s gateway to the world, and this means that we have to be present in key African markets.
Botswana is renowned for its quality sovereign rating and stability. Thus, our entry into that market will enable us to consolidate our strategy as a strong banking partner in key verticals across retail and corporate banking, especially supporting trade and payments across Southern Africa and, more broadly, Sub-Saharan Africa.
Access Bank’s move to acquire the African Banking Corporation of Botswana is anchored on a broader business target for the COMESA (Common Market for Eastern and Southern Africa) trade bloc. The acquisition of Grobank will ensure that the bank remains sustainable and continues to support all its stakeholders while opening doors to growth opportunities both in the short and long terms.
Access Bank recently revealed it had spent a whopping N18.7 billion on information technology (IT) and e-business-related initiatives in 2020, almost twice as much as the N9.7 billion spent in 2019. What are some of the specific initiatives that received the most expenditure? And to what extent has this extra spending been prompted by COVID-19?
Access Bank’s retail-banking business has grown consistently across all income lines, driven by a strong focus on consumer lending, payments and remittances, digitization of customer journeys and customer acquisition at scale.
SMS (short message service) cost, software-system maintenance and system support formed the largest share of our total expenses both in 2019 and 2020. However, the amount allocated to these three areas quadrupled in 2020 compared to 2019. We spent more than N5.5 billion on SMS cost, approximately N4.6 billion on software-system maintenance and almost N4.5 billion on system support.
With the increased spending, Access Bank recorded improvements across its financial-inclusion initiatives, with digital-transaction value rising to N33.89 trillion in 2020 from 1.6 trillion transactions. We also opened 3.6 million new accounts via telco (telephone company) partnerships to consolidate our position as the largest bank in Sub-Saharan Africa by customer base with 40 million customers, of which 17 million are mobile users across our USSD (Unstructured Supplementary Service Data) and mobile applications.
FacePay sounds like the most exciting technology currently being used by the bank. Can you briefly explain how this works? And with a near-zero transaction-failure rate, can you also account for the work and effort undertaken to ensure that it would be so successful?
This novel solution digitally automates in-branch transactions to allow our customers to carry out transactions within banking halls as self-service functions, thereby minimizing human intervention. For merchant payments, FacePay enables the vendor to receive funds from customers with an instant settlement of those funds into the merchant’s account.
With subsequent research on facial authentication and a desire to radically transform payment systems in Africa using technology, we will continue to evolve the solution and ensure that its success is unmatched in-market.
Is there any particular product or service that has been rolled out as part of the bank’s digital transformation—or is soon to be rolled out—that you would like to take this opportunity to highlight?
Access Bank currently leverages robotic process automation (RPA) to deliver speed and excellence in line with our digital roadmap. This technology allows more than 70 processes to be performed with more than 15 million records processed daily, and it has replaced more than 20 staff roles, leading to efficiency and effectiveness in delivering services. It has also largely improved customer experience, which can be seen in the prompt resolution of customers’ complaints.
A recent Bloomberg article highlighted Access Bank’s focus on developing its own payments infrastructure, at least partly in response to the rising tide of technology firms entering the space. How much of a threat to Access Bank’s business model do you expect Nigeria’s burgeoning financial technology (fintech) sector to be over the next few years? And do you anticipate much scope for collaboration with the sector to help the bank deliver the most innovative solutions to the country?
The burgeoning fintech sector is an impetus to our model rather than a threat as our digital strategy at Access Bank has positioned us to be leaders in fintech and payments in Africa.
At Access Bank, we understand that fintechs play a major role in the innovation ecosystem and have the potential to provide customer-centric solutions. Accordingly, we launched an initiative known as Africa FinTech Foundry (AFF). It is a Pan-African start-up accelerator that consists of an ecosystem of founders, mentors, investors and partners. The Foundry aims to find, curate, invest in and package fintech start-ups for growth and upscaling.
How has the pandemic changed your approach towards banking leadership, if at all?
Our processes and leadership at Access Bank have always been governed by strategic risk management, and if anything, the pandemic helped strengthen our resolve in that approach.
The board and senior management are responsible for strategic risk management and oversee the effective functioning of the risk-management framework. The functional units (i.e., the units that carry out business or operational functions) assist the board and senior management in formulating and implementing strategies, providing input to the strategic planning and management processes, as well as implementing the strategic risk-management framework.
In partnership with ScaleUp Africa, a Pan-African enterprise-development agency supporting female-owned SMEs (small and medium-sized enterprises), Access Bank recently hosted a virtual Pan-African Women’s Conference with more than 1,500 participants to highlight the importance of creating an enabling environment that helps women in Africa to thrive. What were some of the key takeaways from the conference? And how does the bank actively promote female empowerment within the organisation?
We hosted the Pan-African Women’s Conference as one of our activities to mark the sixth anniversary of Access Bank’s flagship product for women, the “W” Initiative. Through the conference, the bank sought to highlight the importance of creating an enabling environment that helps women thrive—in the workplace and otherwise.
Women bring unique value and a fresh perspective to the workplace. This is why at Access Bank, we are deliberate about empowering our female employees. In line with our commitment to gender diversity and inclusion in the workplace, we introduced the Access Women’s Network (AWN). The AWN was formed to support, develop, promote and retain female employees.
Access Bank has a solid track record for sustainability; for instance, it launched the Nigerian Green Bond Market Development Programme. What does this programme involve?
The markets in which we operate are among the most challenging in the world, as we are faced with multiple developmental issues. Whilst these challenges create opportunities, we are devoting our resources to achieving results and making impacts through the power of finance. To this end, we launched the Nigerian Green Bond Market Development Programme in June 2018 with the objective of developing a non-sovereign green-bond market that will entrench the principles of sustainability into the Nigerian capital markets over a three-year period.
For us at Access Bank, our issuance of the first CBI (Climate Bonds Initiative)-certified corporate green bond in Africa solidified our position as a leader in sustainable finance on the continent, showcasing our commitment to supporting the transition to a low-carbon economy through green bonds.
As part of its sustainability strategy, the bank highlights its commitment towards sustainable societies: “Supporting vibrant and successful communities in every market it works in—helping drive out corruption, promoting and protecting human rights, ensuring a healthy and rewarding working environment for its employees”. Can you provide a recent example of the bank demonstrating its support for sustainable societies in line with the above description?
Over the years, Access Bank has made deliberate efforts to support the growth, development and prosperity of the communities and societies within which we operate. We recognize the importance of impact investment and the role it plays in mitigating social and environmental risks, expanding our market share and building goodwill; hence, we support various initiatives, projects, organizations and events that are focused on positively impacting the communities in which we live and operate. These investment initiatives are centered on our commitment to empower local communities and strengthen existing relationships with our partner organizations.
As such, we have invested more than N10.25 billion in various corporate social responsibility (CSR) efforts since 2015, which have impacted 1,316 communities and reached 30,075,356 lives and 793 NGOs (non-governmental organizations). These projects have been in our CSR priority areas: health, education, sports, arts, environment, women empowerment and social welfare.
At the start of the COVID-19 pandemic, the bank spearheaded the creation of the Coalition Against COVID-19 (CACOVID) alongside other private-sector leaders to support the Nigerian government’s efforts to combat the COVID-19 crisis. In my capacity, I donated N1 billion to this initiative, and more than 50 private sector organizations and individuals have contributed funds worth more than N35 billion.
In addition to providing treatment, test kits, isolation centers and food-relief materials across the country, we also played an active role in educating the public on preventive measures against the virus.
What do you consider the most important initiative pertaining to sustainability with which Access Bank is currently involved? And what are the key objectives of this initiative?
While all our sustainability initiatives are equally important because they all cater to peculiar areas of societal, economic and environmental needs, the impact of the pandemic and the civil unrest experienced in Nigeria in 2020 led to the launch of the All4One community project.
One focus of the All4One project is targeted at supporting, building and rebuilding local communities affected by the negative impacts of the civil protest. In addition, the All4One community-project programme aims at impacting lives and businesses positively, rebuilding communities and reviving communal spirit amongst Nigerians.
The goal of the All4One project is to provide grants for individuals and micro-businesses that have been impacted negatively by the #EndSARS protest. The grant programme was two-pronged: individuals (indigent individuals, students, unemployed individuals) and micro-businesses and market women (caterers, photographers, barbers, hairdressers, artisans).
The business-recovery intervention fund provides interest-free loans for businesses with a six-month moratorium period and grants to small businesses to facilitate their business recovery and sustainability. So far, the bank has supported more than 65 businesses with interest-free loans totaling N3 billion and availed grants worth N22.321 million to 105 micro-businesses across eight states in Nigeria.
If I’m not mistaken, the retail-banking goal of Access Bank is to provide banking services to one in every two Nigerians by 2022. Would you say you are on track to achieve this goal? And what do you consider the single biggest factor the bank must address to get there?
Our vision to provide banking services to one in every two Nigerians by 2022 took off with our merger with Diamond Bank. This move positioned us as the largest retail bank in Africa, measured by more than 39 million unique customers and more than 46.7 million account products. As a result, our retail offerings and propositions were revamped to enable our customers to access a broader range of products and services. We now serve clients in highly diverse segments: unbanked and underbanked, children, youth, women, seniors, employees and high-net-worth individuals as well as emerging businesses via an expanded network of more than 58,000 touchpoints, including branches, ATMs (automated teller machines) and bank agents.
A critical factor in achieving this vision is to continually embrace digital banking, thereby strengthening our customer-first, digital-first and data-led outlook. That way, we can meet the changing needs of our clients, help stakeholders achieve their goals and deliver the retail business that will pilot us to becoming the world’s most respected African bank.
What do you consider the most significant adjustment the bank will have to make to adapt to the “new normal” brought on by the coronavirus pandemic?
The pandemic has elevated the awareness of environmental responsibility across all industries. Access Bank will have to make significant changes in its exposure allocation to manage this development.
We have a very dynamic leadership and workforce, which means that staff have worked from home and at designated safe hubs with maximum productivity throughout the pandemic. The bank has also adopted all necessary COVID-19 protocols and will continue to ensure it operates in the best and safest way for staff, customers and partners. The bank understands that the business environment is an evolving one and is positioned to evolve as the need arises. All necessary upgrades to IT platforms and technology in the bank have been made and will continue to aid remote work and service delivery.
What do you consider to be the bank’s biggest challenge over the next 12 to 18 months? And how do you intend to address this challenge?
The banking sector is undergoing a radical transformation. In the next 12 months, some of the transformations include changing business models, disruptive technologies, fintechs and compliance pressures. Furthermore, as information breaches become more frequent and privacy concerns increase, compliance and regulatory necessities become more limiting as a result.
To address these, Access Bank will continue to increase its allocation to IT investments and enhancement of existing risk-management framework capabilities. We have enhanced our online monitoring to catch up with the current digital-banking environment. We receive alerts of transactions through a risk-based approach by focusing on the high-risk areas, thereby spotting non-conformities on time and have also enhanced our compliance-management standard.
In response to the increased cybersecurity threat to businesses globally, we have a cybersecurity framework and have also adopted an in-depth, layered approach to cover cybersecurity practices, information-security processes and infrastructure, which includes cybersecurity governance, operations and infrastructure across the enterprise. The continuous advancements and innovations in technology and the endless need to improve services have made digital banking a direction into which the bank must tap with an adequate mitigating approach to handle the inherent risks involved in the business. In response to the digitization needs, we have a digital-banking framework that enables the bank to maintain an overall cyber-risk appetite of “moderate risk” while adopting digitization processes in meeting the needs of our customers.
How do you anticipate the Nigerian banking sector changing over the next few years? And would you say that Access Bank is well positioned to capitalize on those changes?
As the growth curve of the banking sector flattens, there will be increases in banks’ investments in other high-growth sectors within the financial-services industry to compensate for the decline.
Access Bank is currently engaged in transitioning to a Holdco (holding company) structure to diversify and invest in other critical financial-services sectors, such as payment services and insurance, to increase earning capacity and deliver optimal returns for shareholders.
Access Bank will continue to work with development finance institutions (DFIs) to expand our African operations. In line with this, we have identified eight African countries for potential expansion as we seek to benefit from the opportunities presented by the African Continental Free Trade Area (AfCFTA). These countries are Morocco, Algeria, Egypt, Ivory Coast, Senegal, Angola, Namibia and Ethiopia.
Many thanks again for answering our questions, Dr. Wigwe. Access Bank is certainly a model to other banks of how far a bank can go in fulfilling its goals.