Mohammed: It’s Cheaper to Drive Digital Innovation in Financial Sector

Director, Digital Business and Innovations, The Alternative Bank, Mohammed Yunusa, speaks on how the bank’s tech solutions are driving digital innovations in the banking sector and how the bank was able to manage customers’ transactions during last week’s national service disruptions occasioned by multiple submarine cable cuts, among others. Emma Okonji presents the excerpts:

You are instrumental to the creation of disruptive and innovative digital business models and solutions in the banking industry. What inspires you into all of these?

I like looking at things from the position we find ourselves as a country. The truth is that there is not so much innovation in the world that we cannot replicate in Nigeria. Since we can replicate those innovations, we have the opportunity to jump the learning curve. For me, I have an inner drive that tells me we can do things better and even more secured, and again, digital transformation has brought a lot of opportunities for people to leverage on and create business models that work effectively and efficiently, that will enable us grow much faster. It also means that by leveraging the opportunities that digital transformation brings, our businesses will become resilient and scalable. My inspiration and key driver is about getting the finished line to be more efficient and more secured and better than anyone else has done.  

Your background is in Accounting. How did you get involved in using technology for financial service disruption?

I have always been a curious person and my curiosity is always leading me to do things differently and better. Part of my research shows that we as a nation can actually do a lot better by leveraging technology. Understanding all the opportunities that technology brings is almost impossible to do because we have seen that technology is fast driving development across the globe and people are building billion dollar businesses out of technology. People are solving crisis with technology solutions and people are virtually doing everything to make money, using technology. We need the human knowledge to understand how technology works, and when you understand how technology works, you can implement it in any sector where you find yourselves. My background is in Accounting like you rightly said, but because I understand technology, I am applying it in the financial sector, where I found myself. I am happy that I am using technology to solve challenges in the banking sector. It is a good thing that we have technology and we are able to adopt it to address identified challenges. It is my prayer that whatever comes after technology, that is more efficient than technology, we should be able to adopt it and utilise it maximally.

Last week, financial institutions had downtime and customers could not carry out successful transactions as a result of the cut in the submarine fibre optic cable in the Atlantic Ocean around Senegal and Cote d’ Ivoire. How was your bank able to address the situation and still helped customers to transact amid the downtime?

It is quite unfortunate that submarine cable operators had multiple cuts on their submarine cables last week, which disrupted internet services and banking operations, but we were able to manage the situation for our customers because we have made huge investments in our backup system that enabled our customers to still transact, except for the first few hours on the first day of the submarine cable cut. What we did was to switch our customers to our backup and since then the backup has been up and running, allowing customers to carry out successful financial transactions without any downtime experience. This is the kind of promise that The Alternative Bank has given to all its customers, to always ensure that customers’ finances are protected and the various channels of transactions are also protected at all times.     

How is your bank leveraging emerging technologies to create jobs for Nigerians, especially at this time when unemployment rate is on the rise?

Before now, there were insinuations that technology will take away jobs and create unemployment for majority of people, but the truth s that technology will create more jobs that are digitally inclined and phase out analogue jobs that are at variance with digital transformation. Big conglomerates have been created by the advent of digital technology and more companies will continue to spring, both big and small, with the advent of digital technology, and all the new companies will create job opportunities for people. Again, new technologies will continue to spring up and what that means is that new business models will spring up and new jobs will be created for people. It is a clear fact that technology will make some businesses and jobs obsolete, but the truth is that the same technology will create new jobs to replace the obsolete jobs and businesses. The new businesses that will be created by digital technology, needs human beings to manage them. So there are huge job opportunities that will be created from digital technology. Today, digital technology is helping people to create new jobs that did not exist few years ago and the job opportunities continue to grow. Technology is about solving challenges and making life a lot easier for people and in solving such challenges, new jobs are created. What we need do is to direct our efforts towards digital technology and do the right thing that will enable us create more jobs.      

What are the likely implications of the situation where Nigeria and the rest of African countries do not have sufficient digital infrastructure required to drive digital transformation for job creation?

It is true that Nigeria and the rest of African countries do not have the required digital infrastructure to drive digital transformation and job creation, but Nigeria and the rest of African countries have the population and businesses are springing up and people are thinking of new ways of doing business in line with the digital transformation that is sweeping across the globe. So businesses in Nigeria and Africa are leveraging international infrastructure to build solutions that work in Nigeria and Africa.

Yes, there are implications for not having the required digital infrastructure in place but the challenge cannot continue to linger for life, because both governments and private organisations are making efforts to build digital infrastructure. That we have deficit in digital infrastructure today does not mean it will be there tomorrow. This is where the private sector comes in, to support more businesses to grow.  

You pioneered the launch of Alternative Bank in Nigeria. What has been the success story since its launch and how has the bank impacted its customers?

Alternative Bank was launched in Nigeria October 2023, and since then we have moved from one success story to another. One key success story for us as a digital bank, is about how we have positioned our service offering to the public. We launched with two key ideas that have to do with transparency in handling complaints and in our billing accounts system.. The second key idea is our interest free banking services. The more the customer banks with us, the more we understand the financial needs of the customer and we address them by making money available to such customer. We also offer other essential banking services to our customers.

How will you describe the financing model of Alternative Bank, and what makes the model unique from the model of the traditional banks?

Our financing model comes from the non-interest model, which is a model that is built around transparency. Other banks charge interest rate for loans but it is our financing model to make interest loan free of charge. Anyone that genuinely needs money is taking the money to put into a business or an asset or to address a problem. When we give money, we follow up on how the money is deployed because our banking model is built around the real sector, hence we give money that will benefit the real sector and the economy in general. All we do is to add value to the real sector growth and to the growth of the economy.

Your job, no doubt, connects you with other tech experts of like minds to work as a team. What are some of the prospects and challenges working as a team?

One of the key challenges working as a team is getting the right persons in the team that are committed, willing and understand the team’s goals. If that is not achieved, it means you work with what is available to produce results, which might be tasking if the right set of people is not in the team. As a financial institution that drives the future of the banking industry, we have since realised that we can’t depend on bankers alone to achieve better results. So we went out of our way as The Alternative Bank to recruit people without financial background, but who are experts in their different fields like e-commerce, health, engineering among others. All these formed the different teams that we work with. What we did was to share our common goal with them and make them to understand our vision and mission and that was how we came together to form a formidable team to work with.

Your bank allows customers up to 10 per cent access of their monthly income as interest free credit line. What is the strategy behind such offering and how does the bank cope with it?

So we give such offer to customers that bank with us and we allow them to build up to get up to 10 per cent, from the scratch, and the strategy is simple. We live in a world where customers are increasingly becoming knowledgeable about how their money is being managed. So we are there for our customers to help them grow their finances and we lend to them interest free loan that will make them financially balanced at all times. The strategy is to give to customers, rather than collecting from customers. It’s about helping customers to be in touch with the human side of our financial business.

How robust is your banking app and what are the embedded features that can protect customers from hackers gaining unauthorised access, especially in today’s digital era, where cybercrime is on the rise?

We have made a lot of investments in building our app in order to provide maximum protection to our customers and our business. Our app is so robust that we do not just have the regular banking services, but the app comes with additional features like our unique billing system, interest free loan feature, and several products that are embedded to a hub in the app.

How do you factor in less tech-savvy customers like market women and petty businessmen when developing banking app for financial transactions?

Our app is structured to be extremely user friendly for all categories of users. The app is self explanatory and we deliberately refused to put the sophisticated banking transaction features of the new products on the first page of the app, because we understand that some customers just want to do the basic banking transactions. So if a customer wants to do more of the sophisticated banking transactions, such customer who is already tech-savvy, can log on to our various hubs in the app to carry out such transactions.

Nigeria is perceived as a heavy cash-based nation, despite the different transaction channels put in place to drive financial inclusion. How can Nigeria’s narrative be reversed to a cashless economy?

The challenge with cash handling in every society is that some people still have cash trust issues. Some people will not want to put all their finances online because of their understanding about the security implications around financial service offerings. At The Alternative Bank, we are digital-focused but we still have our traditional banking system with our physical branches for people to get cash. When such customers come to us, we give them cash, but we also talk to them on the need to transact online, because it is cheaper and safer for both the customer and the bank.

The rise in online theft across the globe has dissuaded some bank customers from going online and transacting online. As a digital bank, how will you reverse the narrative?

We are Alternative Bank and we are digital-focused but we still have traditional footprint that enables us to have physical branch network where customers can go and do their financial transactions. To address the fears about online transactions, customers need to know that although online fraud exists, but the banks have them covered. The Alternative Bank has invested so much in network security to address those key issues that are beyond the customers’ control when it comes to safety in online transactions. Customers should know that it is safer to have their money saved in the bank, while they transact online.