E-Payment Review Year End Edition by E-Payment Review

E-PAYMENT REVIEW YEAR-END EDITION

Vol. 08. No. 04 December 2018

PERSON OF THE YEAR

CHATBOTS IN BANKING (LEO, ADA, SAMI, TAMARA, OCTOPUS & OXYGEN)

+ INNOVATION OF THE YEAR

PAYDAY LOAN BY ACCESS BANK

1 /E-PAYMENT REVIEW/ DECEMBER 2018

Also Also Also available available available on on our on our our Mobile Mobile Mobile Banking, Banking, Banking, Online Online Online Banking, Banking, Banking, ATMs, ATMs, ATMs, Banking, Banking, Banking, QuickBucks. QuickBucks. QuickBucks. WhatsApp WhatsApp WhatsApp

22/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

EPAYMENTREVIEW.COM

E-PAYMENT REVIEW Vol. 08 No. 04 | | Dec 2018

EDITORIAL Brown N. Ugbaja Editor Lucy Akokotu Assistant Editor E-PPAN MANAGEMENT Onajite Regha Executive Secretary/CEO

Babatunde Olaleke Communications Manager

Senator Ayo Arise Chairman, Fortunes Games

Lucy Akokotu E-Payment Review Manager Joy Obaji Administration & Membership

Demola Aladekomo Chairman, SmartCity Resorts Plc & Director, Chams Plc

Kushimo Oluwayemi Strategy & Projects Manager

TRUSTEES Adedotun Sulaiman Chaiman, Financial Reporting Council of Nigeria

GOVERNING BOARD Macaulay Atasie Managing Director Nextzon Business Services

Adesakin Folasayo Conference Coordinator / Manager

Tunde Lemo Former Deputy Governor, Central Bank Of Nigeria

Mitchell Elegbe Managing Director, Interswitch Transnational

Niyi Ajao Acting Managing Director, NIBSS Plc Onajite Regha Executive Secretary/CEO, E-PPAN Agada Apochi Managing Director Unified Payments Services Chukwuma Ezirim Head, E-Business First Bank of Nigeria

Kofo Akinkugbe Managing Director, SecureID Stanley Jacob Chairman of the Committee of e-Banking Industry Heads (CeBIH) ALTERNATE BOARD Eme Godwin Head, Legal, Etranzact International Bob Nwojo Head, Card Business, First Bank of Nigeria

Gbenga Haastrup Group Legal Counsel, Interswitch Ochanya Dan-Ugo Chief Risk Officer Unified Payments Services Bami Akinlade Head, Information Technology, SecureID PUBLISHED BY THE E-PAYMENT PROVIDERS ASSOCIATION OF NIGERIA (E-PPAN)

In This Issue December 2018 THE AVATARS OF CONVERSTIONAL BANKING That said, chatbots are on their way to mainstream acceptance. L-R: UBA's chatbot Leo; Diamond Bank's chatbot - Ada; and Stanbic IBTC's chatbot - Sami.

On the cover: Leo,

Simi and Ada.

COVER

4 | To Our Readers

11 QUESTIONS

6 | Olatunbosun Adeboye Chief Operating Officer of ETOP Nigeria

TALKING POINTS

UBA / YOUTUBE - DIAMOND BANK / STANBIC IBTC

9 | Briefing, potential of payment service bank 10 | GSMA on 5G, dashboard 11 | EFInA survey, report, Nnamani winning awards 12 | Western Union bouys MPesa wallet,

The Choice

Celebrating the future | 22

Leo

Poised to alter your view of banking | 24

The interview

Austine Abolusoro on value of AI chatbots | 26

Ada

Hot potato in converstaional banking | 30

The Interview

Robert Giles and Peggy Orji on how

chatbots will change banking | 32

Sami

Smooth flow for the end user | 36

Oxygen, Tamara, Octopus Focussed on further engagement | 37

PayDay Loan

Allowing innovation in lending | 38

The Interview

Chinedu Onuoha on changing access to credit | 18

one API for all, Africa fintech summit, Nigeria travellers survey

FINTECH CONTENT

14 | Reviewing the NowNow wallet

STARTUP NATION

16 | Mahesh Nair, NowNow COO on mobile wallet

E-PPAN EVENT

18 | 2018 fraud conference review

NEFF INSIGHT

42 | Capitalizing on the potential ben-

efits of open banking

THE RISK REPORT

44 | Personal server, vulnerable ATM, fake fingerprint learning, synthetic fraud numbers 45 | Threat level, phishing sites deception, fraud by numbers

TRENDS & TACTICS

55 | Home crypto miner, by the number, money with a mind of its own 56 | Self-checkout store, KFC next-gen kiosks, smart PoS, reloading banks, press and play card

46 | Bank/fintech collaboration

ROUNDTABLE

57 | Swedish crypto, data, NFC in cognac, google Maps banking, stylish wearables, in short

NIBSS FRAUD REPORT

THE GIMLET EYE

50 | Q3 2018 fraud benchmarks

58 | Together on financial inclusion

E-PAYMENT REVIEW (ISSN: 2360-9818) is published every quarter by the E-Payment Providers Association of Nigeria, 1 Rachael Nwangwu Close, Lekki Phase 1, Lagos. © Vol. 08 No. 04. December 2018. All rights reserved. The opinions expressed do not necessarily reflect E-PPAN’s policy. E-PPAN accepts no responsibility for views expressed by contributors. Printed in Nigeria. 3 /E-PAYMENT REVIEW/ DECEMBER 2018

TO OUR READERS

INTERSWITCH / PBS.TWIMG.COM

The varieties of digital ambition IT IS THAT TIME OF THE YEAR AGAIN WHEN WE HAVE TO CHOOSE; to choose the person we believe had the most impact on payment and fintech and banking and the technology behind transactions generally. For the past few years, we have selected this magazine’s Person of the Year based on clear evidence of outstanding corporate leadership. This time around, we decided to focus on genuine, industry changing innovation; the kind that improves access, fully automates workflows and addresses market needs in ways that are novel, practical, sustainable, and cost efficient. Making a choice wasn’t easy because banking and digital payments are constantly evolving within a complex, ever-changing marketplace. A vast majority of those in the Nigerian payment space have exhibited an indefatigable ability to serve the market. Banks have been very impressive. In particular, they have shown a commitment to reimagine banking amid a time of rapid change and industry disruption. That is why we settled for innovations that they introduced in the area of artificial intelligence. Our Person of the Year is Banking Chatbots - the year’s most stand-out technological innovation. This choice is both a recognition and an endorsement. We are pleased with the boldness shown by six Nigerian banks -- UBA, Diamond< Access, Stanbic IBTC, Keystone and Heritage -- in wandering into this unchartered territory at the same time as other bigger banks around the world. It is our way of WHILE CHATBOTS recognizing banks as innovators who take an end-to-end view of the entire consumer ARE JUST ONE PART journey and are committed to improving OF THE NIGERIAN the customer experience. CONSUMERS’ EXPERIWe have seen tremendous evolution ENCE WITH AI, THEY in the banking sector since the internet became mainstream in Nigeria -- the introARE LIKELY TO USHER duction and growth of debit cards, ATMs, IN THE MUCH-NEEDED internet banking, POS and mobile payment. INDUSTRIAL REVOLUTechnology implementation in banking has helped Nigerian banks to cross many TION IN NIGERIA. barriers and customer service has occupied a major part of that journey. Banks are constantly looking at varied ways to make it easy for their customers to reach out to them without coming to the bank branch. Chatbots help them do that and more. The way they are designed, they are capable of assisting any industry with almost anything and everything. The development of AI has been called the next Industrial Revolution. Virtually every industry has been affected by AI and deep learning, and now banks are joining in on the action. What that does for Nigeria is that, for banks, it would automate transactional processes and expand the reach of services. But E-Payment Review endorsed their use today in banking because of what they portend for our future. While Chatbots are just one part of the Nigerian consumers’ experience with AI, they are likely to usher in the much-needed industrial revolution in Nigeria. Our banks have been the leading light in Nigeria’s and Nigerians’ ability to keep step with technology. They have begun to scratch the surface with regard to the potential of AI, machine learning and advanced technology. In a few short years, almost all Nigerian sectors would embrace this trend to boost productivity and processes. We interviewed Austine Abolusoro of UBA, Robert Giles of Diamond Bank and his colleague Peggy Orji to feel out the impact the banks expect from using chatbots for customer service. We also selected PayDay Loan, which Access Bank launched in 2017 as our Innovation of the Year. We honour it because it treats credit as a digital priority. At the heart of PayDay Loan are compelling propositions and aspirations that automate lending decisions for banks and borrowers. Feel free let us know your thoughts on this issue. Thank you.

BROWN N. UGBAJA, Editor

PIONEERING BLOCKCHAIN TECHNOLOGY IN NIGERIA L-R: Dupe Olorunjo, Divisional Head, Corporate Banking, UBA Plc; Prasanna Kumar Burri, Group Chief Information Officer, Dangote Group; Mitchell Elegbe, GMD, Interswitch Group; Maimuna Shonibare of GTBank; Raymond Haruna, Senior Manager at Zenith Bank at the launch of Interswitch Blockchain Service (supply chain financing module). Built and hosted using Microsoft Azure Blockchain technology, it provides a proven security, compliance and scalable cloud platform that accelerates and supports the next generation of blockchain applications. “As the lines between providers are becoming increasingly blurred, users don’t necessarily care about who or what kind of entity the provider is, as long as they can access the services they desire. Understanding mass market customer needs will be the key to success.” - Riadh Naouar, IFC Head, Financial Institutions Group Advisory, SubSaharan Africa describing the customer as the new boss in town.

21, 000, 000

Number of shoppers in Africa in 2017 who helped drive a market valued at $5.7 billion in sales, according to recent figures from the United Nations Conference on Trade and Development (UNCTAD). Kenya, Nigeria and South Africa are said to account for almost half of the e-commerce market in Africa, while Mauritius was highly ranked in the E-commerce Index. POWER UP YOUR MAG! SEND US AN EMAIL

editor@e-ppan.org

If you've got a comment about our stories or an important issue regarding payment simply contact us.

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44/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

Medallion

Communications

Nigeria's Telehouse Carrier neutral data centre and interconnection hub for all networks Medallion operates technologically advanced and secure data centres for the hosting and localization of critical contents and services, and provides the platform for the exchange of telecom traffic (voice, data and video) amongst the different operators in the Nigerian market.

International Gateways Submarine Cables GSM Operators CDMA/LTE Operators Fixed Line / Fixed Wireless Long Distance Providers Metro Fiber Providers ISPs, VAS, Content

Head Office: 8a Saka Tinubu Street, Victoria Island, Lagos Email: contact @ medallioncom.com Phone: +234(0)8033471283 5 /E-PAYMENT REVIEW/ DECEMBER 2018

www.medallion.ng www.medallioncom.com

2018 YEAR-END EDITION 11 QUESTIONS

Olatunbosun Adeboye Chief Operating Officer of ETOP Nigeria on his work in the payments space, strategizing for growth, and his transition from geophysics to IT

ELL US ABOUT YOUR educational and professional journey. I majored in Applied Geophysics at Obafemi Awolowo University with hopes of working in the mining industry but my passion was inclined towards computers, programming and IT generally. A mining company gave me a job right after graduation but I left after a short while to pursue my passion. I joined an IT company and from there moved to ETOP Nigeria as an engineer. Over the years, I have grown through the ranks and have developed my capacity for the job. I am a certified project management professional and hold an Executive MBA from the London Metropolitan School of Business and Management. How would you explain your company’s development and its vision? ETOP Nigeria transitioned from an independent service organization (under Interswitch) to a payment terminal service provider (certified by the Central Bank of Nigeria, CBN). The company’s growth has been phenomenal and driven in part by the its vison of giving Nigerian consumers access to local and global electronic network payments of all types. Also, we have talented, innovative and forwardthinking people working for the company. ETOP from inception has been a leader in payment technology with extensive suites of value-added solutions and many firsts in the industry. At ETOP, the understanding is that value is king.

TWITTER - ALAT

What expertise do you bring to the company to help support its growth? I am a network engineer with skills in system automation. I have taken business courses both locally and abroad to equip me personally with the right kind of knowledge for running the day to day affairs of a company, increasing capacity and strategizing for growth. What is the most challenging aspect of your job and what’s the most rewarding? There are many dependencies for a company like ours to offer good services but being unable to do so because of factors com-

ensuring constant power supply to drive down the operating costs of the network companies. Any funds freed can be reinvested in network stability to create better experience for consumers. In your opinion, how can payment systems be made safer? Typically, hackers and fraudsters prey on the ignorance of account holders. Awareness by account holders of the risks involved will go a long way to reduce the activity of fraud related issues. The payment ecosystem has a role to play - from the regulator to the business owners - to make the general populace aware of the latest methods and trends in fraud. Information on how customers can protect their funds can never be too much. What is one tough decision you have had to make and how did it impact your life? My decision not to work as a geophysicist. Looking back, it’s one decision that had paid off as the joy of following your passion cannot be measured.

pletely out of one’s control can be quite challenging. It is usually a relief though when a solution we designed to address specific issues around payment receives great feedback from clients. The digital landscape is evolving; what trends do you see dominating this change? The online industry is large, complex and volatile. Wearable technology and smart devices are taking over. The mobile industry is improving on a daily basis with the attendant use of their products for payment. Content, often referred to as the “king” in digital marketing, will remain an essential part of any online marketing campaign in the years to come. If a brand wants to be successful now and in the future, it needs to keep abreast of evolving technology and invest in talent that can understand the customer journey and interpret relevant data to form informative insights. Brands that

can adopt and adapt will surge. Looking at the Nigeria payment system, in your opinion, what have we done right and what needs improvement? The CBN and payments systems stakeholders have collaborated since 1993 to advance digital payments in Nigeria. Through the years we have seen frameworks, coordinating work groups, formation of subcommittees, licensing of operators and the cashless policy which crystalized all the good work done over the years. This has led to remarkable achievements and sensitized the populace to the opportunities, gains and possibilities of the industry. Competition among stakeholders helped the industry to see massive growth. Meanwhile, the industry is still in need of good infrastructure. Though network reliability has improved over the years there still is a lot to be done. The government has to stimulate this revolution by

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What are your interests outside work? I enjoy reading and learning about new technology. I am a member of a local group that organizes community service programmes. I play chess because it’s a mind game, and I am learning to play the piano. What is one goal — either personal or professional — that you would like to accomplish during your lifetime? I have been working on a lot of business ideas - some are on paper and others are already transitioning to reality. Being an industry expert, it would be a thing of great joy to create a service that solves an everyday problem for humanity. Given the opportunity, who will you like to meet and why? It has to be Jesus. I'd to talk to him about developments in the Christian church. I would also like to meet Julius Caesar, Johann Wolfgang von Goethe, Aristotle, Buddha and Adolf Hitler. If six of them can get together around a table, the discussion would be enormously fascinating.

7 /E-PAYMENT REVIEW/ DECEMBER 2018

...the next frontier, covering Africa from Nigeria

Since 2005, Nextzon has been offering world-class advisory and consulting services to organizations, supporting them for phenomenal success.

Website: www.nextzon.com

Email: info@nextzon.com

Address: 1 Racheal Nwangwu Close, Lekki Phase 1, Lagos, Nigeria.

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TALKING POINTS BRIEFING

ECOWAS links payment systems West African states are interlinking their payment systems to ease trading within the subregion, Ngozi Egbuna, Director-General, West African Monetary Institute, revealed in an interview at the November IMF/World Bank Annual Meetings in Bali, Indonesia. She said the institute received funding from the African Export-Import Bank to link the systems of English speaking West African countries. When done, it could realize the dream of a regional single currency known as the ECO.

Digits

$60 billion Nigerian telecom industry losses annually to call masking, a process where international calls are terminated as local calls, the Nigerian Communications Commission (NCC) has said.

$500 million Money that Nigeria is seeking from the African Development Bank to help make the ICT sector more competitive, according to Vice President Yemi Osinbajo.

JULIET EHIMUAN -- TWITTER

3% Expected decline in worldwide smartphone shipment in 2018, according to IDC's Worldwide Quarterly Mobile Phone Tracker.

OPTIMIZING FOR IMPACT A set of startups have been named winners of this year's Google Impact Challenge Africa. More than 5,000 submissions were received from Kenyan, Nigerian and South African social innovators for the Challenge and 36 finalists pitched at events held in the three countries in November, with 12 selected as overall winners. The winners received a $250,000 grant from Google.org, while finalists got $125,000. Grant funding totalled $6 million. The three Nigerian winners were a toll-free child helpline established by the Cece Yara Foundation, e-health startup HelpMum for its clean birth kits, and Project Enable Africa, a digital inclusion project. Winner of the People’s Choice Award was Vetsark, which plans to launch a disease surveillance technology to predict, prevent, and control pests and disease outbreaks. Juliet Ehimuan, Country Director, Google Nigeria Tweeted congratulations to the winners, adding: "we look forward to seeing the impact you make with your projects!"

BANKING POLICY REVIEW

Payment service banks' revolutionary potential is no guarantee A UNIQUE FORMAT OF BANKING WILL SOON be birthed as the Central Bank of Nigeria (CBN) plans payment service banks to provide a slate of financial services to unbanked and underserved populations. In October, the CBN released draft set of guidelines in order to introduce the concept to interested entities. What would differentiate these new banks from their ancestors, is in their value proposition of providing a solely technologydriven payments infrastructure. The opportunities and possibilities surrounding the initiative are numerous, especially for financial inclusion, which could witness a tectonic shift in the near future. According to the draft, entities eligible to promote payment service banks include telecom firms (through subsidiaries), retail chains, mobile money operators and banking agents. Leveraging their large ubiquitous presence, each of them could go on to achieve the ambitious goal of providing digitally driven financial services to places where commercial banks are unable to reach. Payment service banks would allow Nigerians to open accounts, deposit and withdraw funds, as wll as offer access to payments services small businesses. All of this shall be covered by the Nigerian Deposit Insurance Scheme. It would change the habit of keeping cash at home and revitalise the cycle of money and income, by making micro-savings a reality. 9 /E-PAYMENT REVIEW/ DECEMBER 2018

They will also install Automated Teller Machines, operate electronic wallets and support remittance services while their account holders will be issued debit and prepaid cards. However, a payment service bank will not be allowed to give any form of loan or credit or guarantee. They will not trade in the foreign exchange market or underwrite insurance. Licensing requirements include a non-refundable application fee of N500,000, minimum capital of N5billion and non-refundable licencing fee of N2 million. All the major telecommunications service providers -- MTN, Airtel, 9mobile, Ntel , and Globacom -- have indicated they would be willing to be part of the plan. Rob Shuter, CEO of MTN Group, while addressing a conference in Cape Town, South Africa in November said his company will apply for a licence with plans to launch the service around the second quarter of 2019. While the underlying potential of payment service banks is enormous, there are significant shortcomings associated with it too. For starters, the impact of these banks is not guaranteed. They will face the same hurdles as any financial services provider that aims to serve the country’s low-income, rural communities. As some analysts have pointed out, if it were simple to serve these customers, Nigeria's other efforts – in microfinance and mobile money – would have met with more resounding

NIGERIACOMMUNICATIONSWEEK

2018 YEAR-END EDITION TALKING POINTS

success. Concerns have been raised about the draft guidelines and how its requirements will enable the entities that will emerge to live up to CBN's ambitious goals. Those who intend to invest in payment service banks will have to deal with an assortment of challenges. They have to decipher regulatory nomenclature, locate capital, find right talents, lead behavioural changes, and embrace new thinking and innovation. The CBN's stringent rules for these banks will make it all the more difficult for them to turn a profit. Most worrisome is the specification that they cannot lend. The Association of Telecommunications Companies of Nigeria wondered out loud about this restriction. “The justification for the minimum capital deposit is unknown. However, when compared to the capital requirement for national microfinance banks (MFBs) and mobile money operators which are currently fixed at N2 billion, it is our view that the figure is excessive, particularly bearing in mind that national MFBs have a wider service bouquet,” said Gbenga Adebayo, chairman of the association. Many analysts have said that N5 billion is too much capital to require for something lower than a microfinance bank. With N2 billion capital requirement, a microfinance bank can issue cards and maintain ATMs. It can grant loans and buy treasury bills, FGN bonds, commercial papers and corporate bonds. One of the prime motives for establishing these banks is to provide universal access to banking. They will operate like any other bank, but they are expected to reach customers mainly through digital methods rather than traditional bank branches. Yet, their customers will not have access to credit. Meanwhile, the banks would be required to invest 75% of their total deposits in government-linked securities and treasury bills. Hence, it is unlikely that they would be in a position to profit from deposit services since they would have to pay an interest per annum on savings account. Even though they are allowed to raise deposits, this may not be sufficient for them to fund their expansion. And with cutthroat competition, acquiring customers will be a substantial challenge – as will be maximizing revenue per customer. So they will need deep-pocketed, risk-taking investors willing to be in it for the long haul. Language in the draft said that the banks will “operate mostly in rural and unbanked areas,” as defined by the CBN. This means that only the CBN can determine what area can be defined as rural. This in itself is problematic. Nigeria's penchant for developing without urban planning means that we have rural communities framing cities and their very nature could be lost in translation when borders are being defined. Rural in itself is challenging. The only medium of operation for these banks is the internet. Nigeria is struggling with very low internet speeds and this gets worse the more interior you go. This may hinder the growth of these banks. Furthermore, since they are entirely technology-based without any significant physical presence, the banks may appeal chiefly to customers who are tech-savvy. Many in rural areas will find it difficult to participate in this type of banking system. Besides, it will be critical to have the right set of skills steering payment service banks efforts. Finding staff with knowledge of how to manage a hybrid of banking and distribution with a running thread of technology will be hard in rural areas. Without the right mix of people, they may become a juggernaut hurtling towards failure.

LICENSING FRAMEWORK

GSMA highlights why Nigeria should lead Africa in 5G adoption MODERNISING REGULATION AND policy reform will be crucial to boosting Nigeria’s digital economy and accelerating internet access through increased mobile broadband penetration, a report by the Global System for Mobile communications Association (GSMA) has said. The report, Spotlight on Nigeria: Delivering a Digital Future, was launched at a GSMA event held in conjunction with the Nigerian Communications Commission (NCC) in Abuja in November. Mobile industry leaders and policymakers were there to discuss future regulation and enabling next-generation of 5G connectivity. The GSMA research showed that the mobile industry added $21 billion to Nigeria's GDP in 2017 and created over 500,000 direct and indirect jobs. It observed, however, that in spite of more Nigerians getting access to mobile broadband, the country lags regional peers in 4G adoption. It said accelerating adoption would enable more advanced services. With increased spectrum harmonisation and licensing reform, mobile penetration in Nigeria is forecast to rise to 55 percent of the population by 2025, with 70 percent having 3G connectivity and 17 per cent having access to 4G networks. Currently, only 44 per cent of Nigerian subscribers use 3G while 4 per cent are using 4G, compared to over 18 percent 4G penetration in South Africa and 16 percent in Angola. “For Nigeria to take full advantage of the next phase of its digital transformation, it’s vital that collaboration between industry and government enables the right policy environment for millions more to benefit from ultra-fast mobile broadband" said Akinwale Goodluck, Head of Sub-Saharan Africa, GSMA. "If policies don’t keep pace with the needs of society and technological innovation, there is a risk that citizens will be left behind and productivity and competitiveness will suffer.” The GSMA said changes in the market and technologies have resulted in a licens-

Prof Danbatta ing framework that could benefit from a review and update. It said the harmonisation of 1427-1518 MHz and 3.3–3.6 GHz, band and making them available to mobile operators will be a core component in reinforcing Nigeria’s position as Africa’s leading mobile market. Same as utilizing Nigeria's active participation in the International Telecommunications Union (ITU) World Radiocommunication Conference 2019 process to lead Africa in identifying new bands useful for 5G. Meanwhile, the NCC has suspended the allocation of frequency spectrums that are likely to be approved by the ITU for 5G network services. Prof Umar Garba Danbatta, executive vice chairman of the commission explained that while the 5G framework is still being defined by the ITU, the NCC has identified some of the potential frequency bands that may be harmonised for 5G deployment in region one and therefore suspended the licensing of those frequencies. Those affected are the 26GHz, 38Ghz and 42Ghz bands. The NCC is putting in place necessary regulatory frameworks to help it ride the wave of the imminent 5G evolution, he told a consultative forum on 5G readiness and High Altitude Platform Station Technologies (HAPS) in Abuja.

DASHBOARD

$565,000,000,000

How much the mobile industry could add to global GDP between 2020 and 2034 if governments provide necessary support for 5G services, according to the GSMA. In a new report, the association said the industry has the potential to deliver 5G services across different industry sectors, improving access to healthcare; education; and mobility, resulting in the addition of $152 billion in tax revenue over the 15-year forecast period. However, these results will rely heavily on government support to identify and harmonise sufficient mmWave spectrum for the industry, particularly at the ITU World Radiocommunication Conference in 2019. The report noted that new mmWave bands for mobile are set to be discussed at WRC-19, and the GSMA recommends supporting the 26GHz, 40GHz and 66GHz to 71GHz bands.

10 10/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

EFINA INSIGHT

Financial inclusion drives digital payment up 16% in 2018 FINANCIAL SECTOR DEVELOPMENT ORGANIZAtion, EFInA has found in a new survey that digital payment use increased significantly from 12 per cent in 2016 to 16 per cent in 2018, propelled in part by the deepening of financial inclusion. The survey explained that the main barriers to financial inclusion remain lack of product/services awareness and knowledge, institutional exclusion and affordability. “Banked population went up by 1.4 per cent. The growth has been driven by transaction products. A number of adults relying on informal mechanism only increase significantly – as more. Adults move into informal employment. Payments are mostly cashed based, driven by the size of the informal sector,” the survey report said. There as continued measure of financial inclusion

and usage aligned with the revised NFIS. There was also continued policy and regulation that responds to market innovation. Unveiling the report in a ceremony in Lagos, EFInA's CEO, Esaie Diei, said the survey would help stakeholders understand the state of affairs in the financial services sector and what needs to be done. He said that EFInA in partnership with key stakeholders would ensure the country meets the target of reaching full financial inclusion by 2020. Diei expressed hope that regulators would take key issues raised by the report into consideration in creating policies and regulations in order to meet the target, adding that despite the progress identified by the survey, concerted effort is required from all stakeholders to push through the goals of financial inclusion.

AWARD WINNER

CWG / AFROGLOBAL TELEVISION / ITPULSE / COMMUNICATION WEEK

Nnamani receives multiple prestige for telecom work IKECHUKWU NNAMANI, CHIEF Executive Officer of Medallion Communications climbed different stages multiple times this year to accept hardware for his contribution to the growth of the telecoms and ICT industry in the information technology space. The honour was from several national and international groups. He received the 2018 Enterprise Award at the Afroglobal Television Excellence Awards gala held at the Royalton Hotel in Toronto, Canada. Presented by Silvertrust Media and Afroglobal Television, the annual award seeks to identify and recognise deserving individuals, organisations, businesses, and agencies that make profound differences in society. Nnamani was honoured for his work in promoting telecom connectivity and local content development. Weeks before, Nnamani was honoured as the Telecom and ICT Personality of the Year at the Nigerian Tech Innovation and Telecoms Award (NTITA) while his company was named the ‘Telecom Solutions Provider of the Year’ and ‘Data Center Provider of the Year’ for championing innovation andin Nigeria's telecom industry. Also this year, Medallion was adjudged ICT Clearing House of the Year at the Beacon of Information and Communications Technology Awards, organized by Communication Week Media, in Lagos. Nnamani who was this magazine's 2017 Person of the Year also

Appointments

CWG

Beginning January 1, 2019, Adewale Adeyipo will assume office as the Acting Managing Director/Chief Executive Officer of CWG Plc. He is replacing James Agada, who ends his three-year tenure, December 31. Prior to his appointment, Adewale was executive director, sales and marketing. He has computer science degree from the University of Ilorin, is an alumni of Lagos Business School, and has Management and Leadership trainings, and certifications from Business School, Netherlands; MIT and the London Business School. VISA

Aida Diarra has been announced as Senior Vice President and Group Country Manager for Visa Sub-Saharan Africa. She was formerly the Regional Vice President for Africa and Managing Director at Western Union for more than four years. Diarra will oversee all Visa operations in fortyeight markets across SubSaharan Africa. FLUTTERWAVE

Clockwise from up: Ike Nnamani receiving the Enterprise Award from Monaruz Zaman of The Bullion Mart with his daughter, Kayla; posing with his laurels at the NTITA awards; receiving Best ICT Clearinghouse of the Year award from Leo Stan Ekeh, chairman Zinox Group.

graced the cover of the 2018 Top 20 CEOs edition of ICT Watch magazine and was listed in the Top 100 ICT Contributors in 15 years. “What these awards have shown to us is that the industry is watching us and have recognised our little contribution to the growth of the telecom industry. We will con-

tinue to provide services that will boost the growth of the industry because to whom much is given, much is also expected,” Nnamani said. He dedicated the awards to the staff of the company, whom he described as resilient, innovative, and creative.

11 /E-PAYMENT REVIEW/ DECEMBER 2018

Flutterwave co-founder, Olugbenga Agboola, will replace Iyin Aboyeji as CEO of the company. He is a financial technology engineer with core financial services technology experiences with Paypal, Google, GTBank, Access bank, Standard / Stanbic IBTC Bank. The company says Aboyeji stepped down to pursue family goals. RENMONY

Fintech lending platform, Renmony, has appointed Oluwatobi Boshoro as its new CEO. She was formerly Head, Digital Strategy, Issuing and Service Management at Stanbic IBTC, where she also headed the bank’s Electronic Banking and Digital Strategy.

2018 YEAR-END EDITION TALKING POINTS

AFRICA FINTECH SUMMIT

Digital enterprise is Nigeria’s path to new growth

NEW DIGITAL IDENTITY L-R: Dr. Frederick Igbinedion, Chairman; Ernest Uduje, MD/CEO, Ibiyemi Okuwoga, Head Sales and Marketing, and, Sanusi Segun, Senior Software Developer, all of Itex Integrated Services during a press briefing at Four Points by Sheraton Hotel, Lagos to announce the company’s expansion.

MOBILE TRANSFERS

ITEX

Western Union unlock global pay-outs for M-PESA mobile wallet IN WHAT HAS BEEN DUBBED A GLOBAL-FIRST, WESTERN Union will power Safaricom, Kenya’s leading mobile network operator and provider of M-Pesa to scale money transfers to more than 200 countries and territories for more than 28 million mobile wallet holders. M-Pesa Global, a newly optimized feature will allow customers to send money from their wallet for pay-out across the Western Union retail agent network or directly via its access to billions of accounts. M-Pesa has revolutionized financial inclusion over a decade by enabling millions of Kenyans to receive money from abroad, store and send money or make payments locally, and leapfrog traditional infrastructure. Its wallet holders already have the option to receive money from around the world via Western Union. “We believe this breakthrough collaboration with Safaricom will spur a world of new possibilities for mobile financial service operators to directly scale globally and provide customers with choice to send or receive money to and from more than 200 countries and territories," said said Odilon Almeida, President, Western Union Global Money Transfer It will become a model for opening a world of global connectivity and economic opportunity for emerging as well as developed economies.” Safaricom has helped millions of Kenyans establish financial services on mobile wallets within Kenya. More than 1.7 billion transactions are processed over M-PESA annually, equivalent to more than 50 percent of Kenya’s GDP value. “By opening up M-PESA to the world, we aim to enable a world of opportunity for Kenyans by making it easy and seamless for them to connect with the world,” said Sitoyo Lopokoiyit, Chief Financial Services Officer at Safaricom. Western Union’s cross-border platform processed around 32 transactions every second and $300 billion across 130 currencies in 2017. 1.7 billion transactions are processed over M-Pesa annually, equivalent to over 50% of Kenya’s GDP value.

Single API for Africa

Digital payments provider Cellulant, has plans to build an API for Africa’s payments companies to use to grow eCommerce and improve cross-border remittances on the continent. Speaking at the CIO 100 Symposium held in Naivasha Kenya, Felix Nthiga, GM Cellulant Kenya said there is a need for collaboration instead of having players building silos on their own.

10 Years

Anniversary celebration marked by IT and project management consulting firm, Digital Jewels since it started offering services to a diverse African market.

BB + stable

Rating assigned to owners of loan platform Paylater, One Finance, by Global Credit Rating making it the first African fintech company to get a credit rating. The rating will increase the transparency and credibility of Paylater.

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NIGERIA'S ECONOMIC FUTURE would be built on digital enterprises and not on oil. Leland Rice, chief executive officer of Dedalus Global and founder of Africa Fintech Summit, stated this at the summit held for the first time in Lagos. “The overall level of investor capital, political will and collaboration around technology in general reflect a growing awareness that Nigeria’s future will be built not on oil and industry but on digital enterprise,” he said. “Let’s be clear-eyed for a minute though. There’s no doubt that Nigeria’s infrastructure and policy gaps hinder fintech growth. But in many ways, they also fuel the innovation fire.” Over 50 speakers and 500 finance professionals, tech enthusiasts, investors, and regulators gathered at the summit to discuss technologies transforming finance on the continent, debate regulatory policies, compare best practices, and forge new ventures. It featured panel discussions on emerging technologies, payment innovation and regulation, blockchain, investment, lending, and financial inclusion in Africa. DIGITAL TRAVELLERS

Research reveals how tech savvy Nigerians travel NIGERIANS ARE CONSIDERED among the most proficient in utilizing apps for travel purposes, based on data from Travelport, United Kingdombased travel commerce platform's Global Digital Traveller Research 2018. The report surveyed different digital traveler habits, with 16,200 respondents participating from 25 countries. Nigeria came fifth while India topped the list for the second consecutive year. Indonesia, Brazil and China ranked second, third and fourth, respectively. Most of the respondents said they considered digital devices vital for travel. “Nigerian travellers are heavily reliant on their mobile phones. 85% of travelers in Nigeria were shown in the study to use their smart phones when researching their trips, and 78% use their phones to make bookings," the report said. Meanwhile, 72% of travellers in Nigeria have used a digital wallet or payment app (e.g. Apple Pay, Alipay, etc.) at some point while travelling, while 31% use them all the time.

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2018 YEAR-END EDITION FINTECH CONTENT

Mobile wallet ecosystem and adoption in Nigeria Integrating NowNow mobile wallet into Nigeria's spending ecosystem will create a robust and powerful user experience.

SCANNEWS / YOUTUBE -MASTERCARD

he Nigerian Wall Street has come to accommodate financial technology (fintech) because of its undeniable impact on the financial sector. It is easy for some people to mistake the mobile money sub-sector as the only arm of fintech. Though it is a major focus, fintech also has its place in insurance, lending, crowdfunding, blockchain, investments and wealth management. It will continue to grow and the financial sector must adapt to the change it brings. In Nigeria, fintech has gone mainstream with a deliberate intent to solve the problem of financial exclusion. Nigeria has about 5500 bank branches serving 190 million people, though 40 percent of that population are young people. The financially underserved population and the problems of excess cash usage have become major concerns for a country looking to be one among the 20 strongest economy in the world by 2020. Financial exclusion is particularly heavy in the rural areas of developing countries, because people there usually donâ&#x20AC;&#x2122;t have easy access to banks and other financial services provider. When they do have, certain requirements of the banks like minimum deposits keep a majority of residents of the community out of the system. Also, other banking facilities like ATMs are sparsely located in these areas and are not usually functional enough to serve the locality. That is why, one of the initiatives of fintech is to achieve financial inclusion and ensure that even the remote areas benefit from financial services. The mobile wallet ecosystem In developing countries like Nigeria, cash is still the most preferred payment method. However, the need for speed and convenience has triggered the rapid creation of alternative payment methods and instruments worldwide. New technologies like mobile wallets give room for more options to carve their niche in the market. Mobile wallet in particular is growing in relevance. Usually referred to as e-wallet, its definitions, now include an allusion to it as a digital equivalent of the leather cover around all your cards and other content in your physical wallet. It is also described as a licenced stored-value account for electronic money. We define an e-wallet as a digital tool or app for consumers to store their digital money or value. An e-wallet allows someone to make electronic transactions with an improved checkout and payment experience online, compared to

Sahir Berry, Chief Executive Officer of NowNow.

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keying in all payment credentials every time a purchase is done. Wallets can function in online and physical stores. Mobile wallet is digitized cash made accessible on a mobile device. It is no different from the money held at the bank. Mobile wallet is the value stored in the mobile wallet, the mobile wallet is the bank account or better still the container holding the content. These terms are often used interchangeably but is very erroneous. With this explanation the mobile money can be circulated with the ecosystem using the mobile wallet. NowNow Nigeria NowNow was introduced into the Nigerian market to tackle the cash build-up in the system and to create a means whereby financial services are available to all. Although, the banking sector in Nigeria is not easily accessible to everyone, the telecommunications industry has been more successful in reaching a large portion of the country’s population. The collaboration of both the banking and telecom sector has given rise to mobile banking platforms like NowNow, where a user can perform basic financial transactions with the use of a cell phone. NowNow is a digital wallet on a mobile device where you can store value instead of on a debit card or cash. Merchants are always saddled with innovating ways to meet the ever changing demands of customers. One of the most important parts of attracting customers is providing them smooth and convenient payment options. The need and the desire for greater security around payment is where NowNow mobile wallet makes a difference. One can perform a smaller transaction without exposing his or her entire bank account, a major vulnerability in the use of debit cards. NowNow wallet can be used by anyone even without a bank account. All they need is simply cash-in the wallet at an agent point and use it for online or offline transactions. Wallets are very popular in the western world especially when transacting through large payment companies like Amazon Pay, Paypal, GooglePay, PAYTM in India. Major card companies like Mastercard and Visa are also moving towards digital wallets with such services as MasterPass and Visa Checkout. The declining trend in the use of cards and increasing usage rate of wallets could be why. There's a reason so many digital wallets have been developed: customers love them, especially online shoppers on mobile devices because they only need either their fingerprint or a simple PIN. Additionally, no information is passed directly to the online store; instead, the digital wallet completes the transaction through secure tokenization. And even if the customer doesn't feel that security is an issue, there's still the inconvenience of needing to manually type a long series of numbers and address details into a form — which can be maddening on a phone. Instead, a few quick taps are all that's needed. NowNow digital wallet is a solution for many Nigerians, whether they shop offline or online. It eliminates the need to use debit/ATM cards, and the hassle of carrying cash. They can complete their purchases using a device they already

carry with them all the time, their smartphone. The advantages of digital wallets like NowNow to online companies But what does this mean for merchants? First off, they should seriously consider accepting some form of digital wallet as an alternate payment method. Mobile commerce is growing every day, and in Nigeria current estimated number of smartphone users are 20 million and projected to grow to 30 million by 2020. This should give merchants the opportunity to provide their customers with a quick and convenient mobile checkout experience. People want to shop on their phones. 46% of all ecommerce traffic originates from mobile devices. But only 27% of that traffic leads to actual conversions, which could mean that many customers try to shop from their phones but can't do so effectively in most cases. The smartphone conversion rate is as low as 1.3%, with a poor checkout experience being a major factor. NowNow digital wallet addresses these checkout issues and its use by merchants to triple their mobile conversion rate. NowNow allows customers without bank account or debit card to fund wallets at a nearby agent location or by walking into a bank and start shopping online and offline merchants. Such unmitigated access would allow online merchants to tap a major unbanked segment. With NowNow wallet, customers are able to deposit money, transfer money to accounts held in banks, purchase airtime, pay utility and cable bills, and make payments to offline and online merchants. NowNow is an electronic account linked to a mobile phone number, this means the wallet number (account number) will be the same as the phone number where the wallet is domiciled. The market for mobile wallets is large especially as Nigerians continue to favour cash in their transactions. NowNow’s aim is to change this through the creation of an ecosystem that allows money to flow from a wallet to wallet on a mobile phone. That is why the company is increasing the number of agents within neighbourhoods in Nigeria as a way to give anyone with or without a bank account a convenient way to enjoy financial services. In Nigeria, the mobile wallet does not yet have the same kind of popularity it enjoys in other countries. However, a NIBSS report showed that the total number of mobile money users stood at 2.3 million in 2017, which is less than 37.3 million in Kenya, and 11.119 million in Ghana. The growing relevance of mobile money paves the way for the mobile wallet as a welcome addition to the Nigerian payment ecosystem in helping to solve the problem, that for the most part, financial institutions have failed to solve for consumers and even the government.

Adoption in Nigeria With all of the benefits attached to the mobile wallet, the reality is that the payment system still has a long way to go. There is a significant reluctance among consumers to convert to mobile wallet and their reasons border on a miscomprehension of its value. From the consumer’s perspective, some are not aware of the problems mobile wallets solve? Others are unwilling to adopt it because they don’t like change and see little need to switch to a different payment method unless the benefit is made very apparent. Many are already accustomed to using debit cards and consider them to be convenient. That explains why cards are still the most popular method of payments in this part of the world. This has been an ongoing battle but far from winning it, steady progress is being made. One of the major obstacles stopping the wholesale adoption of mobile wallet in the country is awareness. Many Nigerians are not aware of the existence of the mobile wallet; some who have heard of it do not necessarily understand what it actually does. In contrast to traditional banks, which are well-established and known in Nigeria, Nigerian consumers lack clear understanding of the benefits they could get from using mobile wallets. And these are the people the product was made to serve. NowNow is going to change that. It would give out reliable information about how mobile wallet works, the cost of transactions, and the type of phones needed to enjoy the services. NowNow understands that there is a compelling need for mobile wallet providers to both raise brand awareness through additional advertising and conduct educational campaigns to inform users about the transaction process, product availability, key features and service reliability. Focus group results have shown that trust in traditional banking services is underpinned by people’s perceptions of banks as institutions with proven financial services history, established brands and a physical presence that provides reassurance. But still, the USSD services offered by banks are deemed vulnerable to fraud and poor quality of service. Many focus group participants reported being victims of fraud, overcharged for services, airtime credits “disappearing” from their total balance and being charged for no reason. These are problems that do not occur with NowNow mobile wallets. In fact, there are no hidden charges or maintenance fees unlike banks. To conclude mobile wallets are the way to go for the Nigerian market especially with the boom in smartphone users and online shoppers. Merchants will reap the rewards of increased mobile conversions, and earn the customer loyalty that comes from convenient payment experience.

NOWNOW WALLET CAN BE USED BY ANYONE EVEN WITHOUT A BANK ACCOUNT. ALL THEY NEED IS SIMPLY CASH-IN THE WALLET AT AN AGENT POINT AND USE IT FOR ONLINE OR OFFLINE TRANSACTIONS. 15 /E-PAYMENT REVIEW/ DECEMBER 2018

2018 YEAR-END EDITION STARTUP NATION

Mobile wallets are better tools for financial inclusion Chief Operating Officer of NowNow, Mahesh Nair, on the ubiquitous nature of his mobile wallet and how reaching a new set of unbanked customers requires the country to ride on the system. BY BROWN N. UGBAJA

ELL US ABOUT NOWNOW. NowNow is a product of Contec Global Infotech Limited and we are basically into financial technology (fintech). The flagship product is NowNow, a mobile wallet that can be used by any payment consumer. Anybody with access to basic payment channels like a smartphone, credit card, debit card and internet can access this wallet and perform all kinds of transactions like bill payment, money transfer and so many other things. The purpose of this wallet is to move people away from cash to easy digital payment. Nigeria is a cash economy and we lack the kind of market infrastructure that ensures the use of electronic payments. We want people to stop carrying leather wallets and start carrying only their mobile phones because that will be the wallet for the future. We are trying to build up a huge subscriber base where we have wallet users in the market then we go to offline merchants, small and medium enterprises including kiosks, to tell them that a POS may be expensive to obtain from banks because they may not be able to recover the cost, instead start accepting payments using NowNow App. We give you a QR code or your unique merchant I.D number so that customers can use the wallet to transfer the money via the QR code or the merchant number. The reason we came up with this idea is to create convenient and safe payment methods for everyone that does not involve cash. We are focused on building user network that includes service providers, merchants and the consumers. Everybody is salivating over mobile payment and financial inclusion these days.Why do you see NowNow as a solution to the problems? Here is why. In Nigeria, 60% of the population do not have bank accounts, so we are building up a user network to enable people to do different kinds of payment like any other mobile payment company. But the larger focus is to build up the user network so that more and more consumers will be able to migrate to the wallet if they do not have bank accounts. The advantages are numerous. Today, the focus of mobile money operators is to build up the agent network with hopes that this would bring financial inclusion. But still they are not bringing these people into the banking ecosystem because at the end of the day they still don’t have bank accounts. They use mobile money agents to perform transactions

and it ends there. But with NowNow, we are in the position where wallet users can actually do easy cash in and cash out transactions on their own without an agent doing it on their behalf. Students that do not have bank accounts can use it to receive money from their parents and spend the money without converting it to cash. They’ll just download the consumer wallet on their phone, do the registration, get a wallet I.D number with which parents can deposit money into the wallet, and they can perform any kind of transaction. There was a student who was a social media entrepreneur and who wanted to do some digital marketing. When he came here, his biggest challenge was how to buy Facebook credits with which to perform transactions. Going through the bank was too rigorous for him. He used our consumer wallet to do that easily. The wallet has provision for Facebook, Google, Skype credits, etc and all those credits are available to everybody even those who don’t have bank accounts. Explain the way NowNow payment works to me like I’m a 10-year old. What are the features of the service? NowNow as a consumer platform is very simple and easy to use. What you need is an android phone through which you can download the app from Google Play Store. You will need to create a profile with your name, mobile number and email address then you’re onboard as a consumer. Our other focus is to build up an agent network where people can walk into the branded shops and perform cash in and cash out transactions. We want to enable a situation where NowNow users can receive money through the wallet and go to an agent to cash out. Our idea is different on this. Everybody is focusing on the agent network but they want to offer unbanked kind of banking system to consumer, nobody is trying to convert them and bring them into the banking ecosystem. Financial inclusion is about encouraging people to have either a bank account or a mobile money account. It offers them convenience and privacy. This is very important and it is actually the objective of our CEO Mr. Sahir Berry. He has structured Nigeria’s first mobile phone manufacturing plant in the form of AfriOne, which are available at affordable price to everybody. We have the NowNow wallet and data is affordable, this completes the financial inclusion ecosystem. 16 16/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

The second step is to fund the wallet, which you can do with a debit card (there are no charges for funding the wallet). There are various types of services available on the platform such as airtime recharge, bill payment, money transfer and peer-to-peer transfer. You can transfer money from one NowNow user to another. Other services are available such as iTunes, Facebook, Skype, DSTV, and a lot of bill payments you can think about are presently available and we are trying to add more merchants. NowNow allows people to split payment, for example a restaurant bill or any other thing. One of them can settle the bill and the others will pay back using the NowNow wallet. People without a bank account can use it to receive money and cash out at an agent location. You can still fund the wallet through an agent - pay him cash, give the wallet I.D and the wallet will be funded. However, this is for a KYC level 1 customer. If you want to use some services, the app would require you to upgrade to KYC level 2 and that means you have to submit documents like national I.D card or driving license. Presently, we have more than 125, 000 customers who have downloaded the app and are using it. We want to build up the subscriber base to 10 million, once we have that, we’ll see lots of merchants using the NowNow application. Our objective is to offer payment services at a more sustainable cost compared to any other mobile money operator, our commissions are very competitive in the market. Outside competitive pricing and the outlook of transitioning more people into owning accounts, how else does your service differentiate itself from your competitors, or current alternatives? The primary focus is converting the mobile subscribers to financial subscribers. Every payment platform now has an agent network and lots of transactions are happening but the people still remain unbanked. We want everybody to belong in the financial ecosystem; to perform transactions by themselves and be able to interact with any service provider he/she wishes to. If a person wants to transact online, he/she can do so without having a debit card or a bank account. We are creating a wallet user network which doesn’t need a bank account. We want people who are skeptical about going to a bank to still have a way to transact digitally. Some people are not comfortable with bank protocols and they believe that they are going to be charged unnecessarily. The wallet does not have any of those kind of charges. You do not pay anything for wallet maintenance, you only pay when you use services. The other important difference is that we offer cash back for every airtime recharge and other services. The agenda is you perform transactions, you earn cashbacks, coupon codes and loyalty rewards. What are the biggest challenges you have faced while launching the service? And what are your current challenges in scaling NowNow to the next level? The initial challenge was to actually get the

DITCH CASH AND PLASTIC: Mahesh Nair Chief Operating Officer of NowNow Nigeria. The mobile wallet allows you to make all your payments in one place and gives you cash back on transactions.

ORADIAN

license because there was a regulated mechanism on getting the license. There were multiple assessments to determine whether the company meets the minimum requirements that Central Bank of Nigeria (CBN) has put in place for mobile money operators. The CBN was very cooperative and they helped us run through the complete process of what was needed in accordance with the law of Nigeria. The integration of NowNow with the telcos and other payment platforms took us some time. The biggest challenge we have and are still working on is getting more people to sign up and use the service. The wallet maybe in its early stage for Nigeria but we are seeing good progress. We are seeing a steady increase in the number of users and the number of transactions. How are you building trust? How can a first time visitor trust your service? When it comes to trust, the user needs to confirm we are a fintech company in the market, we are licensed to deploy this service. We went through the entire process defined by the regulator to get the license to operate as a mobile money service provider and Iâ&#x20AC;&#x2122;m sure the regulator is very confident that this is a company that can be trusted to offer services that are demanded by consumers. That should be the biggest trust factor that people should understand. And of

course, the platform is very secure so you do not have to worry about it being hacked by somebody or any kind of fraud activities happening on it. All safety and security measures required for payment systems as per global standards are in place, we also strive to maintain best payment practices. How are you marketing the service? Presently, we are marketing it more on digital media. It is a mobile platform so we meet users where they are. We are working on partnerships that will enable us to promote this in the corporate space, university environments and the interiors. We have held student events at some university campuses and in places like Computer Village. Retail marketing is needed to promote and help people understand the purpose of the wallet, how it can be used and how it can make life better. Can you describe the significance of Nigeria as a market as part of your growth roadmap? If you look at our background, the parent company known as Contec Global has always been helping to bring quality technology in Nigeria. We have worked on projects in areas like immigration and transportation. In the Middle East, India and a couple of Asian markets, telecommunication companies are using our technology as 17 /E-PAYMENT REVIEW/ DECEMBER 2018

a backbone to run mobile money operations. So this is not new to us. We have been in this market running this technology for a couple of years. This is our first market where we agreed to launch this product as a retail service provider. We see a lot of potential in Nigeria with a population of about 190 million, we feel that a lot needs to be done in the fintech space. The mobile wallet is just the beginning but the long term objective is to bring more innovative fintech products to the market which can be useful to the common man and at the most affordable prices possible. Today, there are lots of fintech and mobile money companies but we want to innovate things and come up with products that are useful to people. The market is huge and there is a lot of potential to build the fintech ecosystem in Nigeria. What milestones do you have for the company in the next year? In the next six months, the focus is to build up a good subscriber base and a good agent network where people can do transactions. In about two years, we will focus more on building up online and offline merchants where NowNow payments can be accepted. We also plan to integrate with other existing ecosystems so that we donâ&#x20AC;&#x2122;t work in isolation. The vision is to build up the largest fintech ecosystem in Nigeria.

2018 YEAR-END EDITION E-PPAN EVENT

MITIGATING FRAUD RISK THROUGH STRONGER COLLABORATION The 9th annual Payment Systems and Fraud conference oconcluded that increased collaboration between operators and regulators; consumer education and improved capacity development are panacea to payment fraud. BY LUCY AKOKOTU

S MOBILE BANKING GAINS prominence and customer service expectations continue to drive electronic payments, the fraud landscape is growing wider and becoming a costly issue in the digital age. The banking and payment industry is experiencing fraud at an increasing frequency and with devastating amount of losses. Documented figures show the payment system lost about N119 million to fraud in just one quarter. The industry, however, can combat fraud and halt these losses if stakeholders cooperated among themselves to by sharing ideas and insights and creating cutting-edge responses to fraud threats. These were the sentiments brought to life at the 2018 Annual Payment Systems and Fraud Conference put together by the E-Payment Providers Association of Nigeria (E-PPAN) in November. Speakers at the event held at the prestigious Civic Centre in Victoria Island, Lagos – at different sessions – opined that in the digital age collaboration was crucial in fighting fraud. The 215 people who attended agreed. The pointed out that in an interconnected world, fraud has grown more intricate, more insidious and, harder to mitigate. They expressed a belief that working together would be really crucial in having a clearer picture of how these criminals work and enhancing efforts deployed against them. In a welcome address, Adedotun Sulaiman, Chairman, Board of Trustees, E-PPAN, spoke of how digital transformation has exposed the industry to a range of cybersecurity challenges. He said that for organizations in the ecosystem, payments and fraud are happening in real time, and that the slightest error could lead to loss of money and reputation. “Consumers have loved the speed and convenience that e-payment services provide but the criminals also like it or they may even like it better,” said Sulaiman, who is also the chairman of the

Financial Reporting Council of Nigeria. “According to Nigeria Interbank Settlement System (NIBSS) second quarter report for this year, the payment system lost about N119 million to fraud out of the attempted value of N2.3 billion. This shows that 21 percent of attempted fraud was successful. This fact reveals that we need to do more about the insecurity around our national e-payment system.” He said cybercriminals are increasingly focused on return on investment and are quick to take advantage of any blunders and vulnerabilities. Financial organizations are desirable targets for fraud because of the potential size of the prize, and the sheer volume of transactions at a fraudster’s disposal. ‘‘Electronic fraud happens at a rapid pace. Those charged to fight against fraud, must be fully armed to move as quickly as these hackers do,’’ Sulaiman added. Solving this is one of the conference’s priorities: it was convened to discuss current trends in payments and the state of fraud in the industry. The event provided a rallying ground for the industry -- top tier decision makers from banks, mobile payment providers, processors, innovators, fintech, data analytics, regulators were in attendance – to collectively assess and streamline the impacts of fraud on the industry in 2018 and come up with strategies to prevent similar or further attacks in 2019. Declaring the event open, Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele (represented by Head, Payment System Policy and Oversight Division, CBN, Jimoh Musa) said that there is abundant evidence that fraudsters’ are employing social engineering and other new methods to steal bank details of customers and called for a payment industry’s ambition should be to create a collaborative fraud prevention framework. He said banks have to work on increasing customer confidence in

We cannot shy away from some negative consequences on the system. We must as a matter of responsibility be willing to look squarely into these issues and proffer solutions to keep the payment system safe for everyone. Onajite Regha Executive Secretary/ CEO E-PPAN

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the sector. “It is actually going to be a collaborative effort because these guys are fast developing. As we are here today, some of them are here listening to some of the techniques we are discussing. So, as they listen to these techniques they try to up their antics in order to surpass whatever techniques they think we have here to diffuse all the strategies that we put together. It needs all of us to work together to be able to fight this menace,” he said. According to the governor, customer-centric approaches to collaboration would not only increase the likelihood of financial institutions retaining customers, they also enable banks and payment providers to stay ahead of the criminals. With comprehensive customer education and sensitization, users of banking and digital payment services can fully understand the consequent risk they could be exposed to. “[The] CBN will always provide the backing for the industry to push together as one entity right in this. We are also doing inter-agency collaboration with the Nigeria Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission, judges, the Nigerian Communications Commission, Nigeria Deposit Insurance Corporation (NDIC) see how we can deal with this issue of fraud,” Emefiele said. In a keynote speech, Agada Apochi, Managing Director of Unified Payment Services commended the industry for the progress made in the deployment of e-payment services in the country but advised that the traditional model of siloed arrangement in fraud prevention effort is no longer sufficient. He said the effectiveness of the entire industry working together can make risk management and fraud prevention more accessible, effective and reliable. “The best way to minimize fraud; minimize risk is what we do ourselves as operators. My recommendation, therefore, is that we should be cautious in celebrating the challenges of an institution. You should encourage the sharing of ideas and knowledge. Sharing such ideas and knowledge does not mean you will not have opportunities in competition,” he said. Agada said the Nigerian financial industry was the least hit among global communities by financial hackers as a result of security layers and authentication processes in all financial transactions across all banks in the country, coupled with the 100 per cent compliance ratio on Chip and Pin debit and credit cards imposed by the CBN. He, however, said there were still cases of high level insider fraud within the banks and that banks must not relent in their efforts to weed out the elements respobsible for this.

Conference attendees, speakers and panelists pose for a group photograph. Over 215 people attended the event.

Senator Ayo Arise, (left) Chairman, Fortune Games Limited and Adedotun Sulaiman, Chairman, Financial Reporting Council of Nigeria.

Onajite Regha, Executive Secretary/CEO, E-PPAN and Yinka Tiamiyu, Chairman, Association of Chief Audit Executives of Banks In Nigeria .

Stanley Jacob, Chairman, CeBIH, Yinka Tiamiyu, Onajite Regha, and Pattison Boleigha of Access Bank.

Apochi said banks must begin to evolve with the speed of financial technology (fintech) players adding that fintech disruptors are fast at developing the kind of financial solutions that are making a difference in the market. ‘’Banks must generate data, analyze data and handle it in such a way that the information from data will help them in understanding and addressing customers’ needs,’’ he said. “They must also pay attention to risk management in order to boost customers’ confidence.” Artificial Intelligence (AI) was a persistent theme at the conference. Speakers said that the growing realization of its value by banks would be a factor in differentiation and competitiveness. More banks now use AI to personalize services, improve effi-

Compère of the event was television personality, Stephen Ipalibo-Lawson.

ciency and reduce friction. A panel session on exploring fintechs and their innovative tools agreed that fintech companies are radically altering financial services. Because they are tech driven and innovative in nature, these disruptors are quick to meet the exacting demands of digital customers. From innovative start-ups to multinational technology giants, they seek to take market share from incumbent financial services providers by offering faster and user friendly payment platforms. The panelists agreed the fintech industry has the potential to plug up security gaps within the financial system. A presentation by Medallion Communications Limited on the 2017 Cyber Security Report ack19 /E-PAYMENT REVIEW/ DECEMBER 2018

nowledged that a key challenge in the fight against fraud was the deficit in the number of personnel with the required skillset. “In Nigeria today, we have a population of 195 million; the estimated cost of cybercrime in the year 2017 was N649 million and the estimated number of certified professionals was 2,800. If you look at the population against that number of certified professionals, there is a huge skill gap,” said Sylvia Ntia, Project Manager, Demadiur Systems who represented Ikechukwu Nnamani, CEO of Medallion. The shocker of the day came from Lawal Aribidesi Olumuyiwa, Visa’s Risk Services Manager, West Africa, who said that banks and other financial service providers who are Payment Card Industry Data Security Standard (PCIDSS) compliant, still do not know when they suffer financial loss through cyber-attacks. This drew gasps from the audience. He said financial fraud still existed within banks and that 70 percent of cyber-attacks occur within the Africa region, especially with ‘cash-out attacks,’ which he described as highly-coordinated global fraud schemes that see cybercriminals target a bank or payment card processor, using malware to access customer card information and obtain network access, and use cloned cards at cash machines across the world to fraudulently withdraw millions of dollars in a matter of hours. Olumuyiwa warned banks to monitor for a surge in the demand for their debit cards, which he said was a red flag and advised those that are PCIDSS compliant to embody the requirements of the standard to help mitigate financial risks. He listed some anti-fraud strategies to include data protection, devaluation of data, and customer empowerment. The conference concluded that the collaborative fraud prevention strategy would involve training employees across all levels and sensitizing customers so they can protect themselves and sharing cyber security knowledge, products and services across the industry including law enforcement agencies and the judiciary. Onajite Regha, CEO/Executive Secretary of E-PPAN, in closing remarks said that strategies focused on collaboration must result in reductions in payment security challenges and upsurge in positive customer experience. ‘‘We have seen a lot of breeches in the industry and as innovations continue to happen and more advanced technologies are introduced to improve convenience and access to payments, we cannot shy away from some negative consequences on the system,’’ Regha said. ‘‘We must as a matter of responsibility be willing to look squarely into these issues and proffer solutions to keep the payment system safe for everyone.’’

L-R: Chief Risk Officer, Unified Payment Services, Ochanya Dan-Ugo, Managing Director/CEO, Unified Payment Services, Agada Apochi and Onajite Regha.

Adedotun Sulaiman giving the welcome address.

L-R: Olaolu Adegbite, Assistant Commissioner of Police, Special Fraud Unit; Pattison Boleigha, Chief Conduct and Compliance Officer, Access Bank Plc; Ahmad Ghali, Head, Bank Fraud Section, EFCC and Rolland Avedician, Legal Attache, United State Consulate in Nigeria.

Musa Jimoh declaring the conference open on behalf of the CBN governor.

Apochi receives the conference participation plaque from Adedotun Sulaiman.

Registration desk. Joy Obaji (middle) and Olasile Waheed (in red cap) both from E-PPAN.

Cross-section of participants at the conference. Attendees had opportunity to ask questions from the high-powered panels and offer suggestions.

Sylvia Ntia, Project Manager at Demadiur Systems Limited.

Risk Services Manager, West Africa, VISA, Mr. Lawal Aribidesi Olumuyiwa speaking about cash-out attacks.

Exhibition by payments technology and Nigeriaâ&#x20AC;&#x2122;s fastest mobile wallet, NowNow. 20 20/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

Exhibition stand of payment and business management solutions provider, Global Accelerex.

2018 Person of the Year

Banking Chatbots LEO

ADA SAMI OCTOPUS

TAMARA OXYGEN

Innovation of the Year

PayDay Loan by Access Bank Articles and interviews BY BROWN N. UGBAJA

21 /E-PAYMENT REVIEW/ DECEMBER 2018

2018 PERSON OF THE YEAR

THE CHOICE

THE FUTURE IS READY TO HAPPEN

VER THE PAST DECADE OR SO, THE WORLD HAS seen a dramatic evolution in payment technology and a plethora of innovative transactional experiences. Banking as we know it is continually forced to change and change again as new ideas take form. Merchants are thrown into the middle of an increasingly dynamic ecosystem that is not only driven by digital tools but is energized by the changing needs and preferences of consumers. It wasn’t that long ago that we could only make payments with cash; cheques were opaque symbols of relative affluence and cards were just something we saw in foreign films. Today, we have moved into the digital frontier of PoS, USSD, QR Code, virtual wallets and mobile platforms. Whereas, at some point in the history of banking, our choice was limited to visiting the bank branch to perform simple cash-in and cash-out, we now have a deluge of alternatives namely: Online payment services, electronic bills payment, internet banking, local or international transfer, direct credit, debit/credit cards. All of this, we can use at our convenience. But then, they never seemed to be enough or permanent enough to assuage our inexhaustible needs. The global system of payments is evolving at a remarkable pace. Banking and money and how both interact are changing forms and dimensions on constant basis. Payment has become a central — irrevocably central — element in the lives of individuals and societies, and, in fact, to the future of humanity. In The Tempest, William Shakespeare writes: “Where is what´s past is prologue, what to come in yours and my discharge.” Yes, history sets the context for the present but live on the interstices between the past and the future, with the present constantly fading away like a shadow. Whereas technology gives us access to knowledge and preserves our memories, payment technology has become a priceless treasure that shows us the way forward. However, we really do not know where that road will lead us in the future, what new features will appear in it, or whether or not it will be easily passable. Precisely because of the importance of the future to our lives and societies, players in the payments space ranging from the traditional banks and non-bank upstarts are coming up with digital payment solutions that completely circumvent existing payment systems, all in the bid to find new ways of ensuring that customers are able to pay for goods and services received, and that merchants or businesses are able to receive payment for goods sold and services rendered. The heightened activity in payments has been largely attributed to four major shifts being observed in the global payments landscape. First, the ongoing digital and technology revolution, championed by the smartphones and mobile internet. Second the entry of non-bank institutions offering payment services and

products; third, customers (consumers and merchants) becoming more demanding and expecting instant payment solutions that offer the same quick service as cash and fourth, progressive changes in the regulatory framework. These factors have given rise to a burgeoning industry recording $3 trillion transactions per year globally and worth around $13 trillion in aggregate. What these factors have done is force technology to move at dizzy speed. Now we have blockchain, cryptocurrencies and intelligent chatbots that are becoming a booming trend with more and more businesses and industries getting interested in them to ease their business processes. Bank especially have become more open to the promises that technology can bring. With the ever-increasing demand from consumers for personalization, customer focused banking is at its peak. Many banking organizations are leveraging artificial intelligence, machine learning, and natural language processing to launch solutions, reduce costs and serve increasingly tech-savvy consumers. Chatbots are one of such solutions and they are proving to be one ray of hope in making consumers happy and bridging the gap of human interaction. In many instances, they are developed to facilitate two-way communication, replacing channels such as phone, email or text. The objective is to provide quick service and transactional support. The mobile phone changed banking and is changing the way we bank. Banking is one of the world’s oldest businesses. It's been with us in one form or another since the merchants of Ancient Babylon started offering grain loans to farmers who needed to transport goods between towns. It wasn’t until 14th century Italy that banking as we recognize it today developed: In fact, the oldest bank still trading today (the Monte dei Paschi di Siena) was founded in 1472. Which means it took of 500 years for to get here. And the speed with which modern technology has moved banking in less than a decade has meant that the traditionally slow-moving financial institutions have had to invest billions to remain relevant to customers and competitive in the marketplace. And no other technology has had a bigger impact than the mobile phone. Mobile phones were designed to be exactly that: a mobile telephone, making it simple for people to make calls on the move. Today mobile devices do so much more. Web browsers, video cameras, gaming systems, social media sources, navigators, calendars, alarm clocks, torches, organizational systems to name a few. Just using your phone to make a call is definitely a thing of the past. Mobile devices were simply telephones for communication, obviously this is still the case but the level of communication has reached new highs. Apps, Wi-Fi, high resolution cameras offer so many different ways to share information. Social media and social media apps push the process of communication even further. Posts, tweets and images can be shared across the globe reaching

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BUSINESS VALUE FROM CHATBOTS There is a system that can keep the customer engaged in real-time and provide more value than a traditional email or phone call. It is known as a Chatbot. people in an instant. Because of the mobile phone, convenience has become a byword for banking. Latest banking options are designed to for the phone, and banks are increasingly modifying the way they do business to appeal to the tech savvy, smartphone equipped customer. More and more transactions are handled over the phone, reducing the need for visiting a bank branch. While majority of banks maintain a physical presence, many have shifted the focus of their ongoing and planned growth to mobile applications and alternative transactions. They are creating more responsive websites that work well on smartphones and tablets for online banking; apps are increasing in popularity, allowing customers to access data with a single touch. The phone is even proving to be a nemesis for banking with technology companies relying on it to squeeze out the traditional bank and offering different ways to pay. Companies now leverage the potential of mobile to improve marketing and customer service. Because of mobile, customers expect a more tailored and personalized experience when they need to communicate with their bank. That is why Nigerian banks are increasingly turning to it to offer their services. With data costs and smartphone prices becoming more affordable, and internet access on a steady increase, more Nigerians – old and young –are spend more time on their phones and social messaging platforms like WhatsApp, Facebook, Telegram etc. Very much aware that most of their customers are located in the web, gamification of customer service has become an important strategy for banks. In 2018, new digital technologies provided the banking industry in Nigeria with a form of customer engagement – chatbot, a service designed to simulate human conversations, generally over the Internet, using artificial intelligence (AI) and machine learning. A chatbot can have a conversation with customer like a real person. And since it uses AI, the more conversations the chatbot engages in, the more intelligent it becomes. Nigerian banks were very quick in understanding the value that this technology to their work and were even quicker to deploy it without any hesitation. The United Bank for Africa

(UBA) fired the first salvo in January with the launch of a young male chatbot called Leo that can efficiently handle most basic bank tasks, assist with enquiries and pass complaints. Diamond Bank joined the innovation train with Ada in March. The chatbot projects a young female vibe and performs the aforementioned services in addition to checking stock prices. Access Bank followed immediately with its own bot called Tamara launching it on WhatsApp and on the Web. Stanbic IBTC joined the trend in June unveiling Sami, another female bot, on Facebook messenger so its customers can get help via text regarding their banking needs. A month after, Oxygen was launched by Keystone Bank on Facebook Messenger, mobile apps, and Telegram. Heritage Bank will later come up with own souped up version, Octopus, which is accessible on the Web, Facebook Messenger, and Telegram. Each of these chatbots is a powerful and efficient communication tool which ultimately empowers customers to take their own banking needs into their own hands. They are also of immense value to the banks themselves. Chatbots are a great backup for employees in handling repetitive tasks. They are cost-effective, easy to implement, maintain and use. In the long run, this will make banks more efficient, competitive as well as improve brand perception. What this means is that the chatbot is the way of the future. It is projected that chatbots will save banks billions of dollars in the coming decade. According to a report released by Juniper, chatbots will be responsible for over $8 billion in annual cost savings by 2022. Gartner believes that before then or sometime by 2020, chatbots will be handling no less than 85% of all customer service interactions. While it is possible that introducing chatbot technology into their operations might be a way to embrace a trend, the banks have by their actions opened a way for other sectors and businesses to follow. They have blazed a trail for robotic automation in Nigeria, creating the hope of optimizing and making businesses’ processes more efficient in th future. That is why these chatbots are E-Payment Review’s Person of the Year 2018. They each portend a future that we are ready to see happen.

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LEO

2018 PERSON O F T H E Y E A R CHATBOTS IN BANKING

The disruptor reshaping the nature of banking

N AN HOUR-LONG PRESENTAtion he made at this year’s Facebook F8 Developers’ Conference, Mark Zuckerberg, Facebook’s founder and CEO, tried to keep developers excited about continuing to build on his platform by talking about how valuable artificial intelligence (AI) has become via his company’s Messenger app. He spent a good length of his keynote touting a wholesale package of how his platform has been used to create new bots - 300,000 of them to be exact and up from the 100,000 milestone reached at the annual developer conference last year. The CEO told the over 2,500 coders and corporate-brand caretakers who gathered to hear what’s in store for the future of Facebook that the chatbot market is opening new opportunities around the world and shared how businesses now trade eight billion messages a day on Messenger and showed how that means the app is the most dominating market for bots among everthing that is out there. For proof, he pointed at Leo, a chatbot offering human-like conversations fueled by machine learning technology. “Leo is doing incredible things,” Zuckerberg reportedly said. And he is on point there. Created by the United Bank for Africa (UBA), he as an easy, useful and intuitive text-based chatbot that accomplishes banking tasks, start to finish, in the place where people already spend their time: messaging apps. Leo had only been around for less than six months before taking centre-stage at the McEnery Convention Center in San Jose, California venue of the F8 conference. The fact is whether it's Facebook Messenger or WhatsApp, Leo integrates with these apps to make transactions simple, easy and fast just by having a conversation. Launched in January this year, Leo (the name is symbolic of UBA’s moniker as the lion of Nigeria’s banking) is optimized to respond to natural language messages from the bank’s customers, such as how much money they have in their accounts, topping up their airtime, location of the nearest bank ATM, activating their cards, or making payments. Using artificial intelligence and Facebook Messenger, Leo enables

users to confirm cheques, pay utility bills, freeze an account, apply for a loan, and obtain mini account statement. And all that takes place right in the chat app while the users are on the go. UBA’s chatbot was the bank’s way of'introducting a path for banking in Africa to follow in the effort to engage and serve customers directly on social media — via desktop, smartphone, and other mobile devices — through an AI-powered platform. At the presentation of Leo, UBA’s Group Managing Director, Kennedy Uzoka, said the chatbot was part of ingenuous designs to put the bank’s customers first by easing channels for transactions, ensuring the security of payments and evolving opportunities for engagement. “The formulation of this product, is consistent with the bank’s customer first philosophy, where we are doing things not the way we like, but focusing on what the customers want, where they want it, and in the exact platform they want it,’ Uzoka said as he unveiled the visual avatar of the chatbot. “Leo being an intelligent personality will give you feedback instantaneously as you transact your business on the platform. A solution that is from the customer’s standpoint and is easy to use by anyone.” That ease of use is a factor in the creation of this chatbot can be gleaned from efforts to capture the essence of youth, especially when appraised from the avatar of Leo. In all sense of the word, Leo has a personality. He is a young African male who in conversations comes across as part banker, part friend. His style is fashion-forward and tasteful but tailored towards what any 18 to 24-year-old is wearing in any tertiary institution in Nigeria. Meanwhile, he seems designed to chat with young people - a demographic apparently chosen because it represents the largest share of social media users. The reason for this strategy is also very easy to see. Young people spend their day with their head in their mobile phones and their experiences and concerns splattered on social media. Those among them who have bank accounts are loath to visit bank branches or call customer service on the phone. They don’t appreciate anything that wastes their time. Going to a branch and standing on a queue wastes time. Same with

“The formulation of this product, is consistent with the bank’s customer first philosophy, where we are doing things not the way we like, but focusing on what the customers want, where they want it, and in the exact platform they want it." Kennedy Uzoka Group Managing Director, UBA.

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staying on the phone while listening to repetitive hold music and waiting to speak with a call centre agent. What they appreciate is fast service. So, if you are able to provide actual value in the arena where they already spend their time, you are bound to grab their attention. All they want is the most direct line between their problem and a solution. That is the beauty of using chatbots for frontline customer interactions. They help consumers find solutions no matter what time it is, where they are or what device they use -- no forms, cluttered inboxes, or wasted minutes spent searching and scrolling through content. When you want a quick answer to a question, Leo can provide it without requiring you to open an app or website, or traverse any navigation. This much was made known by Austine Abolusoro, Group Head of Online Banking at UBA and lead asset in the Leo project. At the chatbot’s launch, he pointed out how Leo is not just a chat apparatus, but an artificial intelligence personality meant to address any type of

Meet Leo: artificially intelligent personality doing banking through a simple conversation.

banking concerns raised by customers. "Leo is ready and waiting to help with most transactions and to deliver any form of banking services. Leo is operating a lifestyle banking platform on Messenger to assist with your transactions while chatting with your friends and business partners,’ he said. Leo’s personality and lifestyle were cultivated with support from Facebook’s AI implementation team. The goal was to filter UBA’s unique banking culture into a system that serves people in sets of very large numbers. Teams from the bank and the tech giant worked together to oversee a transformation of UBA’s engagement operation, using an approach that would make customer service more relevant and effective. That is novel for the African continent. UBA was the first financial institution in Africa ever to introduce this solution. Though chatbot is a new phenomenon in this climate, the technology has long been popular in countries like Japan and China. Silicon Valley discovered it a few years ago and has invested heavily in it to make it an

art form. “At UBA, we have been working with technology giants that have the global capacity to ensure not only seamless but also effortless banking for millions of our customers across Africa. We at UBA, have collaborated with Facebook to come up with this innovation that is capable of revolutionizing the way banking is done in Africa,” said Uzoka. In less than one year, the CEO’s optimism has become reality. The usage, usability and usefulness of the Leo chatbot service have set it on the verge of explosion. According to Abolusoro, Leo is hitting encouraging performance numbers while creating wider expectations for the future. “On the average we have over twenty million conversations that have been generated on Leo. We measure conversations on the platform like people conversing and asking questions. The value of transaction on Leo right now is in billions per month. The number of customers that have used it is about 900, 000 plus and will hit a million before the

Leo has a personality. He is a young African male who in conversations comes across as part banker, part friend.

25 /E-PAYMENT REVIEW/ DECEMBER 2018

end of the year,” he said in an interview with E-Payment Review. Going by the numbers, UBA customers have started to see the value that made the bank to bring him on board in the first place. In fact, they see Leo as more than a payment facilitator. Some users of the platform deliberately engage him on marathon chat just to see the stuff he is made off. Others like the idea of a chatbot because they find it easier to tell him things they would never say to bank staff and in that sense they can see Leo as capable of fulfilling future functions that go beyond banking. Abolusoro said that is the plan. Leo can do other stuff like tell the weather but UBA has already set its sights on the future in the way Leo is nurtured and allowed to grow. The bank is monitoring developments in machine learning and neural networks with hopes of making Leo more sophisticated and able to have conversational understanding that goes beyond textual interaction, beyond banking and more helpful in UBA’s customers’ day-to-day lives.

2018 PERSON OF THE YEAR

HAT EXACTLY DOES INTEgrating artificial intelligence mean for banks and why did UBA choose to pursue it? Worldwide, a lot is being done to move banking from traditional to the digital space and here we deliberately pursued a mobile strategy, which was to first bring our customers to use their mobile phones for banking transactions and facilitate their interactions with us. This decision is based on available data. In Africa, there are over 900 million mobile devices, of which Nigeria accounts for about 100 million. Many of these mobile phone owners do not have bank accounts. In Nigeria there are only about 40 million bank accounts. We calculated that the only way to reach them digitally is through their mobile devices. We also found that internet access across Nigeria and Africa is growing at about 50% yearly. Currently, internet penetration across Africa is at about 36% and is projected to grow to reach 50% by 2020 or so. Looking at data on internet penetration, we saw that about 90% of internet access across Africa is done through mobile devices. We concluded that solutions built around mobile devices should be key to our strategy as a bank, so we revamped our mobile app and created other solutions for use

THE INTERVIEW

Leo is banking experience fueled by machine learning Group Head, Online Banking at the United Bank for Africa, Austine Abolusoro on why his financial institution is staking the future on a chatbot to ensure stronger engagement. on mobile. From our research and analysis of how artificial intelligence is growing worldwide, we came to the understanding that the year 2018 was going to be the year of the bots. I personally wrote an opinion on my LinkedIn page in January to say that 2018 was going to be the year that bots will start ruling businesses and businesses will be moving from traditional processes to deployment of artificial intelligence and robotics. We decided at UBA that if this was the future then we must lead that space as a bank. Then we took a decision about this time last year to engage with Facebook to work on a project together and on January 11, 26 26/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

2018 we launched the first artificial intelligence banking chatbot in Sub-Saharan Africa, which we called Leo. Tell me how Leo works, what are the main tasks it solves? Leo is a chatbot that we trained to behave and think in ways similar to how humans do. It is purely programmed application. When we started developing this platform last year, we agreed that we needed to give it a personality and we went through different processes to arrive at the name Leo, which means a young lion. UBA has the synonym lion so it was something that resonated a lot with our identity. Leo

helps customers conduct banking transactions on their own devices without coming to the bank. It is done as interactive transaction. We want customers to be able to interact with machines without necessarily knowing that they are dealing with machines. When customers chat with Leo, he directs them on how to perform banking operations like opening an account. Leo understands human language; he is trained on how to respond to people. When you go to Leo to say you want to open an account, he asks certain questions depending on the country in which you live because we have Leo present in 16 countries where we have operations. We have created a level of interaction and personality to make banking easier and if you have a complaint instead of calling our call centres, you can go to Leo and make your complaints by selecting it on the listed categories we classified there. What we have done overtime is to continue to add functionalities to Leo and I think today we have have added about 20 of them. We want to add more so people would be able to come to Leo and perform just any banking transaction. For example, when travelling abroad you have to inform your bank about it otherwise you won’t be able to use your card. You can easily set that up on Leo. In terms of usage, what kind of numbers are you seeing? On the average we have over twenty million conversations that have been generated on Leo. We measure conversations on the platform like people conversing and asking questions. The value of transaction on Leo right now is in billions per month. The number of customers that have used it is about 900, 000 plus and will hit a million before the end of the year. What benefits does Leo as a chatbot provide for the bank and for the customers? The benefit for the bank is that we are meeting the expectations of our customers. When we look at the demographics that we see on Leo, about 70% of the people on this platform are between the ages of 18-34. We want to cater for the people of the future. It is believed that by 2025 over half of Africa’s demography will be people of around 30 years. We want to be ready to provide the sort of service that these people will want. With Leo, we can cater to the needs of our customers of both now and the future. It is for people who spend most of their time on social media. We are meeting their needs there. Also, we are taking away burdens from our customers such as unnecessary delays at the branches or call centre. We have over 15 million customers and Leo can attend to thousands of people at the same time; that is the power of artificial intelligence. When customers need attention they can get it immediately on Leo which is not like when you call the call centre or go to the branch. Another point is that it has a great impact on consistency as against human moods. Any time a customer uses Leo he/she gets a good experience without worrying about human mood. There is also a cost benefit analy-

sis to it in that the more we are able to get a lot more people to get to this platform, the less the pressure on our call centres and branches. What challenges did you encounter during the implementation of this chatbot? We didn’t really encounter any major challenge because we worked with one of the best companies in the world to build it. Engineers at Facebook gave us support to build a system that is robust and Facebook CEO, Mark Zuckerberg was proud to show it off at their developer conference this year. If there was any challenge at all it was how to get people to use it because it was new and wasn’t something that was common. There was a kind of change management required because people were not used to doing their banking on social media. Up till today, there are people that still believe that it is not real. We worked with communications and change management experts to figure out ways to do this progressively. We had a whole lot that we wanted to roll out in January but we decided to release them in versions. At first we released about three features and gra-

knowing full well that many of the things that human beings are doing today will be taken over by machines over time. As a bank we want to be in the forefront by ensuring that we empower our people to understand this type of technology and to put the right framework around how we use it. Let’s go back to what you said about automation. According to a Gartner estimate, by 2020, customers will manage 85 percent of their association with a business with no human interaction. How do you see the current state of play in AI and its future evolution in banking in Nigeria? The state of play in AI is at the elementary level. I’ve not seen its impact in many industries in Nigeria but we can see it coming. Generally, in Nigeria, the financial services industry, banks especially, have always led in the use of technology. Overtime we are going to see other industries begin to embrace AI and robotics. We are going to see many industries embracing this type of technology because AI actually impacts

WITH LEO, WE CAN CATER TO THE NEEDS OF OUR CUSTOMERS OF BOTH NOW AND THE FUTURE. IT IS FOR PEOPLE WHO SPEND MOST OF THEIR TIME ON SOCIAL MEDIA. WE ARE MEETING THEIR NEEDS. ALSO, WE ARE TAKING AWAY BURDENS FROM OUR CUSTOMERS SUCH AS UNNECESSARY DELAYS AT THE BRANCHES OR CALL CENTRE. WE HAVE OVER 15 MILLION CUSTOMERS AND LEO CAN ATTEND TO THOUSANDS OF PEOPLE AT THE SAME TIME.

dually we started adding more to help people get used to it. We started with Nigeria and later added other countries so that people can see the impact and understand that it is real. How important will AI be for UBA moving forward? Do you have a clear strategy yet? Going forward, AI is going to be at the centre of the things we build in terms of technology and digital strategy in UBA. While I can’t give you details of what those strategies are, I can tell you it’s going to be playing a central role. We’ve demonstrated this already in the market showing that it is very critical to what we want to do and the way we want to interact with our customers. That was why we did not waste time when WhatsApp released its API to launch Leo on the platform. We have consistently showed that this is very important to us; we are putting a lot of resources on it and we will continue to deepen it. This year we launched Robotics Process Automation (RPA), which makes use of software robots to automate tasks across our banking processes. What it means is that those tasks that will take days or hours for humans to do, we put Leo there to start doing them automatically overnight like reconciliation of ATM transactions. Our digital strategy going forward will encompass the deployment of artificial intelligence 27 /E-PAYMENT REVIEW/ DECEMBER 2018

on almost any area of human endeavour and chatbots are at the entrance or middle level in terms of deployment of artificial intelligence. A lot more can be done with AI in the medical field as is happening abroad. At some point you won’t be able to buy a new car that does not have an AI feature in it. The car I bought five years ago has some level of intelligence that tells the driver when he is about to hit an object. We are going to see a lot of smart cars. One of the impacts of AI on automobiles today is full autonomy; cars which drive themselves. Though it is still a debate even in the US but as time goes, it will be an everyday reality. I read a paper that says 90% of cars will be at least semi-autonomous by 2030. We don’t know when we are going to see this in Nigeria because it would require a different kind of infrastructure. All AI is doing is allowing a machine to make a decision on its own while a human can intervene at a point. On Leo, we sometimes have agents intervene from our call centre. People may ask questions that Leo may not be able to answer, an agent could take over and start chatting with the customers without them knowing. This is human-machine collaboration. I asked that question because firms in Nigeria often jump straight to the most chal-

2018 PERSON OF THE YEAR

MINES

When we analyse the kind of questions that people ask, that gives us more ideas and helps us to build products around what the customers want. Through engagement and feedback, it helps us in gathering intelligence that would give us a competitive edge.

lenging uses of new technology and miss out on the easy-to-implement applications with high benefits for everyone. What do you think are the low-hanging fruits in AI? Where we should apply it in banking is where we are already doing it. We started by saying you can check your account balance, do transfer, buy airtime. These are things that people were already doing on other channels without coming to the bank branch. People were using the mobile app and the USSD code (*919#). Now instead of downloading an app you can do that on Messenger. You open an account, make your complaints without coming to the bank and gradually we will include applying for a loan without coming to the bank. Soon we will be moving into the most complex part of it, which is deploying AI’s to help make certain decisions for a customer based on the data we have on

the customer. That is machine learning. We are building the knowledgebase that will allow Leo to respond to almost any enquiry of a customer. Since AI automates most processes that need human intervention, how do you think Leo is going to change the way UBA customers do their banking? Leo is already changing it because our customers today know that they can do their banking transaction from Facebook and WhatsApp platforms. It is changing their behaviour and the message is that we are just going to make our banking services available on any platform where they are and they would not need to come to the branch. It is also giving us some insights into some of the products and services that consumers want, which we have not factored into our suite of offerings.

“Going forward, AI is going to be at the centre of the things we build in terms of technology and digital strategy in UBA. While I can’t give you details of what those strategies are, I can tell you it’s going to be playing a central role. We’ve demonstrated this already in the market showing that it is very critical to what we want to do and the way we want to interact with our customers."

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Bonus question: A common fear is that AI will take jobs, whilst a common counter is that AI will create jobs. What are your thoughts? This is exactly one of the questions I had to deal with in one of the modules during my training on AI at MIT (Massachusetts Institute of Technology). For years, there have been debates for and against AI taking jobs but I came to the conclusion after this course that AI will not really take jobs. I arrived at that conclusion after we had to dig back to the history of technologies and industries in the world and how every time there was a new industry or new technology, there have always been that fear that humans will be out of jobs. Human needs are insatiable as they say. Human beings will continue to create more problems in the world that will need people to solve them. AI is one way humans will solve problems but it cannot solve every human problem. The fear of automation is that it is going to cause people to lose their jobs, but what AI and automation truly do is enhance processes, create new processes and render some processes obsolete. In this bank today, we have over 15, 000 staff and we are fully automated but there is still room for more workers as new processes are created. We are in the fourth industrial revolution or industry 4.0 where industries get automated with AI and machines that are able to do things by themselves. Companies that are set up for this, like Toyota which makes cars, deploy lots of robots yet they still have hundreds of thousands of people still working there, guiding the robots to place things rightly. When we fully deploy AI’s, some kinds of job will become obsolete or will be taken over by machines but new jobs will definitely be created and we’ll need human beings. AI is a technology driven initiative and if you do not have the requisite skill you are not going to fit in but you will find something else to do. There will be other new things that will definitely happen and even within the AI space new skills will be required as it continues to evolve. Companies will need people depending on the scale of their deployment. AI will not lead to loss of jobs but there will be a realignment or displacement for some people to move away from whichever industry they are to a place where their current skills will be useful. AI will be a net creator of jobs.

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2018 PERSON OF THE YEAR

ADA

Youthful, svelte and an appetite for conversational banking

DIAMOND BANK - YOUTUBE

HE FIRST THING YOU NOTICE ABOUT ADA’S avatar is the magic of her allure – a special mix of style, attitude and personality. The female chatbot that Diamond Bank introduced to its retail banking customers defines the reason for virtual attraction: her dark gray blouse embellished with the bank’s logo; her hoop earrings and the red (sometimes it is purple) hair band that both accessorizes and bonds her scintillating natural African hair. Her casual confidence and genuine spirit come across in the way her lips curl at the edges of her mouth as she smiles and how her eyes twinkle with a thirst for service. For a cybernetic entity, Ada knows how to carry herself well, how to blend in and converse with people on social media platforms. More than just an enticing smile and charming eyes, her femininity is well constructed to mean strength, rationality, intelligence and character. Ada is a banking chatbot and virtual assistant imbued with specific knowledge of Diamond Bank processes to help customers with payments, transactions and account insights. If you are a Diamond Bank customer, you can quickly use it to access your account balance, recent transactions, or even apply for a debit card or a loan. Using natural language processing and AI reasoning, Ada is capable of intelligent, human-like conversations via text, and can extract meaning and intent from conversations. It is designed to work on messaging apps, on social media and on the bank’s websites. And don’t worry about phrasing your messages in a bot-friendly way -- just text as you would with a friend, and Ada will take care of the rest. Engagement is the key purpose of bringing this chatbot on board. Banks with an online presence usually require customers to seek out information through a phone call or a search in the bank’s website, but Diamond Bank’s mission is to respond to the needs of its customers in a dynamic and accessible way. By deploying Ada, the bank is able to deliver a conversational banking model that its customers can use to easily manage their money via their favourite conversation platforms, whether it is Facebook Messenger or Telegram or WhatsApp. Chatbot is still a relatively new technology in banking, but Peggy Orji, Diamond Bank’s Channel Manager, Internet and Chatbot Banking believes that Ada has been creating the right kind of buzz. “Currently, we have over 32,000 unique users who have chatted with Ada and a 60% activity/return rate. So far, we’ve recorded over 500, 000 interactions on the platform. People are constantly engaging her,” Orji told EPayment Review. Through Ada, Diamond Bank now extends same benefits of the one-to-one personal service usually reserved for top-tier customers to its retail customers. Of course, unlike the bank’s human employees, she will be available 24/7 to provide guidance and execute transactions. In using an AI chatbot, customers can get answers in a matter of seconds, as opposed to having to wait for a real human to answer the phone. Ada allows customers of Diamond Bank to easily gain insight and keep track of simple, day-to-day banking and

transactional activity. This includes the ability to get answers to common questions, find a branch or ATM, carry out airtime purchase, bill payments, stock trading, and money transfers as well as view current account balances and recent transaction history - all within a chat platform. By leveraging the convenience of this channel, Diamond Bank can offer a new consumer banking experience that is easily accessible, intuitive and personalized to each customer. She can provide instant support to customers’ inquiries in English, Pidgin and a smattering of Hausa, Igbo and Yoruba. “Ada will allow us to further digitalize the mobile banking process and create an increasingly customized mobile banking experience for our millions of customers, Ada also presents another opportunity to deepen financial literacy and build trust and transparency in our ecosystem,” said Uzoma Dozie, CEO of Diamond Bank in comments on the launch of Ada. The decision to make Ada (which is the name given to an Igbo first daughter) was intentional. Outside further empowering Diamond Bank to take the enormous amounts of data it has and making it easily accessible to its retail customers in the form of a chat interface, the banking behemoth had deeper objectives. According to a statement announcing the debut of Ada, Diamond Bank said she would generate the opportunity to reach millions of people, and facilitate financial inclusion on an extraordinary scale, extending the bank’s reach into Nigeria's massive retail opportunity. "I am passionate about how Diamond can leverage technology to tap into Nigeria's huge market, whereby a large segment of the population is underbanked or unbanked. Data-led technology can plug this gap, and expand financial inclusion on a rapid scale," Dozie said. "Diamond already has a foundation of over 15 million customers, and our AI-driven Chatbot Ada will enable us to expand our digital-led strategy, and reach even more people across Nigeria through mobile banking." In addition, Ada also provides a novel solution to Nigeria’s evolving lifestyle trends which have moved towards preferences for mobile and digitally delivered services, the bank further said. The idea aligns with the Nigerian economy’s culture of innovation and entrepreneurship. While the banking industry isn’t exactly known as the most fun of sectors, Ada wants to buck that trend. With most of banking transactions happening on the mobile phone and consumers now accustomed to the types of seamless mobile experiences provided by apps that run on game principles, Ada applies such scenarios to make banking more fun and engaging. This will eventually lead to a change in user behaviour, reinforce Diamond Bank as a brand and solve real-world problems like financial inclusion. “It doesn’t necessarily change the brand; it reinforces the brand. Our brand is beyond banking and beyond banking is core to our philosophy because we are digitally driven and mobile first,” said Robert Giles, Head, Retail Banking Diamond Bank in an interview with E-Payment Review. “Ada is basically about beyond banking; she’s digitally driven and

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“Diamond already has a foundation of over 15 million customers, and Ada will enable us to expand our digital-led strategy, and reach even more people across Nigeria through mobile banking.” Uzoma Dozie, CEO, Diamond Bank

Ada Zainab Ajayi: providing human-like interaction and personalized experience for Diamond Bank customers.

she is mobile first.” As more Nigerians see usefulness and economic value in using mobile phones and social media, a chatbot offering a personalized experience by providing detailed transactionlevel financial responses and advice is the way of the future. Giles believes that the future is already here as he points out that his programmers are investigating and working on new features that will make Ada “smarter” thanks to the vast amount of data she will handle. In fact, the local talents who designed the chatbot, built machine learning processes and deep learning techniques into her so that she can serve functions that go beyond responding to customers’ queries. They want her to develop genuine human-like relationships with their customers; to help them manage their money; to remember information in the correct context; to increase customers’ financial literacy; to understand complex questions and be able to transform them into useful insights for their use. “We are going to see Ada become even more channel agnostic than she is today…. We may move to suggestive so as Ada becomes more predictive, she understands what you are likely to be doing from the morning till the evening and will then become suggestive, able to propose things to you that you need to do now that might be non-financial,” Giles said. This makes sense, as the technology is still very young and

currently is somewhat limited in functionality. But if there is anybody who can push its proficiency to a level where it can understand conversational interactions to using customer insight to provide advanced recommendation, it's Diamond Bank. The bank has already made significant strides in blending technology with banking to enhance its service capabilities. Knowing that an increasing number of Nigerians like to use new technology to conduct bank transactions in a secure and transparent way, the bank has invested in various digital platforms to better serve its retail customers. The bank’s focus is to chart a course for Nigeria’s financial technology ecosystem. This past May, it organized Techfest, an event whose whole essence, according to Dozie, was to demystify technology. Its focus was not just about the developers or the engineers, but specifically about how information technology could be employed to solve problems and scale up businesses in the country’s diverse sectors. Though it didn’t feature prominently in the discussions at Techfest, the potential of chatbot technology was not ignored. For chatbots like Ada, the promise of automating tedious tasks, reducing paperwork, turning over simple jobs and analyzing large-scale data to gain a better understanding of society will be the most impactful way of fixing the problems that were articulated at Tecfest. Hopefully, will be on hand to offer some help.

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"Diamond Bank’s mission is to respond to the needs of its customers in a dynamic and accessible way. By deploying Ada, the bank is able to deliver a conversational banking model that its customers can use to easily manage their money via their favourite platform."

2018 PERSON OF THE YEAR

THE INTERVIEW

Ada brings a transformational wave to retail banking The Head Of Retail Banking at Diamond Bank Robert Giles and Peggy Orji, Channel Manager, Internet and Chatbot Banking, Diamond Bank on how the bank is molding consumer preferences using a female chatbot with emotional intelligence.

DIAMOND BANK - YOUTUBE

ELL US ABOUT YOURSELF, YOUR background and what you do for Diamond Bank. ROBERT: I came to Diamond Bank in 2010; with the exception of an 18-month trip outside the country in the middle, I have been working in Nigeria since then. I started my career at Barclays Bank after my undergraduate programme. There, I was offered the opportunity of either working in investment banking or the credit card business. The two were the most profitable arms of the Barclays Group at that time. I didn’t understand investment banking then because it seemed a bit hard to add up the different components. It didn’t make much sense to me. What made sense to me was the credit card business because it was made up of individual customers and if you add them all up you could see the value of the portfolio and the value it creates for the individuals who used the card. Early on in the business, Barclays sent me, I think in 2002 or 2003, to Botswana to oversee the smallest credit card business in the world. I worked there and tried to turn the business there around. I worked at Barclays for many years and the work I did proved to be responsible for the growth of Pan-African businesses. I’ve been in e-payment for a very long time. I launched a lot of new businesses in East Africa. Nigeria was always this one country that fascinated everybody but people were scared to do business in the country because you only hear horror stories but have no experience. That time only few international businesses were based in the country. Barclays wasn’t present here, the closest they got was Ghana. When the opportunity came to work in the most populous country in Africa with the most exciting activities in e-payment at Diamond Bank, I obviously jumped at it. Having worked in portfolios that included Nigeria and in Nigeria itself without responsibilities outside, I found that Nigeria actually deserves much more attention than any other single market. In fact, if you put all of the other payment businesses together in most regional banks they won't equal Nigeria. There was always conflict in the regional world on how to give equal attention

to what Uganda or Tanzania needs relative to what Nigeria needs. That’s how I ended up here. It was an exciting opportunity to get to work in the most populous black nation. Why do you think chatbots have become so popular in the banking landscape? What is the behavioural motivation to use chatbots now and will be in the future? ROBERT: I think there are two factors involved. The first is often cited as banks motivations to grow. If you look at the model of retail growth from across Nigeria, Diamond Bank in the first 25 years brought in about five million customers using 270 branches in the next two years it grew to another five million costumers without adding a single branch. It was digital innovation that allowed us to have those customers in a way that was cost effective and we could serve them in a cost effective manner. Our arificial intelligence chatbot was not motivated by cost but by experience. If you look at the demographics of the country, more than half of the population are young people and their number keeps growing, I think the average age is 19 and falling and when you speak to that demographic you’ll realize that the last thing they want to do is go to the bank or pick up the telephone to talk to a human being. They don’t even want to email. They want an online real-time experience that doesn’t involve a human and it is now the new expectation. People don’t compare banks with each other rather they compare them with Twitter, Facebook and other social media. What that allows us to do is deliver a consistent quality experience that allows us to learn alot about you as an individual and treat you like an individual without having to have a one-on-one encounter in this relationship. The goal in retail banking is always to get to the segment of one and chatbots artificial intelligence allow you to get to the segment of one so you can be treated as an individual. You feel like you are well known and understood by the organization which responds to your needs as you want them to be responded to. Every product has a story behind it. What 32 32/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

inspired Diamond Bank to create the chatbot it called Ada? ROBERT: I think it comes down to the fact that majority of our population are young and the need of our young population is treat me as I want to be treated not as you want to treat me. The model has turned on itself from the bank telling you this is how you bank with me to the customer saying this is how I’m going to interact with you. Diamond Bank is focused a lot on youth and financial inclusion and women. If you solve the problem of youths and you solve the problem of women you’ve actually solved the financial inclusion problem. We built the products with women in mind and I think it’s no accident that our first chat bot is a female named after our first daughter and that is how Ada came up. Let's take into consideration your motivations about financial inclusion, women and youth empowerment, and digital innovation. Looking at Nigeria, do you feel that we have the right kind of behavioural motivation to go for chatbots right now? ROBERT: I think it is obvious in the way customers have picked up Ada and in the way they interact with Ada. If you see what people will chat to a chatbot and you compare that to what people are prepared to divulge to me as a retailer, you understand why they will adopt it. Let me give you an example. Someone will say: Ada things are really tight at the moment, how do I get money? Your pride might not let you say that to an account officer but you say it to a chatbot because you trust the bank. You don't just trust the bank anymore with money, you trust the bank with information, with your data. So you trust the bank when it is sufficiently anonymous and Ada is able to respond by saying if you need a quick loan this is how to do it. I think that’s the real response. PEGGY: We did a review of transactions done using Ada and we discovered an individual who had done three million naira in value. The person did not do it all at once but through chunks of transactions that summed up to that number. We launched Ada in March and by October someone had actually done N3 million

"In terms of our early hopes and dreams, one, we are getting the early stage customer adoption but more importantly we are learning from that core user group what needs to come next in Ada and then we are developing our analytic machine learning capability to take that back into Ada and make it something that is really relevant to the customer." ROBERT GILES

on it. We won’t talk about when the person adopted the channel but people are getting really comfortable with it. People are advancing with technology especially the millennials. If you have the confidence to order goods from abroad, actually pay and wait two weeks before it’s delivered to you, why won’t you adopt a chatbot that is owned by your bank in Nigeria. People are embracing it because they trust the brand behind the chatbot. Let’s delve deeper into the process of using Ada in creating and managing user banking experience. Could you explain how that’s done with a few examples? PEGGY: Ada is artificial intelligence; she mimics human interaction. She tries to feel your emotions in chats, to learn how you are feeling and replies appropriately. Ada is for every customer, you don’t need to have a Diamond

Bank account to use it. We are looking to enable international cards so that even those in the diaspora can carry out financial transactions with her. You can interact with Ada without doing any transactions. You can just have witty conversations because we’ve taught her small talk and she keeps picking up new ones daily through Machine learning. She does lots of services ranging from funds transfer, bills payment, airtime top-up to enquiries about football or stock prices. Ada is available on Facebook Messenger and Telegram but soon she’s going to be on WhatsApp probably before the end of the year. Our research shows that adoption of WhatsApp banking is on the increase. She’s also going to be available on Twitter and on her own Web channel where those who don’t use the aforementioned social media can have access to her. On Facebook Messenger her handle is @MyDiamondAda and to start a conversation with her, all you 33 /E-PAYMENT REVIEW/ DECEMBER 2018

need do is to say 'hi' and she’ll introduce herself and guide you through all the services that she offers, tell you to accept her terms and conditions and ask what she can do for you. ROBERT: In the same way that someone may introduce themselves to you and through your interaction you can learn about the person, that is the whole idea behind Ada. Because we launched it on Facebook, a lot of people associate it with Facebook but actually Ada is her own identity and will be available on all platforms. You can start by saying hi and go on to ask how to carry out transactions. You can even ask her questions about what Diamond Bank is doing. How is the user acceptance of Ada? PEGGY: Currently, we have over 32,000 unique users who have chatted with Ada and a 60% activity/return rate. So far, we’ve recorded over 500, 000 interactions on the platform. People are constantly engaging her. They are trans-

2018 PERSON OF THE YEAR

acting, chatting or making inquiries while some are using it to register their complaints and all sorts.

DIAMOND BANK - YOUTUBE

How do you think Ada as a chatbot creates a value or changes the image of a brand like Diamond Bank in people’s mind? ROBERT: It doesn’t necessarily change the brand; it reinforces the brand. Our brand is beyond banking and beyond banking is core to our philosophy because we are digitally driven and mobile first. Ada is basically about beyond banking; she’s digitally driven and she is mobile first. It reinforces everything that we stand for and it is deliberate that Ada is a female because we believe in Diamond Bank that if you build services with and for women you can get men as well. We found across all of our segments that it is always a lot harder to convince a female customer to come and bank with you and transact with you but if you make that investment she will help you to bring her entire family. When you bank with women you bank with the entire ecosystem around her. Ada reinforces our core brand messages and also our focus on women. The promises of chatbots in banking are huge; they are supposed to deliver services to reduce costs, improve the quality and effectiveness of payments and make banking accessible (and free even) to anyone, anywhere, anytime. What is the reality behind these early-stage hopes and dreams? ROBERT: So far it’s realizing those dreams with relatively limited marketing; it is being adopted by our customers and the segment that we want which are young people and women. We’ve got the first early adopters there. What is beautiful about a chatbot compared to a dumb product like a card is you’ve got your product and your feedback mechanism in exactly the same place. If something is not working on Ada like customers saying to her that they want to find a hair salon or something and if enough people tell us that information we will be able to identify that there is a need for in-built costumer demand to be able to find services that are near you. This means we have to build in location-based connection prompt. In terms of our early hopes and dreams, one, we are getting the early stage customer adoption but more importantly we are learning from that core user group what needs to come next in Ada and then we are developing our analytic machine learning capability to take that back into Ada and make it something that is really relevant to the customer. Ada is still a learning journey, she is young and just like a child we are very deliberate in making sure that we help

"Ada means first daughter and we chose it deliberately because we are addressing the female segment of the market. We know that once we get the buy-in from women, they will bring everybody else along. Actually, her full name is Ada Zainab Ajayi, She represents all the major ethnic groups in the Nigeria." PEGGY ORJI her to get the right support and to get the right people around to support her. At the end of the day a chatbot still relies on a great team to help her learn the skills that she needs to learn. We are very deliberate about making sure we take customers feedback to improve Ada and every day you will see different nuances with Ada, the things that she knows and the things that she shares with users and the level of interaction. The early stage is good and a lot more positive than we expected. Is there any plan to use Ada to dominate the market? ROBERT: Dominate is often seen as a 34 34/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

negative word when you talk about the market. Like we said when we launched our credit card business we want other banks to have credit card businesses. The world will be a very lonely place if we were on our own. Competition fosters innovation. It is good to have healthy competition. We have other banks who have launched chatbots and on social media it has taken a life of it is own with people comparing two different banks chatbots -- a male and a female. This has raised awareness to the wider market about the chatbot and the things you can do with it. In terms of dominating the market, our greatest

opportunity is to take the formally banked population from about 40% to 80%. It is not going to take on other bank customers but it is actually to bring the excluded into the financial system whether that is people who are excluded because banks are not willing to serve them yet or are not considered viable customers; or whether they are excluded because banking just doesn’t simply work for them; it’s not convenient and doesn’t meet their lifestyle needs. That is one of the things we want to ensure with Ada. The youths of today who are really not that motivated by traditional banking can see this as an experiential relationship with Diamond Bank and go beyond transactions. What are the challenges of using a chatbot to deliver services? ROBERT: There are always challenges. Challenges and opportunities are sometimes interchangeable and with any digital adoption there are certain segments who are nervous about trying out new things. They are comfortable with their relationship manager and they don’t want that to change. It is just like we came to be the biggest mobile banking app in Nigeria and probably the continent by working with your account officer to help you understand that the app is not taking your account officer away, he is just augmenting that relationship and giving you more so control that if you want to buy airtime or make transfer at 2 or 3 in the morning your account officer may not be available but your mobile app always will be. The chatbot is just a natural evolution and we are using our people to help show and demonstrate Ada to customers so that they can become familiar with it as another way of doing business with us. Ada is both financial and non-financial. She can be a source of information or a channel for transactions. If you are a little bit scared to do financial transactions, you will start off with the non-financial aspect and when you’ve built trust you’ll migrate to it. The other challenge is that data services are not stable across the entire country and that limits the usage beyond the city areas. But you can see the progress that telcos are making in rolling out good data coverage, high speed internet and as that happens you will see greater adoption in rural areas. For now customers will use USSD to bridge that gap. In some way we’ve addressed a bit of the concern by moving into other areas like WhatsApp and Telegram. Facebook is a little bit heavy on data and you may get a little delay while using Whatsapp. It is nothing to worry about. How did you train Ada to have full

knowledge of your product offerings and also know how to express herself in such a way as to be clearly understood by users? PEGGY: We have a strong team behind Ada. She is a robot and she is smart but she still requires human interferance every now and then to train her. We have a team that does the basic programming/integrations on the chatbot and a team that reviews customer interactions and trains her. She does machine learning as well so she picks up enquiries and queries and learns how to respond to them. When people keep requesting for a particular service, the feedback mechanism put in place will be picked up by the team and they would source and integrate those services to the chatbot. Why the choice of the name Ada? PEGGY: Ada means first daughter and we chose it deliberately because we are addressing the female segment of the market. We know that once we get the buy-in from women, they will bring everybody else along. Actually, her full name is Ada Zainab Ajayi, She represents the major ethnic groups in Nigeria. Since she is the first, should we expect her to have siblings, probably a brother? ROBERT: (Laughter) One thing you don’t want to do is confuse your customers with too many different options. What we will see is that chatbots will evolve over time. While she may be Ada as her first name, you may change her name in the future. Regardless of what kind of chatbot it is, whether it is banking chatbots or chatbots from a service company, they will become the best virtual assistant you can have. We will get to where chatbots become your own assistant. You can choose your name and your own avatar; your avatar may be you and you may teach yourself to be your own assistant. That is looking into the future and that is what the world of chatbots and AI’s will become.

and segmenting populations and then you move to predictive analytics which is where Ada is moving to today. We may move to suggestive so as Ada becomes more predictive, she understands what you are likely to be doing from the morning till the evening and will then become suggestive, able to propose things to you that you need to do now that might be non-financial. We are going to see Ada get a lot close to the lives of users.

500

THOUSAND Interactions with Ada within a few months of her debut

32,000+ unique users who have chatted with Ada

60%

Activity / return rate on the platform. S

Let’s look further into that future say five years from now. How do you envision conversational interfaces being used 5 years from now? ROBERT: Just as you see our development of Ada move from Facebook to being agnostic on all chat forums, Ada is likely to be an API that sits as part of your Alexa; in your car and is learning your natural language as you’re having a conversation like we are having in this room. She is just getting to know you better online real time. We are going to see Ada become even more channel agnostic than she is today and if you look at the stages of analytics, we have the basic analytics which is what most of us are familiar with - slicing, dicing 35 /E-PAYMENT REVIEW/ DECEMBER 2018

Whar is your background and what you do for Diamond Bank. PEGGY: Basically, I am Ada’s product manager, I am her mother I can categorically say that. I work with the team that handles all of Ada’s services. We are responsible for training her, adding new services, doing market analysis, researching new trends that we want Ada to deliver and ofcourse adding new features/functionalities proactively. I have been in Diamond Bank for four years and it is my first banking experience. I’m growing and learning and it is good I have a boss like Robert who has gained much experience over the years and is willing to impart knowledge. To add to what Rob said about the future, her features will be leaning towards learning about the customer, their transaction habits, what they shop online, where they spend more with their cards. We are looking at voice interaction which means it is really going to be bigger than what it is today. So we are looking to have something akin to Jarvis in the movie Iron Man? ROBERT: I think with technology anything is possible. We are seeing the kind of conversions of the biggest aspirations and what we need to do is let this be built around customers expectations and needs. We are trying as much as possible to start doing things that add value to the customer’s relationship. We found in Diamond Bank that whenever you do something that customers say has saved them time or money or has helped them build their business or helped them feel more secure, that is the solution that gets to scale and drive a positive wind for both the customer and the bank. I think that AI, analytics and chats are natural language that are going to feature permanently in banking. We see it today with the chatbots in our operation and people have started doing robotics and building bots to do work. As we go forward, they will be very conversant with what people need and this will give people the opportunity to focus on more value adding tasks. The next thing is that Ada may become a hologram which means you can call up an avatar out of your desk and you talk to her.

2018 PERSON OF THE YEAR

SAMI

STANBIC IBTC / LEADSPACE / ACCESS BANK

Stanbic IBTC is future-proofing banking with AI technology

TANBIC IBTC LIKES INVESTING IN TECHnology. With an eye on gaining a competitive edge in the marketplace, the bank is innovating its infrastructure and building out its operational capabilities using artificial intelligence (AI) robotic process automation, to improve the efficiency of its operations, reduce costs and making payment more secure and more stable. Months after it made made a bold push into AI technology with the debut of an intelligent virtual assistant named Sami, the bank began piloting another AI-driven project in the form of robots to drive various dimensions of its operations. The rapdity of these deployments seems, from the outside, to be an indication of a willingness to claim pole position and strong leadership in AI application in banking and finance. Officially unveiled in June, Sami, whose name is Arabic for elevated, is a chatbot leveraging analytics and cognitive messaging to provide financial services to the bank's millions of customers. She’s currently available on Facebook Messenger where she aids customers to facilitate their banking transactions and on Stanbic IBTC’s website as a customer service agent. As an integrated component of the mobile banking experience, Sami is designed to be accessible to clients 24/7 and to perform “day-to-day transactions” in addition to anticipating the unique financial needs of each customer and helping them with a combination of tasks.For example account opening, balance and general enquiries can now be done with a quick chat. The banks is harnessing the tech potentials of Nigeria’s banking populace as a means to provide banking services irrespective of time, place or availability. Stanbic IBTC is a member of South Africa's Standard Bank Group with tentacles in banking, stock brokerage, investment advisory, pension and trustee businesses. The bank introduced robotic automation in October in hopes of reducing manual intervention and eliminating errors in its operations. The processes are carried out not by physical robots but by software applications known as web robots programmed to handle tasks that are often repetitive in nature and normally handled by bank staff. “The Stanbic IBTC robot deployment speaks to our determination to consistently apply innovation and technology to provide bespoke financial solutions to our clients," said Demola Sogunle, Chief Executive, Stanbic IBTC Bank The BlueBots, as the robots are called, were deployed to the bank's operational centres at Ilupeju, Idejo and its headquarters in Lagos to facilitate account origination and servicing for anti-money laundering, transactions and processing, cheque confirmation, credit risk management, personal banking credit assessments, treasury bills processing. With these deployments, Stanbic IBTC has signaled that it wants to be there for customers at all times. Adding AI into its offerings will enable customers manage their simple banking needs more efficiently and consistently. That will help them improve their financial lives.

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OXYGEN

Keystone is enriching the banking experience

EYSTONE BANK’S CONtemporary vision is “to be the preferred platform for delivering convenient and reliable financial solutions.” According to its CEO, Obeahon Ohiwerei, the interpretation is that the bank will consistently leverage people and technology to deliver superior customer experience and enhanced stakeholder value. That is exactly the notion behind Oxygen, the chatbot it launched in July to meet the evolving needs of its customers. Oxygen is an intelligent chatbot that engages in interactive dialogue with customers to fulfil their personal finance management needs like balance information, money transfers, bills payment, airtime top-up, and account balance inquiry. It can be found on Facebook Messenger, mobile apps, and Telegram. “Artificial intelligence (AI) strategy is playing a critical role in driving Keystone’s operations …. AI allows us to improve customer experience by

turning several transaction steps on Internet banking and the mobile app to simple conversations in a chat environment, achieving huge time-saving and convenience for busy customers,” said Ohiwerei in an interview published by International Banker in June. In fact, Keystone wants to be a digitally driven bank that is responsive to the demands of the millennial generation. That is why it developed fully integrated service models that enable customers to access banking services through a wide range of channels. It wants to help them gain greater control over their transactions, accounts and interactions with the bank. Oxygen is just one of many recent additions to its growing list of technology-enhanced digital offerings, including zero data banking and a smart number for customer support. Its mobile banking app now have more features and self-service options for card control (users can enable and disable their cards), access to more vendors, liquidation of fixed deposits and issuance of instructions on recurrent payments. For Keystone Bank customers, Oxygen is already an emergent choice due to its convenience and position as a problem solver and feedback mechanism. Already, there are plans to suffuse it with more capabilities to tackle even more complex tasks. In a future that is AI-driven, that is the meaning of progress.

Access is evolutionizing how banks understand customers emotions

OING BANKING YOURself isn't generally easy. It is an inconvenient task for many people because it involves slow-walking processes and complex stuff like numbers, fractions, percentages, mobile phones, internet data and networks. Access Bank is sensitive to this reality and hopes that a combination of a chatbot and artificial intelligence (AI) can help create a more cohesive and engaging experience for their customers. The bot, personified as female with the given name Tamara, is the bank’s conversational interface that is able to have a tête-à-tête with customers on random topics while helping them with their transactional needs on their preferred messaging channels. She uses the latest in AI and natural language processing to understand user query, quickly respond to customer requests and deliver timely insights and advice in a conversational medium as customers move through the self-banking process. It can also help execute transactions within the chat platform. Tamara doesn’t have an avatar yet but the bank aims to place her at the centre of financial decisions for customers by integrating her across

a variety of digital platforms such as Facebook Messenger, WhatsApp and her own dedicated portal with the link https://www.accessbankbot. ng. The chatbot can smooth account opening processes for new applicants, profile updating for existing customers, and handle account balance checks and funds transfers to other Access Bank customers. It combs through available data sources to automatically provide bank verification number, authorize bill payments, check rates for treasury bills and foreign exchange. It also uses this data to recommend restaurant options, news and trends to users. Tamara is capable of performing other diverse actions such as airtime recharges and card management. It aggregates information from user’s bank accounts to help them request for a payday loan. Access Bank is already extending the chatbot’s capacity to support emerging use cases; making it more intuitive and a more powerful tool for gauging customer sentiment. With a chatbot that is constantly learning from every interaction, and with big data delivering more and better information, the algorithms behind the robot will be increasingly more accurate and the customer experience more personalized. For an organization determined to take its place in the global banking space, this is only the beginning of what is to come.

OCTOPUS

Build your own digital bank

HE OCTOPUS, WE ARE TOLD BY SCIENTISTS, is a highly intelligent creature. In other words, an encounter with one of this eight-limbed molluscs can sometimes leave you with the strong feeling that you have encountered another mind. Similar emotion is evoked by Heritage Bank’s virtual customer assistant, which goes by the name of Octopus and has taken a job in the form of a chatbot giving customers round-the-clock access to the bank and support services via mobile and online channels. Octopus is the perfect example of ground-breaking banking application in artiﬁcial intelligence and conversational banking. It is available on multiple interaction platforms - a webbased interface, Facebook Messenger and Telegram. It has an app through which you can get the experience both on Android or Apple iOS. The chatbot helps customers manage personal finances like balance inquiry, bill payments, recent transactions and even transfers. But more than just being primarily financial, it goes beyond rudimentary customer service tasks. Built with the enterprise in mind, the chatbot has enabled Heritage Bank to innovate digitally in a way that delight customers, and reduces friction. According to the bank, Octopus creates an even better customer experience that is more than digital banking and goes beyond social banking. It enables users to explore movies and buy tickets, create or join events and communities, build audiences and markets for their businesses. Payment on the platform can be done using any bank account provided the linked card is registered on Octopus, the bank said. What is more, Octopus has omni-channel capabilities, which means you can transact across the platform beginning from the mobile app, continuing on the web and finishing on the chatbot. And all this was constructed with local expertise by QuCoon, a Lagos-based fintech startup using AI & analytics to power digital banking. What Heritage Bank has proven is that chatbots don’t have to only, well, chat; they should be at the disposal of the customer needs. And since chatbots don’t stop learning, Octopus' won't stop meeting customer needs.

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2018 PERSON OF THE YEAR

INNOVATION OF THE YEAR

The lending revolution: PayDay Loan by Access Bank

ETTING A LOAN ISNâ&#x20AC;&#x2122;T easy. Getting a personal loan from a Nigerian bank, now that is a tough road to travel. The path from application for a loan to the disbursement of funds is littered with requirements so rugged that successfully meeting them will truss up the recipient tighter than the problem the money is meant to solve. In fact, rejection is the baseline even though the procedure is usually long drawn and affective. From the outset, most loan applications do not even pass the sniff test. They are rejected on criteria like age, income, sureties or proof-documents which do not satisfy the lenderâ&#x20AC;&#x2122;s requirements. Then there is collateral, interest rate and the fact that a voluminous amount of paperwork is involved in the process of obtaining a loan; it is a comprehensive process which needs a cautious assessment of a number of documents. This can be tedious for many people. Collateral value is an important component of the loan. Banks want something you own that they can hold on to in case you fail to pay back the money. Why? Because they are unwilling to give out unsecured personal loans out of the regulatory and business needs to mitigate their risk. And they are notoriously conservative about valuing a borrower's assets for collateral: what you put up for collateral must have a value in an amount that is comparable to the sum of your loan. The impact is that these requirements not only cause a heartache for those who fail to meet them, they end up shutting off many worthy borrowers from the loan ecosystem. There are a number of very good reasons for banks to set eligibility requirements, demand adequate customer information and sufficient collateralization. Banking, after all, is a business of getting your money back so banks want to make good loans. They are interested in lending money to people who are going to return it. But their method for doing this has been moored to the same analogue process that seems to go on forever and has got no advice about

'We are devoting our resources to achieving results and making an impact through the power of finance. As a result, we promote access to banking alongside social inclusion, while contributing to the development of the communities where we are present and preserving the environment.'

HERBERT WIGWE Group Managing Director and CEO Access Bank. 38 38/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

the immediate need for the loan Fortunately, one bank has evolved to serve borrowers the way any modern bank should. It has fashioned a way to fulfill people’s immediate cash needs using a quick and easy method that offers instant loan against the borrower’s salary account. Access Bank, one of Nigeria’s largest banking and financial services institutions is using a technology platform to offer PayDay Loan, a service (also a product) it designed to meet the borrowing needs of the country’s banking customers. The new digital lending platform provides consumers, even customers of other banks, a simple way to get instant loans using USSD or on an app. “With USSD code *901*11#, Access Bank will approve the application for the PayDay Loan almost instantly when you provide the necessary information,” said Victor Etuokwu, Access Bank’s Executive Director, Personal Banking. "The application process is simple and quick. Loan applicants can get up to 75 per cent of their monthly salary in less than five minutes.” Given the growing focus on creating efficiencies and automating processes, it is perhaps surprising that Access Bank is the first and only banking platform to have made real progress with the automated offering of instant loans. While instant loans are being provided by a few fintech companies, the latitude of Access’ lending carry on an execution far greater than simple innovation. When PayDay Loan or Salary Advance Scheme, as it is formally known was launched on Nigeria’s independence day in October last year, it answered a pressing need for automation in banks’ loan market. For one, it signaled that the clunky manual processes for obtaining a loan need to be eliminated. It also serves as a perfect specimen of what could be achieved through financial technology and banking industry collaboration. Payday Loan was crafted in affiliation with digital multi-platform, Remita to meet Access Bank’s risk acceptance criteria. By partnering with Remita, the bank enhanced its agility and promptness to go beyond physical footprint to serve a broader audience of loan seekers and better meet tech-savvy consumers’ needs for a safe, fast and easy way to borrow money. The entire process of obtaining a loan – application to disbursement – takes places on the mobile phone, online at www.mypayday.ng or via QuickBucks, an instant loan app from Access Bank that is available on Google Play Store. Each channel is easy and does not put applicants through their paces. For the USSD, just dial the code and follow the prompts, respond to the menu options and get a fail or success message, which shows the end of the process. For QuickBooks, you have to download the app, signup with your email address and BVN-linked phone number, receive an OTP that confirms the phone number and validates the. App. Then you proceed to update your profile with details of your location, bank account number, monthly salary and close out the process with your preferred password and 4-digit PIN (which will be used for authenticating all transactions). If you are eligible, you will be shown how much you can borrow and you will receive the amount you requested for in about a minute after it has been approved. Eligibility is also simple: you can either have a salary account domiciled in Access Bank or be a Remita customer. The chances of being a Remita user is high. The digital platform is used by many corporate organizations, multinationals, governments agencies, SMEs, NGOs, religious groups, associations, educational institutions, health organizations, utility companies, and individuals to facilitate payments. The beautiful part of the PayDay Loan process is that beneficiaries don’t need to offer collateral or a guarantor to be granted a loan. Loan amounts could range from a thousand naira to half a million bucks depending on how much you earn. The tenure is a maximum of 31 days or the day the next salary is paid – whichever comes first. Once the loan matures on either of the earlier mentioned days, the repayment is deducted directly from borrower’s account. The interest rate is at 3% flat. “When you dial the code, you get a response that tells you how much you can borrow, and the fees and charges that apply. We consider how much you earn as salary, where you work, whether

you are indebted to any other financial institutions and where you do, if you are able to manage an additional loan. We conduct other checks to ascertain your suitability before a loan is approved and disbursed,” said Chinedu Onuoha, Assistant General Manager and Head, Channels Operations and Services, Access Bank in an interview with E-Payment Review. All those processes are algorithm-based and take place in seconds. According to him, the process has to be that easy and convenient because access to instant credit is becoming universally mainstream. Consumers expect a simple application process from their mobile devices, a decision made in seconds and approved, and the borrowed funds deposited directly into their bank account within minutes. As Onuoha spoke, he demonstrated how the process works both on USSD and the QuickBucks app. The application took less than a minute and he got an instant decision. PayDay Loan is truly that easy. Access Bank thought up this idea with the knowledge that consumer behaviour has shifted significantly. So, it designed the loan to be flexible enough to offer a full suite of benefits to support life experiences. Like Onuoha puts it, ‘salaries come only once a month but the challenges of life, unfortunately, don’t look at the calendar.’ Such sentience and intuitiveness are why PayDay Loan has become a competitive differentiator in Nigeria’s economy. People use it to pay for unexpected expenses, or meet needed domestic costs, among other things. Judged by the success of this service, Access is showing itself to be forward-thinking and cutting– ACCESS BANK THOUGHT edge. And that is its forte. “The markets in which we operate UP THIS IDEA WITH THE are among the most challenging in KNOWLEDGE THAT CONthe world, with multiple developSUMER BEHAVIOUR HAS mental issues. While these chalSHIFTED SIGNIFICANTLY. lenges create opportunities, we are SO, IT DESIGNED THE LOAN devoting our resources to achieving results and making an impact TO BE FLEXIBLE ENOUGH through the power of finance. As a TO OFFER A FULL SUITE OF result, we promote access to bankBENEFITS TO SUPPORT LIFE ing alongside social inclusion, EXPERIENCES. while contributing to the development of the communities where we are present and preserving the environment,” Herbert Wigwe, Group Managing Director and CEO of Access Bank is quoted by World Finance. Beyond the innovation of PayDay Loan, Access Bank has achieved broader success in facilitating financial sustainability in Nigeria and delivering value-adding financial products and services to their corporate and individual customers. The bank has led the crusade to stimulate a savings culture among Nigerians. Last year, it launched a savings scheme, it christened the Family Banking Scheme designed to encourage families to save while the bank rewards their saving habit with exclusive privileges such as high interest rates. In 2014, Access Bank unveiled the “W” initiative to boost female entrepreneurs in Nigeria with privileges that include access to loans and credit facilities as well as a communal group where they can gain insights into family matters and finance management. Each scheme was carefully constructed in line with the bank’s economic empowerment and financial inclusion ethos. The bank is immersed in a five-year strategy to become Africa’s gateway to the world. It joined a host of financial institutions from around the world in 2017 to sign the “Karlsruhe Resolution,” which offers institutional support for the U.N.-backed Sustainable Development Goals (SDGs) and the Paris Climate Agreement (COP21), collectively referred to as Agenda 2030. Access Bank has consistently positioned itself to lead the innovation conversation among financial institutions by leveraging on technology to provide fast, secure, reliable and seamless cross border transactions experience for Nigerians and Africans. PayDay Loan is an example of the kind of innovation that has supported the bank’s surge in popularity.

39 /E-PAYMENT REVIEW/ DECEMBER 2018

2018 PERSON OF THE YEAR

THE INTERVIEW

Driving culture change for innovation in credit Assistant General Manager and Head, Channels Operations and Services at Access Bank, Chinedu Onuoha paints a picture of the starting point for changing the culture of credit in Nigeria with digital lending and why his organization is using PayDay Loan as a mechanism for getting there

CHINEDU ONUOHA

CCESS BANK’S PAYDAY LOAN has been described as the most innovative financial product in the market today. Could you explain why this is so and how it works? Yes, it is the most innovative product in this market today. Prior to the introduction of PayDay Loan, getting access to credit in Nigeria was very tedious both for the borrowers and for the banks who process the loans. The requirements were complex and difficult to meet for the average person. For you to get a personal loan from a bank most of the time, you will have to fill a form, take it to your account officer and you’ll be asked to get a letter from your employer and sometimes bring a guarantor. In many cases, you may not still get the loan. What we have done with PayDay Loan is to enable people who earn salaries, who have means of livelihood to have access to funds to meet their day-to-day obligations within their earning capacity and without hassles. We first started offering this service on the USSD channel via *901*11#. When you dial the code, you get a response that tells you how much you can borrow, and the fees and charges that apply. We consider how much you earn, where you work, whether you are indebted to any other financial institutions and where you do, if you are able to manage an additional loan. We conduct other checks to ascertain your suitability before a loan is approved and disbursed. Initially, we limited the product to our internal customers before extending it to customers of other banks through our digital collaboration with major e-payment companies. Today over three million Nigerians can access the product from their mobile phones through USSD, mobile banking, or through QuickBucks – our innovative loan app. Customers can also access the service through any of the 2,000 Access Bank ATMs across Nigeria. What would lead someone to consider the PayDay Loan? For most people, salaries come only once a

month but the challenges of life, unfortunately, don’t look at the calendar. Today, people are able to weather these challenges by sometimes begging from their colleagues and families at a cost to their dignity. With this understanding, we created PayDay Loan as an instant solution for such challenges. Our objective is to ensure that as long as you are a Nigerian and you earn a salary regularly there is no reason you can’t have access to credit. We consider it a recognition of the changing nature of financial services. In the last one year, we have issued about two million loans. This also speaks to the power digital innovation brings to the table. Using the traditional processes, it would have been a lot of work for a bank to offer 50,000 loans in one year. What makes it different from other loans that you give apart from its instant nature? What kind of flexibility does it allow in terms of payment and repayment? One, because it is tied to your salary, repayment is easy. When you take a one-month loan, it is like taking a salary advance that you commit to pay back from your next salary. For the three and six-month loan, you’ll stretch the repayment over this period. So it is a choice you make. We conduct a lot of data analytics at the back before we determine the nature of the loan to make available to the customer within our risk management framework. We think that is what is required to build up and stabilize the consumer market in this country. Access Bank partnered with fintech companies to create and offer this service. What benefits do you see in this partnership? The partnership opened us up to be able to serve more Nigerians. It has made it possible for us to be able to solve a basic problem for our customers. Before this innovation came, people could only collect loans from their banks but now you don’t need to have an account with Access Bank before you can get a loan but what we do at the point of giving you the loan is to open an instant 40 40/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

account for you and put the money there so you can access it from your phone or via the ATM. We are innovating around the lifestyle and needs of people. Why are you not making too much noise about it? Because a good product sells itself. The fact is customers will always care more about the benefits of a product rather than the marketing surrounding it. We are able to reach out directly to the over 3 million workers. We believe this is a good base to focus our digital marketing effort on for now. I am sure it will extend to the rest of the market. What are you doing to scale up from 3 million plus customers, maybe from January? How we are doing that is more of a business strategy. Just know that we are doing all that we can to bring more Nigerians to buy into our PayDay Loan. We are perfecting our strategy to expand our market share in the new year. We launche it last year and this year we have increased by 1400% and next year is going to be similar. What is the distribution of those who are taking this loan around the country? Our customers are all over the country. Most of them are in the public sector. How would you define your average consumer? Initially when we started we thought it was going to be used mostly by people who need a quick loan but different people are using it in different ways. Since this is a technology driven product, we see people of all income levels, but the majority are mostly middle-income earners. There are also others who may not fall into this category. Now that it is tied to salaries, what happens to private business owners? Is there a plan to extend credit to them?

The adoption of every new innovation must start from somewhere. We have started with salary earners and without leaking any future plans, I’ll just say that it’s going to get to everybody who has a source of income. We must start from somewhere to build and then scale up. What is important in giving anybody loan like we say in banking is we are not just looking at the return on the money but we are also looking at the return of the money. With every digital process, there is a learning curve and growth. If you go online to search for pay-day loan, you will get a lot of disreputable things being said about the name itself. Some people believe payday loan system is exploitative. Why did you choose that name? When we decided to start this product, we needed a name that can be tied to the product lifecycle, one that the target audience could easily relate with. That informed the choice of the name PayDay Loan. As we continue to provide this service to Nigerians in a sustainable manner, people will learn more about our offering and by so doing, separate it from any other solution with similar name they might have experienced

OUR OBJECTIVE IS TO ENSURE THAT AS LONG AS YOU ARE A NIGERIAN AND YOU EARN SALARY REGULARLY THERE IS NO REASON YOU CAN’T HAVE ACCESS TO CREDIT. WE CONSIDER IT A RECOGNITION OF THE CHANGING NATURE OF FINANCIAL SERVICES.

in the past. As you know, a lot of the borrowers are experiencing it for the first time. In the next one or two years, people are going to understand it better and appreciate the value it is delivering to them. The people that will appreciate the value will be able to use it to solve their problems.

DIGITAL LENDING INNOVATION Chinedu Onuoha, Assistant General Manager at Access Bank says dynamic business and technology forces are driving the need to foster a high-performance culture, and be future-ready. His organization is automating the process of lending to transform the banking culture and to improve customer experience. 41 /E-PAYMENT REVIEW/ DECEMBER 2018

There are fintech firms that are also doing instant lending, ow does Access Bank’s PayDay Loan differ from what these fintech companies are doing? The market is large enough for all players. As they say, the more the merrier. Incidentally, PayDay Loan is part of our digital banking business which operates from a fintech mindset in terms of innovation and agility. The differences will begin to emerge when you realise that one, we are here for the long haul. So we operate within the disciplinary framework required for sustainability. Secondly, we have deeper understanding of the customers. As a result, we are able to offer solutions that match the earning power of our customers. Finally, we have the financial muscle to serve a lot more qualifying customers than a fintech would.

NEFF INSIGHT

PRACTICAL ADVICE FOR THE MITIGATION OF PAYMENTS RISK BY THE NIGERIA ELECTRONIC FRAUD FORUM

WESTERNLIFENEWS / TWITTER - HERITAGE BANK

HE TWIN FORCES OF MOBILE TECHNOLOGY AND open banking regulations are upon us, and both are changing the cozy relationships that had existed for decades, if not centuries, between traditional banking institutions and their customers, and in ways unimagined only a few years ago. We are seeing a huge adoption of mobile banking and payment services in Nigeria and across the world as consumers choose convenience and immediate transaction consummation, over arduous branch visits and interactions through other banking channels, including telephone and Internet banking. In the UK for example, the number of branch visits fell from 476 million in 2011 to 276 million in 2016, while mobile logins increased from 169 million to 1,191 million over the same period. Projection for 2021 is even more dramatic, with mobile logins rising to close to 3.5 billion, as other channel interactions fall. The growth outlook for Nigeria may be more tempered due to infrastructure limitations and consumer trust issues, but overall, lower and more affordable mobile data cost is spurring increasing usage; a win-win outcome for consumers and the banks convenient access to anytime-anywhere banking services and the banks get to reduce branch overheads, cultivate stronger relationships with customers through more frequent digital interactions and innovative lifestyle-tailored services. What is not to like? A second wave of disruption foreshadows risks and opportunities for incumbents and new banking entrants alike, as regulators seek to drive increased competition and innovation in financial services by setting the rules of engagement for open banking. New open banking regulations will require banks to share customer account data which they previously kept and used for competitive advantage such as in measuring lending risks. Open banking is underpinned by technology that enables seamless exchange of customers' account information between their banks and new third party financial services vendors, through application programming interfaces (APIs). The interface weaves disparate applications together, enabling them to 'talk' to each other and share customer's financial data when consent has been given. Banking incumbents will be required to publish APIs for 3rd parties to perform transactions such as check account balance, initiate payment, add new payee, check availability of sufficient funds, etc. These 3rd parties, fintechs and of course, the banks themselves, will be able to offer sophisticated account aggregation services, and many yet unimagined services to consumers using the information. This expected wave of open and connected banks, fintechs and the big tech firms will further transform the financial services landscape. Revised Payment Directive (PSD2) Open Banking Regulation in the EU, Open Banking Standards in the UK and similar regulations in Singapore, Australia and elsewhere are examples of emerging open banking regulations which will level the playing field for new market entrants and foster a new era in payments and other banking services. PSD2 in particular will impact Nigerian banks with presence in the EU, but others at some points in the future, as the regulation applies to transactions even when one of the payment service providers is located outside of the EuropeanEconomic Area. With open banking, we might yet see a time when customers are able to switch bank accounts much as they switch mobile phone service providers today (this was enabled by technology and telco regulations such as easier number porting). With customer access to more financial services, consumed mostly via digital channels, comes the elephant in the room trust and real-time fraud prevention, amongst other challenges. Let's face it, another competitive advantage enjoyed by the bank over new entrants (in addition to the rich trove of customers'

MOVING FORWARD SECURELY IN THE AGE OF MOBILE AND OPEN BANKING BY MIKE ODUSAMI

L-R: Director, Services/Chief Information Officer, Heritage Bank Plc, Ike Williams; Executive Director, Technology and Operations, NIBSS Plc, Christabel Onyejekwe; former Chairman, Nigeria Electronic Fraud Forum (NeFF), Dipo Fatokun and Director, Other Institutions Dept, CBN, Tokunbo Martins, at the sponsored 1st Annual General Meeting of NeFF at Federal Palace Hotel, Victoria Island, Lagos in June.

L-R: Chief Audit Executive, Heritage Bank Plc, Prince Akamadu; Director, Services/Chief Information Officer, Heritage Bank Plc, Ike Williams; and Group Head, Internal Control, Olusoji Adeyeye, at the sponsored 1st Annual General Meeting of NeFF at Federal Palace Hotel, Victoria Island, Lagos.

financial data for assessing lending risks) is the trust they have built up with banking customers over the years. They will do well to protect this advantage from new players as they explore new business models. Customers who are too afraid of online scams will default to avoiding online or mobile banking and online pur-

42 42/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

chases, altogether, even though they may still be vulnerable to telephone scams. Customers will however, be more willing to perform highervalue transactions using their mobile devices or trust 3rd parties with access to their financial information, when they have assurances that the transactions are secure, confidential, and protected from fraud exposures. For financial institutions, prevention of frauds in an era of minimal human interactions, instant payment services, and data access by 3rd party providers pose additional sets of risks. These security risks are not insurmountable, and mitigating them calls for a different and multi-layer approach to fraud prevention across multiple banking channels, while keeping an eye on customer convenience. In our various consulting engagements with customers, we highly recommend a risk-based approach to fraud prevention executed in '3D' to address the unique risks posed by the increasing adoption of mobile banking and in readiness for open banking regulations. We call it 3D because the approach protects 3 critical components of every mobile banking transaction: 1.) Secure the mobile device. 2.) Secure the communication channel with the bank and 3.) Evaluate transactions to assess the level of risks involved and invoke appropriate fraud policy established by the bank, such as limit transaction amount, request a higher level of authentication, or allow if it is a recurring transaction. - hence a risk-based fraud protection. Let us start with fraud risks in mobile devices and how they can be mitigated. No doubt, the riskspresented by malwares and Trojans of the PC/online banking era have now been migrated to mobile, but on a much larger and sophisticated scale, with over 5M apps uploaded on Google Play and Apple App stores alone, and many more on unofficial app stores2. Many banking frauds have been committed with information delivered by malware-injected apps disguised as legitimate apps and downloadable with a single click on attractive pop-up adverts. Once such apps are installed by unwary users, the infected app is able to take command of the device, silently grab screen shots, read and send SMS messages, capture PINs keyed in mobile banking apps, and perform other stealth actions. Many banks in Nigeria still use static app passwords unfortunately, making them especially vulnerable to these types of exploit. In one troubling incident on malwares, a 'free' mobile tool used by software developers for creating mobile apps was discovered to be infected, guaranteeing that every app created by developers using the tool already have malware embedded in the codes! Although, mobile devices have built-in security protections that can prevent or warn users from installing untrusted apps, these protections are meaningless if the phone is already rooted or jailbroken - i.e. restrictions on apps imposed by the mobile operating system are removed, to gain access to 'cool' capabilities. Android devices are more likely to be jailbroken due to its more open ecosystem of device manufacturers (when compared to Apple). Compounding the problem is a recent discovery that some low-end devices are now sold jail-

broken out of the box - creating a perfect storm of highly vulnerable devices with unrestricted access by malwares! With a very high percentage of jail-broken mobile devices sold in the developing world including Nigeria, banks and non-bank financial entities face a business conundrum of having little or no control on the conditions of customers' mobile devices, while seeking to provide secure, convenient and frictionless access to innovative financial services. After all, a customer simply wants to view his account, initiate payments, transfer funds and perform othertransactions, in a user-friendly environment. To create the necessary balance between fraud prevention and customer's convenience, we start by first identifying the customer and the device registered to the customer's bank account. This is done using various techniques, including a simple customer's enrollment and secure device activation process which ties unique hardware characteristics of the registered device with known customer's bank account. Once the device is bound only transactions and one-time passwords (OTPs) generated by the device (mobile authenticator app) will be

tions or for stealth data exfiltration. Run-time application self- protection safeguards against real-time attacks on apps running on the device while secure storage ensures that data stored on the device is encrypted (minimum 300 times on low-end devices) and protected against data theft, device cloning, or access to sensitive data if the device is lost or stolen. The second aspect of the 3D protection approach is to secure the communication channel between authorized customer devices and the bank to prevent common mobile channel and social engineering attacks such as man-inthe-middle, man-in-the-browser and channel eavesdropping attacks. Secure communication encrypts the transaction information and guarantees that only the banking system and trusted customer device can interpret or visually read banking transaction data using a secure form of QR code. Secure communication is further augmented with push-notification, an out of band technique whereby live transaction information is sent via a separate communication channel to the same or a second trusted device owned by the customer for approval. For example, an online banking transfer may

CUSTOMERS WILL BE MORE WILLING TO PERFORM HIGHER-VALUE TRANSACTIONS USING THEIR MOBILE DEVICES OR TRUST 3RD PARTIES WITH ACCESS TO THEIR FINANCIAL INFORMATION, WHEN THEY HAVE ASSURANCES THAT THE TRANSACTIONS ARE SECURE, CONFIDENTIAL, AND PROTECTED FROM FRAUD EXPOSURES.

accepted by the banking systems. This effectively stops SIM-swap and device cloning exploits dead in their tracks! Combined with two-factor authentication (2FA) - hardware tokens or PIN/ biometric protected mobile authenticator app -which the financial sector is already familiar with, device binding enables us to uniquely identify the user and trusted device registered to access the account. By the way, 2FA forms the bedrock of the recommendation for Secure Customer Authentication (SCA) in the regulatory technical standard defined in PSD2 and will be required by banks and nonbank service providers for compliance. A word of warning - SMS OTPs are still being used extensively for 2FA by many banks in mobile banking apps and for USSD transactions, but recent SMS channel exploits such as SIMswap and mobile network compromise (Signaling System 7 or SS7 security loopholes), have made this form of authentication vulnerable and attractive to fraudsters. It is generally being discouraged by financial regulatory authorities around the world or recommended for usage only in transactions with low monetary values. A second layer of device security protection may be added to secure vulnerable areas of the device such as installed apps and data storage areas, even when the device is jail-broken as discussed earlier. Installed apps are protected from code changes and reverse engineering exploits when malwares are injected to disable app security protec43 /E-PAYMENT REVIEW/ DECEMBER 2018

need to be approved on the customer's mobile device for completion. It is instructive to note that a second component of the PSD2 standard is a requirement to establish secure communication channel between customers and their financial service providers. This recommendation meets or exceeds the requirement. The last but not the least protection in the 3D triumvirate, is focused on risk-based fraud protection, built on user behavior and device indicators such as trusted geographic location, known Wi-Fi network, if device is jail-broken or not, change in stored biometric data on the device, etc. By tracking these indicators and assigning an appropriate risk score, a transaction may be blocked or approved after additional authentication is supplied by the customer depending on established rules. The information may also be sent to a back-end fraud analysis system for more comprehensive fraud policy enforcement and actions. In summary, banks and non-bank financial services providers are facing increasing pressure to evolve new digital channel business models as new open banking regulations and increasing competition. Mike Odusami is the CEO and President of Maxut Consulting, a digital channel and fraud security solutions consultancy based in Lagos, Nigeria and Oakland, USA.

Culled from 2017 NeFF annual report.

THE RISK REPORT THE HELM PERSONAL SERVER

This mini-server gives you back control and ownership of your data A STARTUP CALLED HELM AIMS TO make it easy for you to own your data, and manage it locally on a personal server at home. It created this simple device that you can use to store things like photos and videos, and to host your own email, contacts list, and calendar. You set up a Helm server in your house, office, or wherever with a mobile app, and can then access your own personal email server and cloud from all your devices anywhere. And the data on the device can't be copied or accessed without a physical security token for multi-factor authentication. The idea is to get convenience from

RESEARCH ANALYSIS

ATMs vulnerable to attacks that could be executed in 10 minutes or less MANY ATMS FROM THREE OF THE WORLD'S manufacturers are vulnerable to a host of physical and network attacks. An extensive testing session carried out by bank security experts at Positive Technologies revealed that most ATMs can be hacked in under 20 minutes, and even less, in certain types of attacks. The research which took two years looked at ATMs from NCR, Diebold Nixdorf and GRGBanking. They found that 69% are vulnerable to Black Box attacks, where crooks connect devices to cash dispensers and force the ATMs to spit out money. Performing the entire attack — connecting the device to the ATM, bypassing security, and collecting the cash — would take just 10 minutes on some ATM models, they said. The researchers also found that 85% of ATMs are poorly secured against network attacks such as spoofing the processing centre. As a result, a criminal could interfere with the transaction confirmation process and fake a response from the processing centre in order to approve every withdrawal request or increase the number of banknotes to dispense. About 27 percent of the ATMs were vulnerable to

processing centre spoofing while 58 percent had exploitable vulnerabilities in their network services due to poor firewall configuration or outdated software. Exiting kiosk mode was possible on 76% of tested ATMs, which is an issue because when restrictions placed on ordinary users are bypassed an attacker can run commands in the ATM operating system. Estimated time necessary for this attack: 15 minutes. A failure to implement hard drive encryption makes 92% of ATMs vulnerable to a number of attacks. An attacker could connect directly to an ATM hard drive and, if the contents are not encrypted, infect it with malware and disable security mechanisms to control the cash dispenser. "To reduce the risk of attack and expedite threat response, the first step is to physically secure ATMs, as well as implement logging and monitoring of security events on the ATM and related infrastructure," said Leigh-Anne Galloway, cybersecurity resilience lead at Positive Technologies. "Regular security analysis of ATMs is important for timely detection and remediation of vulnerabilities."

ECOSYSTEM

WIRED / SUPEREVA

Machine learning creates fake fingerprints that fool biometric systems

FAKE DIGITAL FINGERPRINTS CREATED BY ARTIFICIAL INTELLIGENCE CAN FOOL SCANNERS on smartphones with a 20% false-positive rate, raising the risk of hackers using the vulnerability to steal from victims’ online bank accounts. Scientists at New York University and Michigan State University developed machine learning methods for generating fake fingerprints - called DeepMasterPrints - that not only dupe smartphone sensors, but can successfully masquerade as prints from numerous different people. The research capitalizes on the shortcuts that mobile devices take when scanning a user's fingerprint. Sensors obtain only partial images of users’ fingerprints at the points where they make contact with the scanner. So they make some assumptions based on a snippet, which also means that fake fingerprints likely need to satisfy fewer variables to trick them. Since partial prints are not as distinctive as complete prints, the chances of one partial print getting matched with another is high. When robust, this would make the current generation of fingerprint readers obsolete as secure biometrics. 44 44/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

third-party web services without letting your data live in someone else's server farm, thereby reducing your exposure to targeted advertising, government surveillance, and data breaches. "This is the first time that people will have an alternative to the existing way they live their lives online," said Giri Sreenivas, co-founder and CEO of Helm. "Our goal is to know as little about our customers as possible." The vision for Helm draws on fundamental internet concepts, namely that the web is more robust and free when it is decentralized, and everyone contributes a small piece of a larger whole.

Synthetic identity fraud to drive $48 billion in annual losses by 2023 FRAUDSTERS ARE USING FRAGments of real data gleaned from breaches to create new, synthetic identities, as they slowly move away from pure identity theft, researchers found. “When criminals use a blend of different people’s data, as well as some entirely made up information, it becomes harder for law-enforcement officials to both realize the crime and then locate the culprit,” said Department of Justice. R. Sean McCleskey, a retired United States Secret Service agent. Juniper forecasts that money transfer will be a particularly vulnerable area, with the global rise in instant payment schemes and a focus on transactional rather than behavioral risk. Fraud losses are projected to increase by over 20% per annum to $10 billion in 2023. “Synthetic identity is currently the low-hanging fruit because, even though it takes time for fraudsters to establish, many of their targets are not set up to detect the behavioural giveaways that indicate this type of fraud,” said research author Steffen Sorrell. The report recommends a holistic approach to fraud prevention, that includes a strategy to assess and mitigate risk from a cybersecurity perspective.

THREAT LEVEL SWISS ARMY KNIFE // Cybercriminals have created multipurpose malware that uses the lethal combination of data stealing, cryptomining, and snooping capabilities as a go-to product for attacking Windows machines, according to cybersecurity researchers from enSilo. The software called L0rdix is relatively new, but has been developed with stealth in mind and is available for purchase, Zdnet reported. The malware allows attackers to get full information about the targeted PCs. After receiving the required information, the attackers can execute commands, upload mining modules, and other malicious activities. FESTIVE HACKING SEASON // As online sales boom in the run up to Christmas, cyber criminals are increasingly exploiting the holiday period in order to conduct malicious campaigns designed to conduct spear-phishing and deliver malware. Security researchers at Carbon Black warn that both individuals and organisations should expect to see a rise in attempted cyber attacks during the holiday season. Attackers will try to take advantage of Christmas break when most companies security teams will be understaffed and employees are more likely to travel and work remotely. VPN ALARM BELL // Roughly 60 percent of the top free mobile VPN apps returned by Google Play Store and Apple Play Store searches are from developers based in China or with Chinese ownership, raising serious concerns about data privacy, research by Metric Labs has revealed. This is worrisome especially for businesses that use these apps. Data exchanged via these VPNs, some of which may be company trade secrets, may end up in the worst case scenario logged on Chinese servers, where it may be at the disposal of Chinese authorities.

INTERNET SECURITY

Even phishing sites now have the padlock REMEMBER WHEN YOU WERE ADVISED TO look for the padlock symbol at the top of a website before entering your password or credit card information into an online form. It is well-meaning advice that has turned out to be a dangerous one. New data shows that half of all phishing scams are now hosted on Web sites whose Internet address includes the padlock and begins with “https://”. Anti-phishing company PhishLabs found that 49 percent of all phishing sites in the third quarter of 2018 bore the padlock security icon next to their domain name as displayed in a browser address bar. That’s up from 25 percent just one year ago, and from 35 percent in the second quarter of 2018. This alarming shift is notable because a majority of Internet users have taken the age-old “look for the lock” advice to heart, and still associate the lock icon with legitimate sites. A PhishLabs survey conducted last year found more than 80% of respondents believed the green lock indicated a website was either legitimate and/or safe. In reality, the https:// part of the address (also

BIOMETRIC SECURITY TO WEARABLE PAYMENTS Hong Kong based wearable payment technology company Tappy Technologies has unveiled a new watch strap design that combines its existing contactless payments module with a passive fingerprint sensor that can be used to increase the security and transaction limit of wearable contactless payments. To make a payment with the solution, users simply press their finger to the sensor, which fits snugly into the surface of the watch strap, as they bring their watch within range of a contactless POS terminal.

FRAUD BY NUMBERS

TAPPY

called “Secure Sockets Layer” or SSL) merely signifies the data being transmitted between a browser and a site is encrypted and can’t be read by third parties. The presence of the padlock does not mean the site is legitimate, nor is it any proof the site has been security-hardened against intrusion from hackers. “PhishLabs believes that this can be attributed to both the continued use of SSL certificates by phishers who register their own domain names and create certificates for them, as well as a general increase in SSL due to the Google Chrome browser now displaying ‘Not secure’ for web sites that do not use SSL,” said John LaCour, chief technology officer for the company. “The bottom line is that the presence or lack of SSL doesn’t tell you anything about a site’s legitimacy.” Major Web browser makers work with a number of security organizations to index and block new phishing sites, often serving bright red warning pages that flag the page of a phishing scam and seeking to discourage people from visiting the sites. But not all phishing scams get flagged so quickly.

OVER 4.5 BILLION DATA RECORDS WERE COMPROMISED WORLDWIDE IN THE FIRST HALF OF 2018, GEMALTO'S BREACH LEVEL INDEX SHOWS. THIS IS EXPECTED TO GET WORSE IN 2019.

$1.1 billion $1 million

6, 500

28.72%

Amount that a North Korean hacking group tried to steal from at least 16 financial institutions around the world since 2014 using the Swift network, according to security specialist FireEye, which warns that the criminals are still operating.

Dark Web services lost after hackers took down Daniel’s Hosting, one of the Dark Web's hosting providers and obliterated all its client data. It is not possible to recover them because there are no backups, the owner Daniel Winzen said.

WannaCry's portion of all users targeted by cryptors in Q3 2018, according to Kaspersky Lab’s Q3 IT threat evolution report. One and a half years after its epidemic, the ransomware has attacked 74,621 unique users worldwide

Funds stolen by a 21-year-old New York man from a Silicon Valley executive after taking control of his phone number in a SIM swap scam and going on to invade his accounts with two digital currency exchanges, according to a CNBC report..

45 /E-PAYMENT REVIEW/ DECEMBER 2018

2018 YEAR-END EDITION ROUNDTABLE

Unleashing the potential of banking and fintech partnership As the transformation of financial services continues, this Roundtable looks at how fintech companies and banks can work together to deliver innovative solutions and superior customer experiences to an increasingly digital consumer.

OW ARE NON-BANKING operators shaping the landscape of banking industry? NWOJO: Non-banking operators could be referred to as the Fintechs and Bigtechs who are providing financial services to the banked and unbanked customers. Their impact has mostly been felt around payments in addition to providing credit to specific customer segments, who the traditional banks are not willing to extend credits to. Leveraging technology - primarily mobile - these non- banking operators are developing narrowly defined, but highly effective solutions; providing customer-centric financial services in a cost effective, user-friendly manner, empowering the customer to do so much, seamlessly. ADEBOLA: Relying on technology, non-banking operators are able to provide certain services that promote accessibility and penetration of banking services. With their agile nature, non-banking operators are able to creatively devise technological solutions to cater the banking needs of consumers. Such creative innovations may be challenging for a bank due to regulation and internal control processes. EZE: There are several players that have together helped to transform financial services beyond what they used to be. Although the customer-facing members of that ecosystem are mostly banks, there are several other players who are non-bank operators. Fintechs form the core of the later segment. The role and contribution of fintechs in close collaboration with the banks, is significant in extending the frontiers of possibilities as far as customer experience is concerned. Fintechs in the Nigerian financial ecosystem are leveraging innovative and emerging technologies towards helping customers of various banks and users of financial solutions and services, drill down to the very base of their needs and enabling them enjoy new and existing services in a transformative and efficient fashion. Todayâ&#x20AC;&#x2122;s financial services is being reshaped by non-bank operators particu-

RESPONDENTS Emmanuel Eze Executive Director / Chief Technology Office, SystemSpecs Adebola Adeyemi Partner PAC Solicitors Olabode Olaoke Senior Manager PricewaterhouseCoopers Bob Nwojo Head, Acceptance Business FirstBank

larly in terms of possibilities beyond the provision of services like savings and loans to customers. Now with the support of non-banking operators, services like lending, financial literacy and education, retail banking, investment, insurance as well as loans and credits have been taken notches higher; and such services are now extended to a segment that hitherto would never have been considered eligible for such. This has generally helped to improve financial inclusion by extending financial products and services to the unbanked and under-banked. OLAOKE: They are innovating and releasing products and services that are keeping the banks awake to their responsibilities, from Loans to savings products with easy deposits, attractive rates and apps that make the entire process seamless. Has fintech triggered a culture shift in banking or are banks resistant to change?

EMMANUEL EZE, PhD Chief Technology Officer at SystemSpecs who creates solutions for businesses in Nigeria and Africa. His doctorate is from The University of Hull and he is an alumnus of the Said Business School, University of Oxford and a Fellow of the British Computer Society and Nigeria Computer Society.

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EZE: Financial Technology has definitely triggered a culture shift in banking. It would be an understatement to say that banking today is the same as it has always been, and with the swift pace of development in the industry especially as triggered by technological advancements, banking in the future would be a lot more different from what it is today. However, the extent of culture shift in various financial institutions will largely be dependent on their measure of innovation and technology adoption. With these progressions, financial industry players in Nigeria are taking a new approach to their operations with a focus on improving customer experience - covering every aspect of customer interface with the financial institution. Nowadays, account opening, which once was a big deal, is perhaps one of the simplest activities to carry out. With as little as a text message, a USSD code or a social media log-in, a new bank account can be opened, at any time of day. Other areas where there have been a change in banking is in customer service and transactions management. Now, banks have adopted a lot of financial intelligence in these aspects. Smart Data is now a significant part of our finance and customer management systems. ADEBOLA: Banks perceive the advantages in driving financial services with technology. The financial products

introduced by a number of banks demonstrate this. Banks are increasingly recognizing the benefits of using technology to drive their business. OLAOKE: I guess this depends on individual banks and their vision as well as the body language of the leadership. Some banks, surprisingly, have really re-invented themselves to stay relevant and seem to have a 360-degree culture shift (I'd even say mentality shift). There is an old generation bank that I never imagined doing any business with, but with the release of their digital banking product and because they address real-life use cases. I now use them frequently. This is the result of the impact of fintech on the banking industry. NWOJO: Definitely, there is a shift, albeit slow, in the way traditional banks are approaching the delivery of financial services to their customers. New fintech entrants are solely responsible for this. I would not say that banks are resistant to change, as the threat of reduced future growth opportunities is clear; however, according to new research from Accenture, most banks are struggling to find the right mix of investments in traditional and digital capabilities as they balance meeting the needs of digital customers with maintaining legacy systems that protect customer data. How important should partnership with banks be part of fintech’s strategic roadmap? ADEBOLA: Banks have a wealth of experience, reputation and can afford to invest in long-term strategic product development. In contrast, non-bank operators pay more attention to the technology and how it produces better customer outcomes. Banks also understand the regulatory environment including KYC and KYB requirements. In a partnership arrangement, Banks and non-banks will be able to develop innovative products. OLAOKE: Overall, the fintechs somehow need the services of the banks and often depend, in a lot of scenarios, on established banking services (card payments, bank transfers, withdrawals to banking accounts etc.). It is therefore imperative that there is some kind of relationship not necessarily partnerships between fintechs and banks. This can also be provided by the switches. However, from a strategic roadmap point of view, there are pros and cons. For example, the customer base and reach of the commercial banks might be something the fintechs might covet but may not be able to acquire by themselves in good time if they were to go-it-alone. On the other hand, the in-flexibility of the banks either due to regulation or limited appetite for risk might slow

them down. overall each party must know why they want a partnership and should carefully and effectively evaluate the pros and cons. NWOJO: I think it is very important and should form an integral part of any fintechs’ strategic roadmap. Collaboration is always a win-win for every stakeholder and I believe there are potential opportunities for Fintechs as well as the banks. EZE: For a long time to come, partnership with banks would remain a part of the strategic roadmap of fintech because both players would continue to need each other to thrive. Banks no longer perceive fintechs as threat but as collaborators in the quest to attain a mutually beneficial objective, which is to constantly delight customers that access financial services and solutions. However, with advances in technology, combined with customers’ desire for more convenience and efficiency, fintechs and banks need to rise up to customer expectations. Real progress can only be possible with each player relying on its strengths, and working collaboratively with other parties towards improving customer experience. Most of the financial institutions that wish to leave a remarkable footprint in Nigeria’s digital space and continue to be relevant in the near future are those that have recognised this shift and are significantly investing in it as an institution while also exploring collaborative possibilities with fintechs and other players within the ecosystem. How do you think bank-fintech collaboration is changing in Nigeria? OLAOKE: I think that there is some awareness by the banks that the fintechs are rolling out innovative products that are capturing the attention of the customers. To this effect, the banks seem more open to collaboration with the fintechs compared to some years back where the banks basically locked them out for the fear of exposure to all kinds of risks. EZE: Fintech-bank collaboration is changing in Nigeria, especially with the increasing embrace of fintech innovations by banks. More and more banks are ceasing to see fintechs as competitors but as collaborators. Although banks and fintechs are players in the same industry, they have different areas of strength – finance and technology, respectively. So far, successful partnerships between banks and fintechs have resulted in various benefits, such as: reduced costs of operation, enhanced customer experience, growth of customer-base, boost in profit margins, amongst others. Generally, with banks’ harnessing their strengths of impressive customer-base, data, market knowledge and regulatory

BOB NWOJO Head of Acceptance Business in FirstBank with over 15 years’ experience in cards and digital payments. He was in the team that performed the first interbank transaction in Nigeria between UBA and FirstBank. A certified Cisco network administrator, Bob holds a Masters in information technology.

OLABODE OLAOKE Senior Manager, Digital Risk,Cyber Security, Privacy and Resilience at PwC.

47 /E-PAYMENT REVIEW/ DECEMBER 2018

2018 YEAR-END EDITION ROUNDTABLE

environment and fintechs utilising their usually innovative outlook to problem-solving, both parties can forge mutually beneficial relationships. NWOJO: There have been a few bank-fintech collaborations in Nigeria that have given birth to highly innovative solutions with huge social impact. I believe there will be a lot more of these collaborations in this market, where banks would leverage on the expertise of the fintechs in an effort to digitize and streamline their operational capabilities and move towards digital delivery. ADEBOLA: We are witnessing the introduction of innovative financial services by financial services firms. This is bound to increase with the CBN licensing additional service providers and the creation of different tiers within which operators can operate. We are also seeing banks making greater use of data referencing service providers to promote their short-term loan service. This is increasing collaboration between banks and fintechs. It is important to balance non-banking operators access to financial services with a need to ensure operators offer safe services and that consumers are protected. Collaboration between a heavily regulated bank and a less regulated fintech throws up a number of risks that need to be managed to ensure that banks and non-banks benefit from such collaboration. How can banks use fintech partnerships to enhance what they currently have in place? EZE: With regards to financial services, the approach to be adopted should be geared towards the use of technology for delivering personalised and simplified user-experience. Automation and Artificial Intelligence will help improve effective and more personalised financial management. Financial services and solutions should be woven into customersâ&#x20AC;&#x2122; everyday and social life such that banking becomes more ubiquitous. The need to physically visit a bank branch will reduce significantly over time as bank-fintech partnership further deepens, and leads to the rolling out of more services to the benefit of their customers. ADEBOLA: Most financial solutions developed by fintechs could be classed as agile. They are quick at adapting their solutions to fit consumer preferences. This flexibility in solution development is quite difficult for large banks that may need to go through numerous levels of testing and approvals. Banks can learn from non-banks by focusing on developing solutions that meets consumer needs and promote better consumer outcomes. NWOJO: Banks can leverage on the

ADEBOLA ADEYEMI, PhD Partner at PAC Solicitors, Lagos and scholar practitioner, providing legal structuring, regulatory and investment compliance services to clients. Bola is a dual qualified legal practitioner. With specialisation in IT law, compliance advisory, and sustainable project finance.

agility and innovative capability of a fintech to enhance what they currently have in place. The potential opportunity could span from solution design and development by the fintech. OLAOKE: They simply need to rethink their business models and leverage the skills, capability and appeal of the fintechs in re-imagining the possible and then provide services that people long for. I give you an example: one of the partnerships has resulted in a bank in Nigeria being able to issue out dollar debit cards with BIN and address in the USA, this is certainly one of the services many Nigerians crave for. It is similar to the model used by the likes of Skype where you can buy a Skype number from many of the western countries and use same globally. There are several use-cases out there that they can consider and use the appropriate partnerships with fintechs to serve their customers better. What should banks look for and what are the dynamics needed for successful partnerships with fintech to occur? ADEBOLA: The most important thing is for banks to think of technology solutions that are cheap, fast and promote easy access to financial services. Partnerships can be formed based on similarity in values, culture, business processes, re-

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gulation and interoperability of existing IT infrastructure. Notwithstanding the advantages, the parties will need to deal with certain challenges that will result from a convergence of their values, culture and business processes. The extent to which any partnership will succeed will depend on these factors. NWOJO: For a successful partnership with fintechs, banks need to identify and critically assess their fintech engagement strategies. The four models of engagement with fintech are Investment (banks invest their own money in fintech startup), collaboration (banks enter into various types of arrangement with fintechs), in-house development of products (in-house techs accelerating development of fintech products) and M&A (acquiring a fintech company). OLAOKE: I believe that the key requirements that the banks should look for are as follows: Creativity, capability and capacity to deliver, and sustainability - you don't want to partner with a business that will some months down the line and most especially, the profile/quality of the leader of the fintech organisation. The dynamics are likely to play out uniquely per scenario, however, it should be clear upfront to all parties what the objectives and deliverables are; is it a project/product based partnership or a long term collaborative partnership? Are expectations clear to all parties? Is there exclusivity for products and services? Are things formalized or loosely arranged? All these are some of the dynamics that are likely to spell out how the partnership plays out in the long run. EZE: I would think it starts with an acknowledgment of the importance of partnerships, as well as recognising the significant place each player occupies. Globally, fintechs are at the forefront of cutting-edge innovations in the financial sector, but they have not eroded the place of banks. It is important to perceive fintechs as partners in progress in the journey toward keeping customers satisfied. According to a recent Accenture study, a total of $5.4 billion was invested in fintech companies globally in the Q1 2016 alone. In 2015, investment in fintech globally stood at $22.3 billion. This clearly shows that a lot is happening in that space, and it is important that all stakeholders must be alert and take active steps to win together. Banks should focus on identifying fintechs with demonstrable ability to continually innovate and whose strategic direction align with theirs. Successful partnerships should not only ensure a faster turn around time for the use of technology in improving and automating the delivery and use of financial services; but should also be a win-win situation for the parties involved.

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NIBSS FRAUD REPORT Industry Fraud Report, Third Quarter 2018 DMBs Q3 2018 Fraud at a Glance

FRAUD VOLUME Fraud Volume

Q3 2018 vs Q2 2018

9,811

Q3 2018 vs Q3 2017

67.7%

Increase

Q3 2018 | ACCOUNT TYPES | DMBS Individual Accounts

Corporate Accounts

7,900

9,811

A total of 9,811 fraud cases were reported in third quarter 2018. This resulted in an increase of 6% and 67.6% when compared with Q2 2018 and Q3 2017 respectively.

ATTEMPTED FRAUD VALUE Attempted Fraud Value

N1.03B

Q3 2018 vs Q2 2018

Q3 2018 vs Q3 2017

Decrease

Increase

55.2%

10%

ACTUAL LOSS VALUE Actual Loss Value

N347 Million

Q3 2018 vs Q2 2018

Q3 2018 vs Q3 2017

Decrease

29.1%

10%

Despite the increase in the volume of fraud reported, there was a decrease of 55.2% and 29.1% in attempted fraud value and actual loss value respectively when compared to Q22018. On the other hand, the industry was able to save two-thirds of fraud attempts within the quarter. Institutions are encouraged to intensify collaborative efforts in recovering funds while upholding formidable controls to ensure effective fraud mitigation.

The industry salvaged 66.3% of attempted fraud value.

60+40+A 66%

FRAUD BY CHANNEL

ATM -- Volume - 2,173 Value - N77 million

Although, the ATM has the third highest reported fraud in volume and attempted fraud amount for the quarter, ATM fraud recorded a decrease of 9.6% and 15.3% in both volume and actual loss value in comparison to Q2 2018. ATM channel represents 22% of the actual losses.

Mobile -- Volume - 2, 595 Value - N167 million

AlthoughMobile channel recorded the highest reported fraud in volume, attempted fraud and actual loss values. When compared to Q2

2018, there was a marginal decrease of 17.6% and 34.6% in volume and actual loss value. Notwithstanding, the industry was able to salvage about 51% of the N340M attempted mobile fraud value in this quarter. There was an increase of 118% and 57.5% in reported volume and actual loss when compared to Q2 2018. Institutions are encouraged to build resilient controls around their mobile platforms in order to mitigate the successive increase in mobile frauds observed in Q2 2018 and Q3 2018 respectively.

PoS -- Volume - 414 Value - N8 million

Being an active channel used by fraudsters for dissipating fraudulent proceeds, POS channel fraud witnessed an increase of 30% and 9% respectively in both volume and attempted fraud value, when compared to Q2 2018. However, there was a decrease of 50% in actual fraud losses this quarter when compared to Q2 2018.

Internet Banking -- Volume - 841 Value - N15 million

When compared to Q2 2018, internet banking fraud decreased by 37.5% in its actual loss value during this quarter. In addition, there was a decrease in attempted fraud value by 46% when compared to Q2 2018. However, the fraud volume witnessed a minor increase of 5% this quarter. It is worthy to note that 78% of its N68M attempted fraud value were salvaged. Institutions are encouraged to maintain measures that led to the commendable decrease in actual loss values on this channel.

Across the Counter -- Volume - 38 Value - N16 million

There was a significant decrease in attempted fraud value and actual loss value by 83% and 84% respectively when compared to Q2 2018. Across the counter channel accounted for 0.4% of the entire fraud volume in this quarter. In addition, fraud volume for Q3 2018 decreased by 48% and 40% when compared to Q2 2018 and Q3 2017 respectively.

Web -- Volume - 3, 125 Value - N42 million

Web channel recorded the second highest attempted fraud value with a total value of N293M. The attempted value increased by 114% when compared with Q2 2018 attempted fraud value. Also, the web channel has the highest fraud volume of 3,125 representing 32% of the total fraud volume this quarter.

Cheque -- Volume - 8 Value - N19 million

Cheque fraud has consistently been on the decline. Last quarter, there was no reported case of cheque fraud, however, the channel recorded eight fraud cases in Q3 2018. When compared to Q2 2017, there was an increase of 300% and 413% in fraud volume and actual loss values respectively.

Ecommerce -- Volume - 478 Value - N3 million

eCommerce recorded the least actual loss value of N2.9M despite recording the fourth position in reported volume. When compared to Q2 2018, there was a marginal increase of 1% and 5% in its fraud volume and attempted fraud value respectively. However, the channel actual loss value increase by 247% when compared with Q2 2018. S/N Channels

Fraud Volume

1. 2. 3. 4. 5. 6. 7. 8. 9.

38 43,544,161.05 2,173 196,572,382.47 8 20,202,600.00 478 22,923,471.35 841 68,494,900.15 2,595 340,179,015.11 139 18,985,265.00 414 35,677,464.89 3,125 293,390,240.41 9,811 1,039,969,500.43

Across the Counter ATM Cheques eCommerce Internet Banking Mobile Others POS Web Total

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Attempted Fraud Value

Actual Loss Value 16,387,050.33 77,013,577.52 18,841,600.00 2,915,139.00 14,881,572.00 167,448,577.50 0.00 8,420,089.91 41,890,480.51 347,798,086.77

FRAUD BY DAY

ATTEMPTED FRAUD VALUE Attempted Fraud Value

Fraud Volume Comparison by Day Q2 2018 vs Q3 2018

N105

Q3 2018 vs Q2 2018

Q3 2018 vs Q3 2017

907%

2,183%

Increase

Million

Increase

ACTUAL LOSS VALUE Actual Loss Value

N88

Million

Q3 2018 vs Q2 2018

Q3 2018 vs Q3 2017

763%

1,813%

Increase

The increase witnessed in volume, attempted fraud value and actual loss value on OFIs were significant. When compared with Q2 2018 and Q3 2017, actual loss value increased by 763% and 1,813% respectively. The OFIs must ensure that robust controls are implemented within their platforms to prevent such monumental increase in the future. It is also important to note that fraudsters made away with 84% of attempted fraud value, while only 16% were salvaged.

Actual Loss Value Comparison by Day Q2 2018 vs Q3 2018 (in Millions)

The industry salvaged 16% of attempted fraud value.

16+84+A 16%

FRAUD BY CHANNEL The highest fraud volume by day recorded in Q3 2018 was Tuesday followed by Wednesday. In Q2 2018, Monday recorded the highest volume of fraud followed by Wednesday. Although Saturday and Sunday unexpectedly recorded the least cases of fraud, it is important to note that fraud can occur at any time, irrespective of days, hence the need to preempt its occurrence at any given time. Friday and Monday recorded the highest actual loss amount in Q3 2018 and Q2 2018 respectively. In Q3 2018, the second highest actual loss was recorded on Thursday.

PoS -- Volume - 7 Value - N1.4 million

FRAUD VOLUME

336

Q3 2018 vs Q2 2018

Q3 2018 vs Q3 2017

Increase

354%

600%

334

Having moved from a fraud count of eight (8) in Q2 2018 to seven (7) this quarter, POS fraud volume accounted for only 2% of the entire fraud volume. When compared with Q2 2018, a decrease of 33% and 50% were recorded across its attempted fraud value and actual loss value respectively. Being a channel of choice used by fraudsters for funds dissipation, this decrease should be sustained by OFIs.

Internet Banking -- Volume - 11 Value - N22 million

Q3 2018 | ACCOUNT TYPES | OFIS Individual Accounts

Mobile -- Volume - 211 Value - N31 million

Being the highest fraud volume, the channel accounted for 62% of the entire fraud cases in this quarter. Mobile channel also recorded the highest actual loss value at 33.7M. When compared with Q2 2018, there was a remarkable increase of 1407% in volume and 1272% in actual loss. Only 6% of the attempted fraud value was salvaged. Mobile channel represents 36% of the entire actual loss value within the OFI space.

OFIs Q2 2018 Fraud at a Glance

Fraud Volume

ATM -- Volume - 37 Value - N5.8 million

Fraud reported for the ATM channel increased by 106% and 93% in volume and actual loss value in comparison with Q2 2018. Consequently, in contrast with Q3 2017, an increase of 825% and 1195% were recorded for fraud volume and actual loss. The fraud volume recorded on ATM represented 12% of the entire volume for the quarter.

Corporate Accounts

In Q3 2018, the OFIs recorded a total fraud volume of 336. This represents an increase of 354% and 600% when compared with Q2 2018 and Q3 2017 respectively.

Notably, internet banking emerged as the second highest for both actual loss value and attempted fraud value for this quarter. It also accounted for about 3% of the entire volume of fraud reported. There was an increase of 450% and 1000% in fraud volume when compared with Q2 2018 and Q3 2017 respectively.

Web -- Volume - 27 Value - N4.8 million

The web channel recorded 8% of the entire fraud volume in this quarter, showing a 15% decrease in fraud volume in comparison to Q2 2017. In addition, there was an increase of 85% when compared to Q2 2018. The channel also represents 5.4% of the total loss value within the OFI.

51 /E-PAYMENT REVIEW/ DECEMBER 2018

2018 YEAR-END EDITION NIBSS FRAUD REPORT

S/N Channels

Fraud Volume

1. 2. 3. 4. 5. 6. 7.

37 5,844,035.50 41 20,804,694.85 2 16,113,610.80 11 22,323,400.00 211 33,741,748.36 7 1,423,249.96 27 4,870,098.46 336 105,120,837.93

ATM Across the Counter eCommerce Internet Banking Mobile POS Web Total

Attempted Fraud Value

Actual Loss Value

Distribution according to state of residence

5, 844, 035.50 9, 132, 194.85 13,287,010.19 22,033,400.00 31,092,158.36 1,422,849.96 4,860,460.74 87,672,109.60

FRAUD BY DAY Fraud Volume Comparison by Day Q2 2018 vs Q3 2018 Above 20% Between 6% & 10% Between 1% and 5% Below 1%

Defrauded Customers by Gender

In Q3 2018 Actual Loss Value Comparison by Day Q2 2018 vs Q3 2018 (in Millions)

4226

Unique customers who were defrauded

7.92% People defrauded who live in Imo State.

Monday and Friday recorded the highest fraud volume by day in Q3 2018, while Q2 2018 reported Monday and Saturday as the highest reported volume by day. Thursday accounted for the highest actual loss value for this quarter. Friday and Wednesday occupied the second and third position respectively.

Male (61%)

The above analysis is based on BVNs linked to customers defrauded in Q3 2018. A total volume of 4,226 unique BVNs which belonging to these victim customers were reported by Financial Institutions. Referring to the above statistics, more male customers were defrauded in this quarter than female customers.

ANALYSIS ON UNIQUE CUSTOMERS DEFRAUDED CUSTOMERS Defrauded Customers by Age

Fraudulent Customers

197

Unique customers who received fraudulent proceeds

7.92% Fraudsters who reside in Lagos Male (69%) Below 20 years (2.69%) Between 20 and 30 years (28.80%)

Between 30 and 40 years (31.30%) Above 40 Years (37.21%)

Female (39%)

Female (31%)

52 52/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

Defrauded Customers by Age

FRAUD INTEREST INDEX F raud Interest Index (FII) is a mathematical fraud model that shows the channels with the best return on interest (ROI) for fraudsters. The greater the ROI, the higher the certainty of fraudsters attempting to exploit and circumvent controls around such channels. Mobile channel recorded the highest on FII this quarter, displacing ATM which took the for Q2 2018. Mobile channel has become one of the most rewarding channels used by fraudsters due to easy and convenient with funds transfer. The second channel with the highest FII this quarter was ATM channel.

Below 20 years (3.66%) Between 20 and 30 years (53.93%)

Between 30 and 40 years (29.84%) Above 40 Years (12.57%)

Watchlisted Customers In Q3 2018

222

were watchlisted

By Category

78% Category - 1

22% Category - 99

Male (76%)

Female (24%)

Both Categories are as speciﬁed on the Industry BVN Watchlist Report.

A total number of 222 unique customers BVNs involved in various fraudrelated cases were reported for watchlisting this quarter. We encourage institutions to ensure that customers who benefitted from fraudulent proceeds are placed on the watchlist.

CHANNEL ACROSS COUNTER ATM CHEQUES eCOMMERCE INTERNET BANKING MOBILE POS WEB OTHERS TOTAL

FRAUD INTEREST INDEX (FII) 4.77% 24.94% 13.02% 0.06% 0.06% 54.58% 1.40% 1.18% 0.00% 100.00%

FRAUD INTEREST INDEX The Financial Industry witnessed several unauthorized transactions as a result of virtual accounts operated by fraudulent customers within the quarter. Most of these fraudsters opened the virtual accounts within some DMBs. Seeing that minimal KYC is required during account opening and that customers do not require BVNs to operate such accounts has also given fraudsters advantage. The fraudsters utilized this opportunity to exploit the system and defraud customers. Limitations on daily transactions as well as on cumulative balance on such accounts have not deterred these fraudsters who easily make away with their gains that can barely be recovered. Fraud desks are also unable to properly investigate or aid in apprehending these fraudsters who cannot be traced with any BVN or placed on the watchlist. Financial Institutions are encouraged to implement controls that would aid the validation of personal data provided by the customers requesting to be profiled for such account. Also, according to the CBN Draft 2018 Half Year Economic Report, it was stated that N12.06Bn was lost to fraud and forgeries in the H1 2018. Fraud events from this report include armed robbery attacks, draft defalcation, pilfering of cash, stealing, suppression, and conversion of customer’s deposits. This underscores the need for the industry to improve on the existing physical security measures in order to avert such colossal loss in the future. Courtesy of Nigeria Inter-Bank Settlement System Plc (NIBSS).

FRAUD NEWS

CBN could trigger sanctions on banks failing to report fraud incidents THE CENTRAL BANK OF NIGERIA (CBN) HAS SAID it will sanction banks that do not report fraud-related incidents or failed to maintain adequate reporting mechanisms on fraudulent and criminal activities in their business. Sam Okojere, recently appointed Director of CBN's Payment System Management Department and Chairman of the Nigerian Electronic Fraud Forum (NeFF), disclosed this at the group's annual dinner in Lagos. “A system where participants fail to report fraud as captured by the relevant CBN directive will no longer be condoned," said Okojere in quotes by ThisDay. “We must also pay attention to risk mana-

gement and embark on aggressive fraud awareness campaigns in the days ahead in order to boost customers’ confidence.” He said banks must generate fraud data and handle it in such a way that the information will help in understanding and addressing customer needs. "As a nation, we are under siege from cybercriminals who are leveraging the power of the internet to commit fraud and crime on an unprecedented scale, costing our economy millions if not billions each year. It has thus become necessary to review and strengthen the existing rules, and enact new regulations to stem these problems," he said. Incidents of fraud are on the rise in Nigeria, with 53 /E-PAYMENT REVIEW/ DECEMBER 2018

statistics by the CBN indicating that Nigerian banks recorded 20,768 cases with a loss N19.77 billion in the first 6 months of 2018, an increase from 16,762 in the corresponding period of 2017. Actual loss by banks to fraud was to N12.06 billion, compared with the N0.78 billion and $0.03 million in the first half of 2017. The CBN said the reported fraud cases involved both bank staff and non-bank culprits. "Taming fraud will continue to be a focus for the forum, as we know the impact fraud has in diminishing trust which is an essential ingredient in building an internationally recognised and nationally utilised payments system," Okojere said.

ITEX Integrated Services is a leading Fintech solution provider Our wide range of innovative products and services are tailored to meet unique transactional needs

POS Terminals

Payment Gateway 54 54/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

Bill Payment

TMS

TRENDS & TACTICS

Coinmine One.

The Plug & Play Home Crypto Miner Now you can mine cryptocurrency at home. Coinmine One is plug-in crypto machine and mobile app, powered by a proprietary operating system. All you need to do is power up the device, connect it to WIFI, and tap your phone to choose the coin you want to mine. It allows users to mine altcoin – but not yet Bitcoin.The device is aimed at overcoming one of the main challenges in crypto mining –the high barriers for ordinary people to enter, said Farbood Nivi, cofounder and CEO of Coinmine. BY THE NUMBERS

2.6 BILLION PEOPLE WHO WILL BE USING BIOMETRICS TO SECURE PAYMENTS BY 2023, GOODE INTELLIGENCE PREDICTS. THEY WILL BE DRIVEN BY A DESIRE FOR FRICTIONLESS AUTHENTICATION, FRAUD PROTECTION, REGULATION AND TECHNOLOGY STANDARDISATION.

COINMINE / THYNGS

579 MILLION ESTIMATED BIOMETRIC PAYMENT CARDS THAT WILL BE IN USE AROUND THE WORLD IN FIVE YEARS’ TIME, ACCORDING TO GOODE INTELLIGENCE.

PLAY TO PAY ENGAGEMENT To mark the 100 years since the end of World War I, the Royal British Legion is distributing these Pub Quiz contactless cards that are equipped with NFC and QR code technology to let participants donate money by simply tapping or scanning it with their smartphone. The cards and underlying platform are supplied by mobile engagement startup Thyngs. 55 /E-PAYMENT REVIEW/ DECEMBER 2018

BLOCKCHAIN EXPERIMENT

Smart money that knows what it can be spent on

USTRALIA’S COMMONWEALTH BANK is piloting a new type of ‘smart money’ that can be pre-programmed with a set of conditions that define what it can be spent on, who it can be spent by and when it can be spent. The bank teamed up with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) to develop a mobile application, called “Making Money Smart,” for using distributed ledger technology in the payment system of the Australian National Disability Insurance Scheme (NDIS). The project will enable authorities to control and analyze how NDIS uses state funding for delivering services to people with special needs. “Smart Money is enabled by a blockchain token solution that could integrate with Australia’s New Payments Platform, and is accessed through a user-friendly app,” CSIRO explained. NDIS was selected for the proof of concept, as it involves highly personalised payment conditions. Its participants have individualised plans that can contain multiple budget categories — each with different spending rules. The prototype app lets participants to manage their plan by enabling them to find, book and pay for services from NDIS service providers without the need for paperwork or receipts.The app will allow the government to see who spends the money, when, and for what.

2018 YEAR-END EDITION TRENDS & TACTICS

DIGITAL RECEIPTS

Store lets shoppers selfcheckout on their phones MEDIAMARKTSATURN, EUROPE’S LARgest consumer electronics retailer, is piloting a mobile self-checkout service that lets customers add products to their shopping basket by tapping the NFC tag included in the digital price tags of more than 100,000 products on sale at its store. “Scanning and paying for products with Saturn Smartpay is child’s play,” the retailer said. “Customers just open the app, choose and scan the items they want, pay with their smartphone, and have the security tags deactivated at the Smartpay express counter at the store’s exit. Once the shopping cart is full, customers can pay by credit card or PayPal and receive their digital receipt by email.

FACING THE FUTURE The National Australia Bank (NAB) has built and demonstrated a proofof-concept ATM that recognises customers’ faces, removing the need for customers to use a bank card to make a withdrawal. A glance at the machine followed by entry of the customer’s PIN is all that is needed to withdraw money. The cardless cash machine prototype was developed in approximately two months by the bank's in-house innovation team at NAB Labs and uses Microsoft’s cloud-based Azure Cognitive Services to power its face recognition functionality. LESSONS FROM THE FIELD

KFC INTRODUCES NEXT-GEN SELF-ORDERING KIOSKS

NAB LABS / ALTAVIA-GROUP / SQUARE / DYNAMICS

KFC IS NOW INTRODUCING THE FUTURE OF food-ordering digital kiosks. At Alibaba Cloud's 2018 Computing Conference in Hangzhou, China, KFC and Alibaba launched an AI-powered kiosk that gives consumers a new and highly efficient way to navigate and order from KFC's menu. These new kiosks are set to reduce wait times and improve operational efficiency.

POS TERMINAL WITH NFC AND CARD SUPPORT PAYMENTS COMPANY SQUARE HAS LAUNCHED a new point-of-sale device called "Terminal," which combines NFC, credit/debit card swiping, and chip-based payments in one piece of hardware. Like Square's other devices, Terminal supports Apple Pay, Google Pay, and other mobile wallets using near-field communication.

Payment infrastructure renovation key to banks' digital strategy NEARLY TWO-THIRDS OF BANKS BELIEVE their payments infrastructure will need a significant upgrade as payments are now considered a central part of a bank’s digital strategy and a differentiator due to close customer proximity, according to a new survey. The survey by Ovum was part of a report by banking and enterprise software creator Temenos titled ‘Making the business case for payments – lessons from the field.' The report highlighted the issues that banks think will be important moving into the future with technology having the biggest impact. Of 226 banking representatives quizzed in the survey, 65% expect their systems to need significant upgrade work or even replacement within the next three years. Reasons for this include rapidly growing customer expectations, competitive pressures, domestic and regional level regulation, and payment infrastructure changes. The report said that banks must build holistic and flexible investment cases to allow them to pivot to any environmental changes and must build real-time capabilities and adaptability as future innovation becomes important. Respondents highlighted the importance of customer service with almost 90% saying that it is more challenging to win and retain new client business than it was a year ago. Building real-time capabilities and adaptability for future innovation is becoming increasingly important. New architectures need to leverage APIs and micro-services to deliver a foundation for future product and service innovation. 56 56/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

PRESS TO PAY

Bank builds card with buttons that lets customers select payment options AN INDIAN BANK HAS CREATED A CARD that features three built-in buttons so user can choose between charging a purchase to their credit card account, taking out a loan or paying for the items with their reward points. Mumbai-based IndusInd Bank launched the interactive credit card called Nexxt so customers can switch between payment options by simply pressing the relevant button on their card, the bank said. They can also use the buttons to choose the length of any equated monthly installment loan they wish to take out. Their chosen payment method is then displayed on the card using LED lights associated with each of the three options. The card has two EMV chips and two magnetic stripes, one on each side. The bank says the card uses the anagram technique to enhance and highlight the singularity of the duo card. The card was created in partnership with Dynamics, the US-based company that worked with SoftBank to launch the Wallet Card, a battery-powered, connected card in January.

SVERIGES RIKSBANK

Sweden preps digital currency for future

SWEDEN'S CENTRAL BANK, THE RIKSBANK, IS PUSHING ahead with plans of designing a digital state-issued cryptocurrency to satisfy the needs of those that still rely on cash to make their day to day spendings. With cash usage on the decline in Sweden, the central bank says an electronic currency could ensure that the general public will still have access to a stateguaranteed means of payment. The bank has ordered the design and the testing of a new digital centralized official means of payment for the country to adopt in the future. This due to the growing tendency of the Sweden society of going cashless in the near future. According to a report from Fortune, some banks have abandoned the use of cash already, and some stores are not accepting cash. This constitutes a great danger for the society, that needs an officially issued crypto asset to have a sovereign monetary policy. the people from the Riksbank commissioned these tests to avoid a possible future when credit card and private providers manage the whole pool of money in the country. "A preliminary technical solution for the e-krona should focus on a value-based e-krona without interest and with traceable transactions. The Riksbank should also continue investigating an account-based e-krona which would require coordination with other authorities," the bank said

DATA

85% Transactions around the world carried out via cash, according to the Global Cash Handling Market Industry Analysis and Outlook (20182022).

10.06% CAGR growth rate of global cash logistics market during the period 2018-2022, forecast by Cash Logistics Market.

CONSUMER ENGAGEMENT

Cognac maker to include NFC tags in crystal decanters RÉMY COINTREAU, A FRENCH ALCHOLIC MAKER WILL begin next year to integrate an NFC chip into the cork stopper of all the decanters produced by its Louis XIII luxury cognac brand to make it easy for buyers to register their purchase . It will allow clients to send gifts with customized messages that will appear when recipients scan their decanter. The decanter connects clients to the Louis XIII Society, a private club where members can enjoy exclusive content, unique experiences and personalized services using their smartphones. After breaking the seal, clients tap their NFC-enabled smartphones on the cork stopper to access the Society's landing page. The decanter number is automatically registered. Every decanter will feature this smart solution worldwide.

Lloyds helps customers track spending with Google Maps

Lloyds Banking Group has added Google Maps functionality to its mobile app to help customers pinpoint the exact location and details of debit card transactions with a single tap or click. The integration is part of a suite of new updates to the bank's online and mobile services which now offers smart budgeting tools and card feeezes and nudges to help customers to choose how and where to spend. The Payday insight feature has been added to show customers a timeline of scheduled payments for regular bills, giving users a clear view of how much free float they have left to spend each month. This is combined with regular nudges to help users stay up to date with their account activity. “We’re taking our industryleading apps to the next level to offer customers a fuller view of their finances,” said Stephen Noakes, the bank's retail transformation director. INTEGRATED LIFESTYLE

IN SHORT

REMY-COINTREAU / THE VERGE / WESTPAC

Bank creates stylish wearable tap-and-go payment accessories PLENTY OF WEARABLE PAYMENT INnovations have been introduced recently but when it comes to shopping, the majority of consumers still can't imagine going to the store without cash or a payment card. To change that Australian financial services provider enlisted the design and style expertise of Australian designer Hayden Cox to create a collection of five minimalist wearable accessories that offer hands-free, battery-free and tap-and-go payment anywhere, anytime. Called Centsitive Objects, they include a convertible two-in-one keychain that can be disassembled and worn as a waterproof wristband; Slimline Keeper, a subtle silicone tag that can be added to watch or fitness band; an ultra-minimal Incognito Pin ‘brooch-like’ set that includes four unique toppers; Nostalgia Pin - iconic safety pin design with an attached keeper; and an ‘out of site’ and internal-facing iron/sew-on Centsitive Patch. Each design includes a secure pouch that holds Westpac's PayWear Card linked to the customern account. Each item can be attached to clothing allowing customers to tap-and-pay with their shirt sleeve, hat or even set of keys.

SIGNING OFF With effect from April 2019 card issuers around the globe will no longer need to include a signature panel on the back of Mastercard products, the payments network has announced. “The investments we’ve made in technology like artificial intelligence and biometrics are what’s powering this next step," said Ajay Bhalla, president of Mastercard’s cyber and intelligence solutions division.

Westpac’s brief to Cox was to diversify and expand its PayWear offering and deliver relevant, multipurpose product. In turn, Cox identified everyday objects that could double as payment accessories. 57 /E-PAYMENT REVIEW/ DECEMBER 2018

CARDS RULE While predicting that there could be about 30 billion devices in five years loaded with its customers’ accounts and Knowing it won’t be able to slap its logo on every new device, Visa spent

months developing a two-note chirp and a distinctive vibration, plus a screen animation—all of which may be triggered on various devices when a consumer pays, Bloomberg reported in October. SUSPICION Switzerland’s competition watchdog has raided the offices of financial companies, including Credit Suisse and UBS, to investigate a suspected boycott of mobile payment solutions such as Apple Pay and Samsung Pay… ‘There is the suspicion that the companies agreed not to make their credit cards available for use with Apple Pay and Samsung Pay, in order to favor the Swiss solution Twint,’ competition commission Weko said.

2018 YEAR-END EDITION THE GIMLET EYE

Harnessing collaboration for big leap in financial inclusion BY GOVERNOR CAROLINE ABEL

SINTONIA UNO

N RECENT YEARS, THERE HAS BEEN both national and global efforts to enhance financial inclusion, which is not only about people having access to financial services and products, but also about them having the right knowledge and capabilities, to use these products and services to better their lives. The Global Findex Database, produced by the World Bank, provides an overview of the significant strides, as well as remaining challenges, in ensuring access for all to the basic financial services needed, for people to secure their financial wellbeing and future. According to the 2017 Global Findex Database, 69 percent of the world’s adult population today have an account at a bank or mobile money provider. Nevertheless, 1.7 billion worldwide remain unbanked, in spite of two-thirds of them owning a mobile phone. These figures are important to us as policy makers, as they portray the gaps and opportunities that exist to increase access to financial services and expand financial inclusion. Having said that, it is important to acknowledge that having a bank account and access to financial services alone, will not address the issue of financial inclusion in its entirety. There needs to be more progress when it comes to offering quality and affordable products and services, accessibility, as well as enhanced consumer interaction and education. These are essential to support increased and knowledgeable use of financial services. Effective usage of a bank account and other financial services will only come about if there is sufficient and clear understanding of the services being accessed. This also

needs to be accompanied by a well-formulated consumer protection framework. It is therefore vital that we take time to reflect on our respective situations – where do we stand, how far have we come, what still needs to be done, how do we get it done? These are all questions that we need to ask as we continue operating in today’s volatile financial landscape. As leaders, we need to remain focused on pushing the financial inclusion agenda forward, while remaining abreast of emerging issues. We also need a collaborative approach, as financial inclusion should not only be of concern to the regulators and policy makers, but it should be everybody’s business. Working in partnership to enhance financial inclusion is already off to a good start in Seychelles. A National Financial Education Strategy is currently being implemented to address shortcomings identified through a survey conducted in 2016. The survey clearly established that while 94 percent of the adult population has access to financial services, there is a considerable lack of knowledge and skills required to make informed financial decisions. With the fast evolving financial landscape, where consumers are being exposed to more innovative and complex financial services, it is imperative that consumers are financially literate, to be able to make the right choices. Financial literacy is undeniably a key factor that supports financial inclusion, consumer protection and financial stability. Our objective to promote domestic price stability, our vision to become a model Central Bank and our mission to contribute towards the eco-

BUENOS AIRES DECLARATION G20 members and invited world leaders in a group photo at the 13th G20 Leaders’ Summit in Buenos Aires, Argentina yesterday. Village Urugwiro. The meeting endorsed the G20 Financial Inclusion Policy Guide and the Global Partnership for Financial Inclusion Roadmap. It declared that mobilizing sustainable finance and strengthening financial inclusion are important for global growth. 58 58/E-PAYMENT /E-PAYMENTREVIEW/ REVIEW/SEPTEMBER DECEMBER 2018 2018

nomic growth and development of Seychelles, all remain unchanged. However, we have found it necessary to further enhance our mandate to deliver on financial consumer protection matters, as well as build capacity and devote more resources to promote financial education. I firmly believe that a financially empowered population is imperative, if we want to have a nation that understands and supports the policies that are put in place to safeguard the economy. As we move forward with our financial inclusion efforts, it is equally important that we do not lose sight of one important buzzword in today’s financial sphere – fintech. The new wave of technological innovation is accelerating change in the global financial services sector and it is evident that this cannot be ignored. There is a need to explore how financial technologies can be used to advance financial inclusion and make it more convenient, affordable and fast for consumers to access financial services. We also need to ensure that absolutely no one is left behind, as we strive to address and extend solutions to the challenges and barriers faced by individuals and businesses alike when accessing financial services. We need to start educating our young children from an early age, both at home and in schools. The adults, including the socially and financially vulnerable segments of the population, also need to be educated on how to budget, save and invest. Access to credit for small businesses, and building their capacity to come up with solid business plans is another challenge that needs to be addressed in developing economies. Due to several factors such as the unwillingness of banks to extend credit facilities, lack of collaterals and the absence of credit information, the Micro, Small and Medium Enterprises (MSMEs) are severely constrained when it comes to accessing funds and expanding their businesses. This is a critical issue that needs significant attention, as MSMEs play a key role in the fostering economic development. As we reflect on the way forward, I would also like to highlight our human capital as one of the most valuable assets in ensuring the financial inclusion deliverables are well executed. We need to continue to invest in building the capacity of our human resources, as they are the champions of the financial inclusion initiatives. Our young leaders should be groomed with the necessary skills, to further build on what the current leaders are doing and why not find innovative ways of doing it to achieve better results. While there is no perfect formula for enhancing financial inclusion, having capable, knowledgeable and devoted leaders, committed to doing what it takes to make it happen, will go a long way in taking the agenda to the next level. On a final note, I also firmly believe in collective efforts; if we continue to work together towards a set of shared objectives, we are definitely going to succeed in making affordable, convenient and quality financial services accessible to all and achieve our goal of having a more financially empowered population. Ms. Caroline-Marie Abel is Governor of Central Bank of Seychelles. Courtesy of afi-global.org.

Thank You FOR YOUR VALUABLE PARTNERSHIP IN 2018. WE WISH YOU A PROSPEROUS NEW YEAR

Members

2018 Partners

E-PAYMENT REVIEW

2018 Supporting Organisations ACAEBIN ACCOBIN Alat Digital Bank Access Bank Plc Bics Nig. Ltd BVC Consulting Ltd Central Bank of Nigeria CeBIH Chamswitch CIBN Citiserve Ltd Centre for Management Development Computer Warehouse Group Plc Demadiur Diamond Bank Plc EFCC Federal Ministry of Justice Fintech Association of Nigeria First Bank of Nigeria Plc Financial Inclusion Secretariat,

Fortunes Game Ltd Gboza Gbosa Technology Ltd Global Accelerex Ltd Interswitch Ltd ISSAN ITEX Integrated Systems Ltd Lagos Business School Medallion Communications Ltd NeFF Nextzon NIBSS Nigeria NIPOST Services NIMC NIPOST NowNow Oradian Pagatech Parkway Projects Paystack PLUS Journal Police Special Fraud Unit

PwC Rack Centre Ltd RadioTv Plus Shared Services Department Sterling Bank Plc Tech Economy United Bank of Africa Unified Payment Services Ltd Upperlink Ltd

US Consolate VISA International VoguePay World Bank Nigeria Xpress Payments 3Line Card Management Ltd

-PPAN

E-Payment Providers Association of Nigeria

E-PAYMENT PROVIDERS ASSOCIATION OF NIGERIA 1, Racheal Nwangwu Close, Lekki Phase 1, Lagos. 01-3426493, 08033013614 eppan@e-ppan.org, info@e-ppan.org

w w w. e - p p a n . o r g

59 /E-PAYMENT REVIEW/ DECEMBER 2018

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E-Payment Review Year End Edition

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