Diamond bank MD Dozie speaks on gender imbalance

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The Managing Director/Chief Executive Officer of Diamond Bank Plc, Mr Uzoma Dozie, gives an insight into how the bank has been deepening financial inclusion, especially in the northern part of the country, and bringing in more women in the process. He also explains why the bank pulls out its resources in other countries in the West African sub-region, among other issues.

Managing Director/Chief Executive Officer of Diamond Bank Plc, Mr Uzoma Dozie

 

Diamond Bank has won a couple of awards – Lafferty Global (2016), Businessday (2017) – on its financial inclusion services. What outstanding achievements has the bank done in this area to beat its competitors?

There are many examples that I can give you. One, we are in partnership and collaboration with MTN on our Diamond Yellow, the first of its kind in the industry to provide services to customers in the market place. 

 We developed a solution called Better Product, and also came up with a new breed of agents as bankers. These agents go to the market to displace the ‘ajo’ (‘esusu’) system. We have a convenient way for people to access us through the mobile system. Finally we are working with Nigerian organisations to develop a new banking application, the Cloud. We have, indeed, been using technologies to achieve great feats.

At Diamond Bank, we match customers’ experience with technology. No customer has a cheque book; we don’t issue cheque books anymore. We have to make the mobile app, the internet app work because there are some customers who don’t have the opportunity to go to a branch; there are customers who don’t have the opportunity to have a cheque book. So we must massage the customer’s experience. And that way we are looking at solutions. It is necessity that is the mother of all inventions. You need to be creative, you need to be innovative. Creativity and innovation were what won those prizes for us.

What happens to your customers that aren’t that literate?

That is why we have branches. Those services are still there. We have three platforms to provide services to customers. One is the branch network, which is the oldest. The second one is the mobile app, which is the new generation, and the third is the SMS, which is a platform that recognises that Nigeria has areas where there are infrastructural issues, and areas where there are income issues as well and people can’t afford smart phones. 

There is no data in that area and SMS banking fills that gap. For instance, there is our *426#, the most popular SMS banking solution in Nigeria, and the *710#, which is the MTN Diamond Yellow, which has more people. We have nine million members there.

As you are phasing out the old form of banking, how does that affect your branch network structure?

We are not reducing yet. In fact, we are redefining branch network first of all, so the traditionally-built Diamond Bank branch will never be the same again. Twenty years ago when I started banking, what was a branch? A branch was a processing unit. Once you walked into any bank in Nigeria, whether it was Diamond Bank or First Bank, you saw a row of tellers who were there to process people’s cash. And then we had one small area for business. Most of the surface area was tailored towards processing cash. 

Today, that has changed. Less people are doing cash transactions in branches and so there is more space for businesses and for people to open accounts. We believe the next revolution in branches would not be for processing; branches would be for networking, advisory services and collaborating with different partners because we are in Nigeria and we still have a lot of people that are not banked. 

Physical infrastructure won’t go away today but we are not going to be building branches like we built before. What we will be doing is to collaborate. We can now reach people with the existing infrastructure, and can enable businesses to get complementary income by providing banking services. That is one of the things we are doing with MTN where we have over 40,000 MTN agents who are also providing banking services, cash-in and cash-out services. So, that physical infrastructure platform will be there for people who have not acquired banking accounts. In the next five or six years, we will still have those physical banking services but most people will be mobile, and banking will be digital.

The bank last year obtained a grant of N421.5m to drive its financial inclusion in the North. How far has it been able to achieve that objective?

That sum looked substantial. Every kobo of it was very important, but it wasn’t the monetary aspect that was of more importance to us; rather it was the technical assistance. So that money was the value of bringing an expert into Nigeria to help us deploy solutions to help us in our financial inclusion drive in the North. 

What does that mean? It entailed research to find out what the things were that we needed to encourage people to open bank accounts. How can we make opening of bank accounts very easy for people in the North? Don’t forget we are a very diverse country with different religions, different norms and different cultures. Banking is about integrating those services into people’s lives, understanding their cultures, understanding the local nuances and making sure these do not interfere or create a problem. 

 How does that key into your Women’s World Banking (WWB) partnership targeted at providing digital financial services for low-income women?

It is very key. In fact there are many projects that we are doing in the South. We are also looking at the North as well because the conditions are almost the same. One of our latest board members is not only a woman, she is from the North and runs one of the most successful foundations, the Murtala Muhammed Foundation. So that is how important women are for us. On our board, we are also replicating our strategic intention.

Can you put a figure to the number of women customers you have everywhere?

Women customers constitute about 35 per cent of our customer base, which is under 15 million; that is, financial inclusion and mainstream. But where we have 50 per cent parity is in our youth segment. We were not focusing on women in the past, we were just focusing on customers. Now with our delivery drive on gender equality and financial inclusion, you can see that our youth proposition, which is up to 45-year-olds, has been deliberate on making sure that we also focus on getting men and women to bank.

The numbers are inching up not as fast as we would like. But the most important thing is that we are measuring it and we are being deliberate about it. You have to be deliberate about it because it doesn’t happen by accident.

Were you able to achieve your target last year in new customers attraction?  

We were at six million core customers and worked to add two million more customers, which we achieved. We were about half a million short of that when last year hadn’t ended yet. We would have reduced that deficit before the end of the financial year.

How much have you spent in acquiring technology?

Our technology spending has always been substantial, right from when Diamond Bank started. It’s like asking me how much I have spent on staff. There is capital expenditure and there is recurrent expenditure. Our technology recurrent expenditure is substantial, but the saving that it brings is actually very substantial. We burn less petrol and diesel now. We have less branches now than we need to have, and we have less people going to the branches. Only 20 per cent of our customers go to the branches and the others do their transactions outside the banking hall. 

Imagine if all those nine million Diamond Yellow customers actually walk into a branch to fill the form. Whatever my technology cost is, the saving is four or five times higher. So technology and people are key investments, and they will continue to be key investments in Diamond Bank.

So the 16 per cent increase in your operating cost conveniently offsets…

(Cuts in): If it is 16 per cent, then we are doing very well. Don’t forget the currency was devalued more than 16 per cent, and inflation was at 18 per cent. There was also an increase in minimum deposit rate, as well as in petrol price. There was also the spend on technology. When you calculate all these, it is not a bad day. We actually had a net reduction in our cost profile.

Does selling off your West African operations to Manzi Finances mean you are completely scaling back your offshore operations? Would you say that Diamond Bank’s external operations had not been so rewarding as to keep them?    

It just means that Nigeria is more important than external operations. It means that for me to take my external businesses to the level we have taken Diamond Bank in Nigeria, I would need to use a lot of capital. There are some banks in America that operate only locally but are bigger than some banks that operate internationally. 

What I am telling you is that I can be big in Nigeria without going out of Nigeria. I can be in Nigeria and provide services for Nigerians without stepping outside Nigeria, which we are already doing. We have a lot of customers who go to school in the UK, who do not have a bank account in the UK, and they have their Diamond Bank accounts and do their payment in the UK through their mobile without suffering. We provide services to our customers wherever they are in the world and that is what technology enables us to do.

What is the current state of the bank’s non-performing loans?

I think about nine per cent of our total assets. We expect to see them come down, especially as the economy is improving. Non-performing loan is an indication of economic condition Things are beginning to improve, inflation is going down, liquidity is coming to the market, the naira is stabilizing as well. There is also investors’ confidence in Nigeria, which is very important. 

These are the kinds of things that will help core companies that were in the margin to begin to pick up. If we can see two more quarters of consistent growth, then we should see some pick-up in businesses. The policies that were introduced have been successful. We haven’t seen many policy changes in the last six months, we hope that continues.

Outsourcing seems to be the fashion now in the banking industry. What percentage of your workforce is outsourced?

Diamond Bank is known for its corporate governance, and that is very key to us. Anything that is anti-governance we frown against.

 If you look at members of the Diamond Bank board, we have notable people on it whose credibility is more important than Diamond Bank. We go through a rigorous governance process so that negative issues will never arise. Everything has to be transparent.

We have 15,000 employees working in Diamond Bank; some are outsourced, some are full-time employees. Five thousand are full-time employees, while 10,000 are outsourced. I can tell you that if we did not create Diamond Yellow, if we did not create better propositions, we would only have 7000 employees in Diamond Bank. So we are creating employment where it is needed.  

Employment is not needed in the white collar area, it is needed in the grassroots, the bottom end of the market. If we had limited ourselves to commercial and corporate banking and didn’t deploy technology, we would have less than 6000 people and we would be very happy because we don’t need many more branches. But we believe we can do much more; we believe that we can reach more people, we believe we can help create more jobs, we can create more social impact and contribute to Nigeria’s growth, and that is what we have done. And that is why we are actually pulling our resources and capital from the West African region because in Nigeria, we have not even scratched the surface yet.        

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