We don’t know where the Naira will end in 2017 – Dozie

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By Emeka Anaeto, Babajide Komolafe& Elizabeth Amihor

Nigeria’s banking sector has been in seriously difficulties in the past two years and the challenges are far from being over. In this edition of Executive Platform, Managing Director of Diamond Bank Plc, Uzoma Dozie, spoke to a Financial Vanguard team on the creative navigation of the problems. Excerpt.

Coming from the challenges of 2014 to 2016, what is 2017 going to be for the bank and what are your strategies to navigate the recession in the economy?

I will say that 2015 was the end summer. 2016 was hard winter. 2017 is going to be hard winter as well. But the difference between 2016 and 2017 is that, we have braced ourselves for 2017. No matter what anybody say. And we have to be realistic.

Things are getting better but they are getting better slowly. I think, for any turn around, there must be disruption, there must be disruption in anything in life before there can be progress. I think that there are many unknowns and many knowns and I think it is the knowns we focus on.

So we don’t know where the Naira is going    to end up .We don’t know much to a great extent    the oil price, the way the oil price is going to be or whether production is going to be on a particular level. But what we do know is that the low oil price means we need to look for other means to get foreign exchange.

•Uzoma Dozie

Focusing on agriculture

The high cost of dollar means we now need to look at what we are importing and what we can do in Nigeria. And if you look at Nigeria in the 70’s we are doing a lot more exporting than importing.    Twenty years later the reverse is the case. We are buying everything and we are importing everything. And so what we have seen is that, one: the budget tells us where the government is focusing on.

Government is focusing on education, it is focussing health, it is focusing on agriculture. And the opportunity there is huge and for us at Diamond Bank. And so what we are seeing is that people are beginning to rethink their expenditure and so for banks it means that just as Nigeria is beginning to look at its revenue streams and they have started to diversify, banks have started doing that.

But fortunately for us, that is something we have started doing about three years ago when we started saying that this corporate, public sector is not sustainable. We have to play in retail.So for us, in that bottom of the pyramid, that retail space, where nobody wants to go to, you cannot apply the same rules to them or else you would go broke. So you have to find a way for people to do their banking without coming to the bank.

Because nobody has time, they don’t have time to be going to the banking hall. We must take banking to them. We must find a way of taking it to them. And it must be very simple and it must be convenient for their current traditional transaction line, which is what we have done.

And so for Diamond Bank the crisis is an opportunity because first of all, what government is trying to do is in line with our philosophy. To give an example, in 2016 our deposit grew, our number of customers grew. And it grew not because we were looking for existing customers; we were looking for new customers.

And we are providing solutions to do that, and that is why our customer base grew. You know we have about 12 million customers. The first six million took us 23 years and 300 branches. The last six million took us two years and no new branches, no paper, no account opening forms. It was all mobile. So we are taking advantage of the millions of mobile phones people are actively using in Nigeria to now use that as a platform to deliver banking and beyond banking services.

Why the uncertainty about the Naira exchange rate given the assurances of the CBN in that regard?

Yes they are maintaining stability of rates. But we cannot tell. Anything can happen. Don’t forget we are now part of the global economy and so you can only control it to the best of your ability. Decisions are made based on information.

I do not have as much information as the Governor of central bank has. I take decisions based on the information I have. Even if rates are maintained at that level, it is still quite high. It still requires a lot of adjustment by people.    So we have inflation at 18 per cent. We have exchange of goods at that particular price. We have interest rates high because of inflation.

But given the increase in foreign reserves, there seems to be light at the end of the tunnel for the Naira.

Yes they will definitely going to be. First of all what has happened? People have curtailed their demands. If we were travelling four times a year it is now twice a year for example. People are now looking at all those excesses, all those luxury goods and items, everyone curtails. If I am using my car for four years I now use it for 8 years.      All those things are actually good. People are now beginning to look at Nigerian goods.

What are the specifics about your decision to adopt a digital strategy to banking?    Is it about Diamond Bank or the banking industry?

It is about the banking industry. It is a global thing and I think that, first of all, it is being driven by what customers want and how customers’ lifestyles are changing. What does going digital means? It means you reduce your cost, speed to market, agility, mobility, security as well. You know cash and paper increase operation risk in every environment.

I can give you a typical example; in Diamond Bank we don’t use paper.  What have we done? We told our board, since we are going digital then it should start at the top. So we came up with a solution, an app, which has our board papers. All my board papers are in an app. So when I travel, they are either in my phone or Ipad, and this gives me that agility and mobility to read it anytime even if I have a ten minutes break.

In terms of communication, to what extent do you carry your customers along in this digital or paperless transaction drive?

There is something about going digital and then digital adoption. Whether it is a business, whether is the economy? Adoption is based on understanding simplicity and communication. We are constantly trying to find ways to communicate effectively to our customers.

Unfortunately what customers are being bombarded with today is information from junk mail. So, separating the real mail from others, that is the challenge.    If it is something important how does the customer get it and understands that? Because sometimes if the message is not consumed in less than one minute just like an advert, the customer just dumps it. And so you have to find a way of communicating what you have, which is what we are trying to do.

I am happy you asked that question. In Nigeria, in fact not Nigerians, nobody likes to read stuffs. People like to see movies, animations and whatever. In most of our communications now we are going to animated stuff. Even if it is 30 seconds because it is more powerful in sending a message as well because you    can also send    that benefit. You can send it saying this is what we are doing, this is the benefits, and this is how it impacts you. You can send 30 seconds video or sound than somebody reading that. Here on our Diamond mobile we communicate with our customers cost effectively.

The more people become digitally enabled the easier it is to give them information, or information on a benefit. That is also a way to help our customers. So why do you bank with Diamond Bank? It is not because of banking. It is because of solutions to many other challenges. Which is why when customers ask me what is it you can do for me?

I don’t talk about banking. Everybody can do banking. It is how I help you achieve your objectives as an organization. So it must concern your organization and you must bring your own platform into helping them. We have a      new philosophy here. We have the non-banking philosophy.    Meaning that it’s not just banking, we have to do much more. So in every segment that we operate, it is what we can do for them beyond banking.

That is also tied into the shares of life. It is not about the share of money. Share of money is transactional. How much money can I make from you? Share of life is, we are in this journey together, which ties into our beyond banking philosophy. That is when it becomes much more exciting and that means that for me to be interested in the share of life, it means that who else can I take into the party? So like Diamond Bank is an eco-system of customers, like 12 million customers which want to grow to about 20 million by end of next year.

It is about all the small businesses and how can we actually provide them with access to markets using our existing platform and also how can we help them ensure their sustainability, by providing advisory services, so it is not just about banking, it could be about HR. It could be about marketing. It could be about branding. It is about also using the new digital tools that are available, cost effective.

Excess liquidity

For me, it is also about how do you use new apps? You know in Diamond Bank, before, if I am travelling for three days, I will ask somebody to stand-in for me. No one does that any more. We are present. We are always on with our mobile. So all the things that we have learnt we want to share with our customers. Because for us if our customers are agile and mobile, it means that they would be more profitable and Diamond Bank profitability is based on customers.

We are not in the belief that if we have this excess liquidity, let us put it in the Treasury bill. Then we don’t need this entire people. We just need one office. And then we just invest in treasury bills. But no. it’s about how do we contribute to the economy as well because if I am making all this money and we are not giving back, believe me, it will come back and hunt us in the future. 

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