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As Bureau De Change Operators Embrace Automation

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The operators of bureau de change in Nigeria last week kicked-off their automation portal which is backed by the Central Bank of Nigeria (CBN). Experts described the move as a boost for the nation’s financial system and the economy. BUKOLA IDOWU, writes.

For decades, Bureau De Change (BDC) operators were filling their weekly regulatory reports manually to the Central Bank of Nigeria (CBN) and Nigerian Financial Intelligence Unit (NFIU). But all that has changed.

The BDCs last week unveiled the digitisation of their operations in Nigeria as the Association of Bureaux De Change Operators of Nigeria launched the  ABCON Live Run Automation Portal in Lagos. The project, which has the backing of the Central Bank of Nigeria (CBN) ended decades of manual filling of regulatory reports by BDCs, enhances global competitiveness of operators and raises hope of higher transaction margin. ABCON insists that the full digitization of BDCs operations is a boost for financial system and the economy ahead of the Financial Action Task Force (FATF) assessment for Nigeria this year.

The operators also lacked the technology to test the genuineness of documents presented to them by foreign exchange end-users and this had severally led to sanction, loss of revenues and damaged the reputation of Nigerian BDCs in the eyes of international community. According  to ABCON, the portal is the final phase of automating all BDCs’ operations and integrating them with the operations of CBN, NFIU and Nigeria Inter-Bank Settlement System (NIBSS) for improved compliance with regulation and seamless operations.

ABCON president, Alhaji (Dr.) Aminu Gwadabe who unveiled the platform at the event attended by over 4,000 BDCs, regulatory agencies and players in the financial sector, described it as a game changer in the Nigeria BDC industry.

Gwadabe who spoke on the theme: Digitizing  BDC Operations for Efficiency, Transparency and Regulatory Compliance, said the project will enhance BDCs compliance with set regulations, restore their lost glory and promote market integrity.

The platform, Gwadabe explained, allows BDCs send their reports online real time, thereby removing the challenge of manual rendition of reports that has been confronting operators for decades.

The ABCON boss said: “The objective of this launching is firstly, to change the negative perception towards BDCs in Nigeria. We have a very negative perception from the public and regulators. This is due to the nature of our operations which has been manually-driven for decades. Today, we are by this ABCON Live Run Automation Portal project, automating BDCs operations nationwide. This will not only bring efficiency to our business, but change the local and global perception of our operations for good”.

According to Gwadabe, even foreign investors look at the perception of every country before deciding to do business with such country. “So, this is our own way of improving the image of Nigeria in the eyes of international community. Remember that this year will witness the visit of Financial Action Task Force (FATF) to Nigeria for the assessment of the country. The FATF views BDCs as one of the weakest links in the Nigerian financial services value-chain.   So, because of that, we want to improve the entire perception of BDCs in Nigeria more importantly by putting tested IT infrastructure for our members to utilize,” he said.

He further explained that the automation integrates three of Nigeria’s regulatory agencies. First, it addresses the CBN, NIFU and the NIBSS platforms.

“We send our Suspicious Transactions Reports (STRs) daily utilizations and purchases  fillings to the CBN. To the NFIU, we conduct our Cash Transfer Report, STR. The NIBSS platform will capture  Know Your Customers (KYC) validation and Bank Verification Number (BVN) validation of our clients. So, you can see, it is robust and all encompassing in addressing anti-money laundering and terrorism financing. The anti-money laundering and terrorism financing is fast damaging the image of financial institutions, and BDCs are no exceptions. That is why we are putting this automation for our members to be empowered to compete globally, and comply with regulations with ease,” Gwadabe stated.

On How the Portal Works

Gwadabe explained that the project came with three layers and stages. First layer is on online real time registration of our members with a success rate of over 4,500 BDCs registered nationwide. This layer is to enable our members conduct their membership registration from any of their location without coming physically to ABCON Secretariat.

The second layer bothers on automation of ABCON’s operational process, book keeping, issuance of receipt, preparation of accounts, balance sheets, ledgers and sales/purchase registers. The most important of this layer is the online real time rendition of returns to regulatory agencies.

Another important feature of this layer is the BDCs on boarding and integration of the BVN platform on the NIBSS portal for verifications and validation of clients’ BVNs, which is a most vital requirement forex sale.

The IMTOs Challenge

The ABCON boss said the group is  still discussing with the CBN on making BDCs International Money Transfer Operators (IMTOs) direct agents after the regulator approved additional agents for the country.

“Partly, the complain of CBN is whether the BDCs have the right infrastructure in place. The IMTOs look at that criteria too. They want to know if BDCs have internet, computers, scanners to capture their transactions. And all our members here today have put those structures in place. And there is about $24 billion that come into Nigeria annually from the Diaspora”.

Continuing, he said: “The CBN only captures six per cent of this Diaspora remittances and the rest goes under the counter without any tracing.  And the BDCs with our number of 4,500, (only China that has 1,500 in the world), we are actually the best to utilize the inflow of IMTOs. They are about 60 now, and we are still pushing to the CBN, letting them know that we can do it and the full automation of BDCs’ operations launched today is another milestone and proof that we are ready to play that role in the interest of the economy,” he stated.

Gwadabe said that forex business is a live business that has direct impact on the economy and livelihood of every family.

According to Gwadabe, the BDCs have unified the street rate and the official BDC rate. “We are talking of N358 to dollar official rate and even N360 to dollar, which is the benchmark of the CBN. So, I congratulate our members and we are celebrating ourselves and that’s why we are coming with IT to ensure we record more successes”.

The CBN was represented at the event by Assistant Director, Trade and Exchange Department, Mrs. Adebola Ayedun; Samuel Oluyemi represented NIBSS Acting Managing Director, Niyi Ajao; and NFIU was represented by Adangbe Williams while Tony Ewerem represented Travelex Nigeria .

Higher Transaction Margin for BDCs

Gwadabe also called on the CBN to review the transaction margin for BDCs upwards to five per cent adding that the current one per cent that operators take is not sufficient and falls below global standards.

He said 10 per cent transaction margin is the common global practice. He said the automation of BDCs’ operations is a good step needed to get the regulators consider raising the transaction margin for Nigerian BDCs.

Also speaking on the transaction margin, General Manager, Travelex Nigeria, Tony Enwereji, said that in other countries where the company operates, transaction margin is always around six per cent.

He said that ABCON and Travelex have come a long way, thanking the BDCs for their support.

He praised the ABCON management led by Gwadabe for its foresight and ideas that have continued to lift BDC business in the country.

Assistant Director, Trade and Exchange Department, Mrs. Adebola Ayedun who represented the CBN, said ABCON has taken a laudable step to support the economy adding that the apex back is fully in support of the automation project.

NIBSS Representative, Samuel Oleyemi, said ABCON and NIBSS started the automation journey when everyone was still doubting the possibility of making it happen. He said that BDC business is globally recognized and contributes immensely to financial system growth. “The financial system is incomplete without BDCs. We at NIBSS want you to continue to comply with set regulations. NIBSS will partner with ABCON to ensure that only 36.6 million people in Nigeria with BVN will buy dollar from BDCs,” Oleyemi said.

Also speaking, representative Head Compliance at NFIU, Adamgbe Williams, urged BDCs to always comply with set regulations.


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