How critical is financial inclusion to the nation’s economic growth?
Financial inclusion has assumed a greater level of importance due to its perceived relevance as catalyst for economic growth since it is critical for attaining inclusive growth in an economy.
For this critical reason, capturing the unbanked and underserved segments of the population into the financial system and making financial services accessible is fast becoming a key area of concern to policymakers because it has far reached economic implications.
Banks today have greater role to play because the journey so far have been bumpy though lots have been achieved by the Central Bank of Nigeria(CBN) since the commencement of National Financial Inclusion Strategy (NFIS) in 2012.
The main goal of the NFIS is to ensure that 80per cent of Nigerian adults are financially included by 2020. Before this, the formal use of financial services by the adult population stood at 36.3per cent in 2010.
To achieve the 2020 goal, the Central Bank introduced strategies to spike innovation in the financial services sector in Nigeria and by 2017, one amongst the achievements was that the CBN had given over 20 licenses to mobile money operators, which has currently grown to 21.
But the pending challenges are still lingering which was revealed by the Enhancing Financial Innovation and Access (EFInA) in its 2018 data, stating that 38.1million of Nigeria’s 106million (18years and above) adults or 36 percent of Nigerians remain completely financially excluded.
Also, Augusto & Co on Consumer Digital Banking disclosed that only 34per cent of the respondents said they had experienced the service of digital banks. Only 17per cent of respondents above the age of 55 are aware of their services, while for people aged 41-54, the awareness rate stood at 31per cent. This spells the need to deepen the financial inclusion drive if Nigeria is to attain the NFIS target and accelerated economic growth.
The 2020 financial inclusion target wasn’t attainable. How best can the industry deepen and achieve better results?
The Central Bank may have missed the 2020 target of 80 percent for financial inclusion, but it stands a better chance of meeting the target of 95per cent by 2024. Banks must take this seriously and come all out to support the system towards achieving the set goals.
To achieve the NFIS target for inclusive economic growth, the financial sector must strongly leverage technology (mobile and digital channels) to promote financial inclusion and enhance access to financial services for the unbanked and underserved segments of the population. Banks cannot push financial inclusion unless they also push secured technology inclusion.
For us in Heritage Bank, we have continued to leverage on technology to revitalize the financial inclusion drive in the industry. We have been deploying huge resources and our vast networks to deepen financial inclusion in the country for inclusive economic growth.
It appears that some of the bottlenecks are yet to be addressed without the adoption of more secured technological tools. What are banks doing about this?
Like I said earlier, banks cannot push financial inclusion unless they also push secured technology inclusion.
For Heritage Bank, we have continued to entrench financial inclusion across board via creating access to accounts and other financial products, savings, mobile money systems and payment systems that provide opportunities for financially excluded Nigerians and Micro, Small and Medium Enterprises.
Banks operating on the financial space that have not come to terms with the need for a more secured technology should be more innovative to support the inclusive drive.
How has partnership with FinTech help promote the financial inclusion?
The bank launched an API Sandbox to accelerate the ideas of technology entrepreneurs to build innovative and commercially viable products that were birthed through HB LAB.
This platform provides a suite of financial and non-financial APIs targeted to meet the needs of FinTech, Tech SMEs, and Communities. Our APIs grants Tech Companies, third-party developers, and non-Fintech companies access to multiple payments and financial services required by their customers.
Following the launch of HB’s API Sandbox, the bank partnered with API aggregator Companies to extend the Bank’s API services to a wider audience, layering their value-added services to deliver our BaaS platform. Banking as a Service (BaaS/Open Banking) is an end-to-end business process that allows FinTech and other third-party service providers to offer core financial services to their customers by integrating with the Bank via our readily available APIs.
This is a billed service that also provides relevant data insight required to pursue aggressive retail accounts acquisition by leveraging the aggregator robust retail prospect pipeline.
How has your bank redefined digital banking space?
Every organisation wants to produce and maintain leading edge products, but getting the right innovative products are critical and complex, which means you need to have on ground the right team and tools to achieve it.
In this regard, Heritage Bank is fast driving financial inclusion through a robust, innovative, and advanced digital banking solution, ‘Octiplus,’ which was launched on the banking space.
Octiplus is a bank-agnostic, all-in-one digital banking application, which grants users access to a bouquet of financial, lifestyle and social networking features with the added convenience of converging card-based payments within one application irrespective of the issuing Nigerian bank.
With Octiplus, we are redefining the concept of digital banking for the discerning mobile user, as the app is equipped with several exciting features that reiterate the bank’s commitment to expand its digital architecture and modernize its interactions with the banking public, irrespective of your preferred financial institution.
Octiplus promises an intelligent Omni-channel experience which augments the usual transactional features including bills payment, funds transfer and airtime recharge with its unique ability to facilitate person to person/group interactions which encourages small businesses and a thriving side hustle for young professionals. The App is now available for download on the Google and iOS App Stores.
Through what channels are the younger generations included?
Businesses often struggle to reach their customers despite having products that effectively provide innovative solutions to customer’s needs. When ensure that your products can meet the needs of different market segments it will be seamless to reach even the younger demographic.
HB Bud account is one tailored made product, which is a savings account for children and the younger demographic aimed at introducing financial literacy and inclusion. The account can be opened in trust for a child by the parent/guardian who will be the primary account holder with the responsibility of running this account until their child attains adulthood and can solely operate their own accounts or possibly move to other age-appropriate products.
This product was initially launched in 2014 as a unique proposition to cater mostly to the educational needs of children and young adults who are preparing and saving up for further education and, as well, deepen brand visibility and increase the bank’s market share.
However, some operational exigencies and regulatory framework have necessitated the modification and adjustment of this product to serve the customers optimally. Children and teens from 0 to 18yrs are the target market. The features are unique as outlined: Access to cash backed loan by parent/guardian/sponsor for school fees/education loan. You can access up to 70per cent of your balance held with the Bank as cash backed loan.
The customer must have run the BUD account for a minimum of 6 months to access the cash backed loan. Ease of saving through standing order instructions. Access to exclusive events. Free participation in the BUD MINI career mentoring and coaching sessions once a year. Opportunity to act as a Heritage Bank Executive Committee member for one day.
How have your bank encouraged the unbanked through HB Starter Product?
This is the banks flagship CBN KYC Tier 1 savings account to cater for the unbanked. It is a level 1 entry into savings account category in Nigeria, in which an individual can open without having the mandatory requirements/documents to open a standard or regular account in Nigeria.
This is one way of ensuring that all citizens of Nigeria are financially included since the account can be opened with or without a smart phone at the bank or online. In essence, this type of savings account doesn’t require any utility bills, or even an ID to open.
Most people who fall under this category usually do not see the need to open an account because they find it easier to save whatever money they have in their houses. This category of people wants to avoid bulky manual account opening process and have a better time management. This product is very precise and requires minimum account opening documentation, also it can be done at the comfort of one’s home.
Customers can in addition be assisted by the Bank’s relationship managers and sales teams. Also, customers can get on the bank’s website to initiate a new account opening process from start and receive the account number at the end of the process.
What product is targeted at individuals across all market segments?
This is known as HB Individual Current Account Product, which is a checking account for all individuals across market segments above the age of 18years. This account has been made seamless with unique features for individuals’ access to loan products, minimum balance of N0.00, No COT on all transaction, account opening balance N5, 000 and access to clearing check book.
Does Heritage Bank has a fully integrated payment processing platform with infrastructure for digital payments across Africa?
Through the customisation of payment gateway, Heritage Bank possess a unique product known as the CheckOut, which is a fully integrated payment processing platform with infrastructure for digital payments across Africa.
The platform provides an underlying technology platform that allows businesses to receive and issue payments from anywhere in the world, with robust inbuilt fraud management, compliance, and security applications.
Also, the bank’s Virtual Accounts are series of off-balance accounts whose total balance mirrors the balance in pool account. The pool account is linked to all the virtual accounts and the balance in the pool account mirrors the total balance in the virtual accounts.
What opportunities have your bank availed to the financially excluded in the MSME sector?
The Heritage Bank’s Business Account is a cost-effective current account that provides flexible, affordable, and transparent pricing grid based on debit monthly turnover covenant. The product is targeted at all Micro and Small Enterprises of SME and Retail segments.
Ensuring seamless transaction using HB transfer code, the transfer code *745# of Heritage bank guarantees seamless usages and reduces the stress of going to the branch of Heritage bank to make payment. Just like other banks, you can use Heritage bank mobile banking code which is *745# to check your account balance, transfer money to Heritage bank or other banks, pay for utility bills and cable TV subscription, pay for church’s services everywhere you are using your mobile phone.
What other avenue did Heritage Bank created to capture unbanked in educational sector?
To further capture individuals in educational sector into the financial inclusion space, Heritage Bank unveiled the Alumni Banking Service and Acada Portal Solution which are internet-based solutions that seamlessly integrate school’s portal and Alumni platforms that benefit the different stakeholders and complement efforts in attaining the best global practices in school management.
Alumni Banking service is an educational provision by Heritage Bank that seeks to utilize and track, engage, endow, and invest a model to help secondary and tertiary educational institutions create modern alumni systems that contribute to their financial stability just like great alumni do in the best global schools.
So far, how has HB YNSPYRE Account factored in creative industry, e-sport gaming into financial inclusion space?
YNSPYRE Account is a product targeted specifically at the creative economy populated by not only youths in video and film, and music. It goes much more than that as it involves people in technology, the creative industry and gaming as part of the creative industry.
The involvement of the Heritage Bank is to identify income-earning opportunities for some people in the economy. HB has designed a product that identifies and finds a mechanism that guides Nigerians in gaming or e-sports. The bank is set to revolutionize e-sports by bringing it to an acceptable level attained by football, lawn tennis and other crowd pulling games.
Heritage Bank is fast changing the narratives of the banking landscape through the adoption of more secured technology (product and channels) for seamless services that guarantee the larger part of the population is involved in economic activities as well as being financially included.
How can banks do more to ensure that Nigerians have adequate access to financial services?
Nigeria banks should restrategise to ensure that the populace access financial services and products that guarantees households and businesses irrespective of income levels have access to and can effectively use the appropriate financial facilities they need to improve their lives and further their savings and investments.