The future of Africa’s remittance sector, and indeed its wider economy, is rooted in technology and collaboration – two elements that IAMTN values highly. We spoke with the CEO of Ecobank Group, Mr Ade Ayeyemi, to further discuss these themes and the banking group’s 2020 Fintech Challenge.
Ecobank Group, or Ecobank Transnational Inc. (ETI) to give the organisation it’s full name, is a pan-African banking giant that currently has a presence in nearly 40 countries. With over $20 billion of assets, Ecobank is the African bank with the most extensive footprint across the continent.
The Group appointed Mr Ayeyemi, a highly-experienced banker, as Group CEO in September 2015. Prior to joining Ecobank, he was CEO of Citigroup’s sub-Saharan Africa division, based in Johannesburg. A chartered accountant, Mr Ayeyemi is also a trained UNIX administrator and network operating systems manager.
We’re delighted to reveal that Mr Ayeyemi will be a keynote speaker at IAMTN’s next African Summit. We recently caught up with him to discuss the remittance market, the wider industry and how technological innovation will make the pan-African business model thrive.
(IAMTN) What is Ecobank’s role in the remittance space?
(Mr Ayeyemi) Well, remittance is a very important service that we have been offering for a very long time. It of course requires an originator and an end point, and we believe that we offer flexibility to recipients – they can now pick the money up physically from an agent with their ID, receive it straight into an Ecobank account, or pick up at an ATM. Thanks to digitisation, we’ve been able to broaden the options to give emerging consumers choice.
How do you see the remittance industry developing in this new decade?
It’s becoming instant, with a proliferation of end-to-end and 24/7 services. The digital revolution means that remittances can be originated and delivered rapidly and at much greater scale.
Digital also reduces costs. It’s having a big impact on price, which has typically been much higher in Africa than in other markets around the world. As digital capabilities increase, we’ll see a convergence in terms of pricing – the cost of delivery will go down and be more in line with other regions.
I think digitisation will also increase the frequency of remittances. Traditionally, people have saved and then remitted money maybe once a quarter, or twice a year. Now that there is the ability to originate digitally, I believe that people will be less inclined to wait until they have saved a certain amount – it will be more a case of ‘remit as you go’. Digitisation has been a real boost in terms of convenience and we’ll see bigger volumes through alternative means as a result.
How important is collaboration between the private sector and the region’s governments?
It’s very important that governments support the idea of letting money come through official channels so that they can see the flows, and benefits, themselves. The more sight of it they have, the better they can plan.
Governments can help to lay the foundations for a good operating environment that benefits the economy, population and wider diaspora. As an example, they can use various embassies to advertise and promote the use of official channels. Crucially, governments should carefully consider regulations to ensure that innovation is not stifled and to help drive down transaction costs.
Africa is well known as the home of mobile money, but how else do you think innovative technologies can boost inclusion and support emerging economies?
Once a product or service is digitised, it makes it much easier and cheaper for people to consume it.
One good example is the agricultural value chain. In Africa, the route to market is a big challenge in terms of logistics and storage. Digital advances are making it simpler for people to collaborate with other stakeholders in the value chain and other sectors. Information and logistics can now flow as rapidly and smoothly as payments.
Let’s say that you are producing tomatoes. You now have the technology to liaise with a transport company, book a time slot that’s convenient, and then arrange the appropriate space in a storage unit – all at the touch of a button. People are much more connected and small-scale farmers can benefit from the scaling of the value chain and goods to market.
Success in the agricultural sector means reduction in the demand for foreign exchange to import food items into the country and also the creation of a new generation of entrepreneurs. At Ecobank, we work with customers to provide support in harnessing and mining value from the huge natural resources across the continent.
Finally, can you tell us more about the Ecobank Fintech Challenge 2020?
The forward-looking programme identifies and partners fintechs that are ready to scale and provides them with support and access to Ecobank’s African markets so that they can grow to become true Pan-African success stories.
The Challenge is open to all fintechs on the African continent – those interested must apply by 12 April 2020. The selected finalists then participate in the Ecobank Fintech Innovation Fair, with the top three finalists winning cash prizes they can use to further their growth. All finalists are inducted into the Ecobank Fintech Fellowship, which affords them the opportunity to explore deals, integration and commercial partnership with the Ecobank Group.
We’re very proud of the Challenge. It provides the perfect platform for people to bring their intellect, skills and organisational capacity to focus on specific problems and the creation of sustainable solutions.
For further details on the Ecobank Fintech Challenge, please visit Ecobank’s dedicated microsite.
Mr Ayeyemi will be a speaker at the IAMTN Africa Summit 2020. Given the current situation with the Coronavirus pandemic, we are working closely with stakeholders and the authorities to find a suitable new date, which will be announced in due course. Please stay tuned to the IAMTN website for updates.