GTBank Chief Executive Officer (CEO) Segun Agbaje, says the emergence of Fintech and Network Providers in the banking sector doesn’t frighten him despite their disruption of the banking industry.
Agbaje made this comment following a question from Nairametrics analyst Olalekan Fakoyejo at a session at the Social Media Week 2020 held at Landmark Event Center.
FinTech companies operating in the banking space are often termed “Neo banks” or “Challenger Banks” and have disrupted the sector all over the world with innovation and faster route to market.
He stated that winning the digital payment race is more than just possessing the best of technology. While Agbaje admitted that the fintech and telecommunications companies are pulling their weight and making inroads into the banking space, their presence poses no threat to him and GTBank.
Agbaje emphatically responded, “I have no fear for Telcos; we are ready for Telcos. All we ask for is an equal level playing field.”
There have been arguments as to which sector or firms will dominate the mobile payment market after the Central Bank of Nigeria (CBN) began to offer licenses to fintechs and network providers in order to ensure the growth of financial inclusion.
Currently, the digital payment market is saturated by several digital payment firms, but during his presentation, Agbaje identified the likes of OPay, PayPal, Cowrywise, Piggybank, MTN, Square, Monzo, Venmo, Cash App, Apple Pay, and Monzo as rivals that are exploiting the growing disconnect between the traditional banks’ services and the evolving customer needs.
Though public sentiment is in favour of the Fintechs and Telcos triumphing over the traditional banks, for Agbaje, anybody with the ability to leverage digital technology can become banks’ competitor.
Why is Agbaje not fearful of disruptors?
According to the GTBank boss, winning the digital payment race or dominating the market is beyond just acquiring the best of technology, because technology will become a commodity available to all.
“I will take a leap of faith today. The easy answer will be for me to say to you, the best who has the best technology will win, but I will be lying to you because technology will become a commodity… So technology will never be the differentiator,” Agbaje stated.
He affirmed that the race would be won by the company using the best technology to offer the best of customer experience. This would result in customer loyalty and cause loyalty switch in the customer base of the digital payment market. “Today, customers don’t want service, they want experience,” Agbaje said.
“So the person that is going to win, whether its fintech, telco or bank, is the one built by technology but that can still give you that feeling that there are people who care about you, that this organisation cares about you.
“Whoever can give you that feeling on a digital platform is who is going to win,” Agbaje said while declaring that GTBank would win because of the digital products the bank possessed.
Should disruptors be afraid of GTBank?
Nairametrics learnt that while some traditional banks are stuck in the past or dragging their feet as technology evolves, GTBank appears to be ahead in the fight against disruptors. GTPay is competing in the payment system, GTCollections is also competing in the Aggregator’s market. GTBank is involved in Issuers and Acquirers market, while GTMoney Transfer is ruffling feathers in IMTOs. In the e-commerce and entertainment space as well, GTBank has Habari.
Also, the bank has been crashing lending rate to stifle competition. GTBank reduced its ‘Quick Credit’ interest rate on loans to 1.33 per cent per month from 1.75 per cent, making it one of the lowest lending rates in a space that still has some rivals offering interest rates as high as 7 per cent.
Aside from financial products, one of the ways GTBank is plugging into the customer base is through organising events that associate with personal and business needs of Nigerians. The bank deepens its retail service through events like GTBank Fashion Week, GTBank Food and Drinks, Lagos State Principal Cup, amongst many others.
Opportunities exist everywhere
Agbaje explained that opportunities are not limited to one country, as Sub-Saharan Africa’s digital payment space still possesses enough potentials and could grow to $16 billion annually in the next few years, according to McKinsey.
In Nigeria alone, penetration rate is just 13 per cent, while Kenya has the highest at 68 per cent. So Africa would remain the frontier for platform-based payment. He pointed out that Africa’s young population would also drive competition.
Agbaje explained that Africa has a very young population which is industrious and tech-savvy, so the payment space would keep growing astronomically. He added that small and medium Enterprises (SME) is also a key component that would make the market viable. He disclosed that with over 180 million SMEs in Africa, over 4.5 billion transactions have been made by SME.
Agbaje on job loss scare
With banks reviewing their business models to accommodate technology advancement, there are fears that the eradication of traditional banking system could lead to job loss.
Technology has been projected to take over 30 per cent of bank jobs, but Agbaje said there’s no cause for alarm because as technology expands bank services, so will job opportunities be created. He said banks can’t remain stagnant because of job loss scare; the bank needs to evolve.
US gives reasons it warned citizens against travelling to Nigeria, lists 12 high risk states
The US government has issued a level 3 Travel Health Notice for Nigeria due to COVID-19.
The United State Government has advised its citizens against travelling to Nigeria due to the Coronavirus pandemic, terrorism, civil unrest, kidnapping, widespread inter-communal violence, and others.
This warning is contained in a travel advisory statement that was obtained from the United State Department of State website.
The statement also disclosed that the Centre for Disease Control and Prevention (CDC) had issued a level 3 Travel Health Notice for Nigeria due to the Coronavirus pandemic. Also, some parts of the country have increased risk.
“Reconsider travel to Nigeria due to Covid-19. Reconsider travel to Nigeria due to crime, terrorism, civil unrest, kidnapping and maritime crime. Some areas have increased risk.’
‘’Do not travel to; Borno and Yobe States and Northern Adamawa State due to terrorism; Adamawa, Bauchi, Borno, Gombe, Kaduna, Kano and Yobe States due to kidnapping; Coastal areas of Akwa Ibom, Bayelsa, Cross Rivers, Delta and Rivers States (with the exception of Port Harcourt) due to crime, civil unrest, kidnapping and maritime crime,’’ the statement said.
It stated that violent crimes such as armed robbery, assault, carjacking, kidnapping, and rape, have become common throughout the country. As such, US citizens were advised to exercise extreme caution throughout the country due to the threat of indiscriminate violence.
“Terrorists continue plotting and carrying out attacks in Nigeria, especially in the Northeast. Terrorists may attack with little or no warning, targeting shopping centres, malls, markets, hotels, places of worship, restaurants, bars, schools, government installations, transportation hubs, and other places where crowds gather.
“Sporadic violence occurs between communities of farmers and herders in rural areas.’’
The US government acknowledged the fact that it has limited ability to provide emergency services to US citizens in many parts of Nigeria due to the security conditions.
Going further it stated, “Do not travel to Borno and Yobe States and Nothern Adamawa. Terrorist groups based in the Northeast target churches, schools, mosques, government installations, educational institutions and entertainment venues. Approximately two million Nigerians have been displaced as a result of the violence in Northeast Nigeria.
“Do not travel to Adamawa, Bauchi, Borno, Gombe, Kaduna, Kano and Yobe States. The security situation in Northwest and Northeast Nigeria is fluid and unpredictable, particularly in the states listed above due to widespread inter-communal violence and kidnapping.
“Do not travel to the coastal areas of Akwa Ibom, Bayelsa, Cross Rivers, Delta and Rivers States (with the exception of Port Harcourt). Crime is rampant throughout Southern Nigeria, and there is a heightened risk of kidnapping and maritime crime, along with violent civil unrest and attacks against expatriate oil workers and facilities.’’
World’s largest oil company to pay $75 billion annual dividend, despite plunge in profits
Saudi Aramco is the national energy company of Saudi Arabia.
The world’s largest oil company, Saudi Aramco reported a 73% drop in profit Q2,2020 profit and still kept its plans to pay $75 billion in annual dividends in a report credited to Bloomberg News
Saudi Aramco reported a plunge in profits for Q2,2020 of 24.6 billion riyals compared to 92.6 billion riyals recorded in the same corresponding year.
Aramco will pay a Q2,2020 dividend of $18.75 billion, most of it to the government of Saudi Arabia, the company’s major shareholder.
The plunge in profit was due mainly to “the impact of lower crude oil prices and declining refining and chemical margins,” Aramco said in the statement to the Saudi stock exchange.
“Strong headwinds from reduced demand and lower oil prices are reflected in our second-quarter results,” said Chief Executive Officer Amin Nasser.
“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies.”
Quick fact; Saudi Aramco is the national energy company of Saudi Arabia. It produces five grades of crude oil and natural gas liquids.
It also produces refined energy products that include liquefied petroleum gas, ethanol, naphtha, and other products.
It exports about 75% of its crude oil to foreign markets, most often with its oil tankers. Saudi Aramco has access to crude oil reserves of about 260 billion barrels, the largest in the world.
OPEC’s largest oil exporter, Saudi Arabia has been hit hard by global economic restrictions aimed at curbing the spread of COVID-19.
The Saudis make most of its revenue from crude oil, which has dropped 33% in value this year.
Twitter shows interest in buying TikTok
TikTok has come under fire from US lawmakers over national security concerns surrounding data collection.
Twitter has now reached out to TikTok owner, ByteDance, showing interest in buying the US operations of the video-sharing app, private sources familiar with the matter told Reuters.
It, however, looks like a herculean task for Twitter in outbidding Microsoft, and concluding the megadeal deal in 45 days, as directed by US President, Donald Trump.
The odds against Twitter:
Twitter has a market capitalization of around $30 billion, almost as much as the same valuation of TikTok’s US operation. What this means, therefore, is that Twitter will need to raise additional funds before the deal could see the light of day.
“Twitter will have a hard time putting together enough financing to acquire even the U.S. operations of TikTok. It doesn’t have enough borrowing capacity,” said Erik Gordon, a professor at the University of Michigan.
“If it (Twitter) tries to put together an investor group, the terms will be tough. Twitter’s own shareholders might prefer that management focus on its existing business,” he added.
READ MORE: Tiktok’s In-App revenue surges amid lockdown
However, one of Twitter’s major shareholders, private equity firm Silver Lake, is interested in supporting Twitter in part for the required funds needed to pull the deal through, one of the sources to Reuters added.
“Twitter has also privately made a case that its bid would face less regulatory scrutiny than Microsoft’s, and will not face any pressure from China given that it is not active in that country,” the sources said.
ByteDance, Twitter, and TikTok declined to comment.
TikTok has come under fire from US lawmakers over national security concerns surrounding data collection.
Some days ago, Nairametrics reported about Microsoft’s offer to acquire TikTok’s U.S operation, following the recent escalation of President Trump’s attacks on TikTok and other Chinese tech firms.