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Home Lead-In

Will Banks Become Tech Companies To Survive Fintech Challenges?

by Rarzack Olaegbe
2 years ago
in Lead-In, Click Send
Reading Time: 3 mins read
Banks
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Your needs have not changed. However, the shape and form of your banker have remained the same. Your banker either lends or saves your fund. This has not changed. Nevertheless, how it delivers these capabilities is changing. For instance, do you remember the days of the tally number? In addition, the long delay? When you would spend hours at the banking hall?

 The delays have morphed into a network glitch. One of the top banks has been experiencing network downtime for the past two weeks. As a customer of this particular bank, you have received your “tally number.” Please wait.     

On The One Hand

Technology and mobile phones have taken over the role of your bank. While you do not visit the bank as often as before, most times you have to wait due to network downtime. With a device, you can access your bank at any time. Day or night. Your bank can serve you digitally. Now. Your bank is investing in an Omni-channel. 

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You can meet your bank at the ATM. You can hobnob with it on the internet. You can hold a dialogue at the point of sales. You will not remember you are in the confines of your bank until you experience network breakdown. Until it is impossible to have the same seamless experience. That is when technology goes awry.   

But the slight technology glitch has not deterred the banks from deepening their technology investment. In South Africa, Standard Bank and FirstRand Bank have adopted digital technologies. They want to remain competitive. 

In India, ICICI Bank and HDFC Bank are leading the adoption of digital technologies. They are offering digital banking services to a growing population of smartphone users. In Russia, Sberbank has invested in technology to improve its digital services. It plans to become one of the largest banks in the world.

On The Other Hand

First Bank has deployed an agile and resilient technology-enabled innovation that allows it to stay ahead of the curve. Zenith Bank is using technology to create innovative products that meet the needs of its teeming customers. GTB’s use of technology and its commitment to offer socially responsible banking. Access Bank has invested in leading the evolution. It has a partnership with the Africa Fintech Foundry (AFF) to nurture the next generation of cutting-edge financial firms.

 The investment has not turned the banks into fintech firms. In reality, it has prepared the banks for the future. It has empowered them. It has still not made them as dynamic as the fintechs. But having the understanding of what the future holds in the financial system is an advantage. Using technology to serve the customers is an edge. Will the banks turn into fintechs? It is difficult. It is difficult for the camel to compete with whale in the ocean.     

Dr Ebenezer Onyeagwu, MD/CEO of Zenith Bank said any company that will be relevant either has to be a technology company or a company using “tech to deliver its unique sector-based products and services.” Banks will gradually become technology companies with a banking license. Healthcare companies will be technology with healthcare licenses and more.” Onyeagwu spoke at the technology fair organised by the bank in Lagos.

Max Santos, a senior Technical Programme Manager, wrote on LinkedIn that traditional banks will not be replaced by bigtech. Banks have vast experience in financial services and a proven record of security and stability.

 “This gives the banks an advantage over technology companies that are entering the financial sector. Instead, banks and technology companies will likely work together to offer innovative and personalised financial solutions to customers. It is a simple message. If you’re not investing in technology, you’re falling behind,” Santos said.

 In the short term

With all the glam, oomph, and tech investment by the banks, banking has still not changed! 

Fintech still holds the ace. Because your taste has changed. # 

 

 

Tags: FINTECH
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Lead-In

Providus Bank has acquired the 34% equity stake held by the Asset Management Corporation of Nigeria (AMCON) in Unity Bank Plc, marking a decisive step toward the long-anticipated merger between the two financial institutions. The deal, valued at about N6.5 billion, saw AMCON offload its decade-old holding in Unity Bank to Providus at a price of N3.18 per share, representing a 110per cent premium to the bank’s prevailing market value of N1.50 on the Nigerian Exchange. Industry analysts said the transaction signals a turning point for Unity Bank, which has faced prolonged struggles with weak capitalisation, rising non-performing loans, and declining market relevance. By transferring AMCON’s strategic stake, they noted, Providus has strengthened its hand as it pushes for regulatory approvals to consummate a full merger. AMCON acquired its Unity Bank stake during the 2011–2012 banking sector clean-up after the global financial crisis exposed balance sheet vulnerabilities across second-tier lenders. Its divestment, according to banking sources, underscores the corporation’s gradual exit from long-held equity positions as it focuses on recovering toxic assets and reducing its systemic footprint. “AMCON’s sale to Providus is significant not just for Unity Bank but for the entire financial system,” said a Lagos-based investment banker. “It shows the government is serious about cleaning up legacy interventions while paving the way for stronger private-sector-led banks.” Unity Bank shareholders are set to benefit from the deal’s pricing structure. At N3.18 per share, Providus’ offer more than doubles the bank’s trading value, giving investors a rare premium exit in a market where bank stocks often trade at steep discounts. For minority shareholders, the merger if approvedcould also unlock value by combining Providus’ niche strength in corporate banking and digital services with Unity Bank’s broader retail and SME base. Providus, one of Nigeria’s fastest-growing mid-tier lenders, is widely seen as using the Unity Bank deal to accelerate its ambition of achieving national bank status. By absorbing Unity’s branch network and customer base, the lender would scale its operations beyond its current limited licence, positioning itself to compete more aggressively with tier-one institutions. “The synergies are clear,” said a senior Unity Bank executive familiar with the talks. “Providus brings balance sheet strength and digital innovation, while Unity offers reach and brand equity, especially in northern Nigeria.” Following AMCON’s divestment, the proposed merger will be subject to approval from the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), and Unity Bank shareholders. Both banks are expected to present a detailed merger scheme in the coming months, outlining share swap ratios, post-merger governance, and capital plans. Market watchers say regulatory scrutiny will focus on whether the combined entity meets CBN’s revised recapitalisation thresholds, which mandate higher minimum capital bases for Nigerian banks. The Providus–Unity transaction comes amid a wave of consolidation moves triggered by the CBN’s ongoing recapitalisation drive. Several lenders are exploring mergers, acquisitions, or fresh capital injections to meet compliance deadlines ahead of 2026. “This is the first big-ticket transaction of the recapitalisation era,” said a financial markets analyst. “It won’t be the last.”

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