Dr. Evans Ejike Woherem needs no introduction in Nigeria's Banking Industry. With a Masters in Economics and a PhD in Expert Computer Systems, in addition to over 24 years experience of developing, managing, researching, writing and lecturing on Information Technology, this Harvard Business School alumnus remains an indefatigable authority in eBanking matters.

He was at various times, Senior Consultant and Head of Business Architecture, ABSA Bank of South Africa, General Manager IT and Electronic Banking, FSB International Bank Plc., and Executive Director, IT, Electronic Banking and Services of the First Bank of Nigeria Plc. He is currently the Executive Director, Operations and Services of the Unity Bank of Nigeria.

In this interview with YUSUF SANNI and WALE JOHNSON, Dr. Woherem takes an extensive look at the banking industry in Nigeria and particularly, the Unity Bank and concludes that with the deployment of IT applications in the industry, banking services in Nigeria are becoming not only more challenging, but exciting. Blip over for details.

and most of the time, customers were attended to in a non-convivial environment; and at some time also, by discourteous staff. But today, all that is history.

As you know, mainly the new generation banks started this IT revolution. They started introducing online/real-time systems; as a result of that, other banks started imitating them.

Today, we have 25 banks, products of the consolidation exercise. All these 25 banks are very strong and IT wise, have also decided to make very good use of IT. All the banks have IT as something that is central to their operations. Today, most of them have online/real-time systems.

Apart from having online/real-time systems, there are of course, so many other IT systems that banks have introduced. My thinking is that Nigerian banks today have largely done so well with regard to what I will call 'Foundational IT systems' or 'Hygienic IT systems'.

The Hygienic IT systems like I've always said are those systems that are needed by all the banks in order to be able to compete. An online/real-time system is one of the hygienic systems. Any bank that does not have an online/real-time system should not be in business. In Nigeria we've done well especially with regard to hygienic system.

The area that is still proving a lot of challenge is the area I will call strategic IT. Strategic IT systems are those IT systems that some organisations develop in a unique manner, that can help them to beat competition. If you have foundation systems, they will not enable you to compete with anybody. But not having them means that you can't even compete. So, with strategic systems, you will be able to use it as leverage for competition.

The area of strategic IT system is the area I believe Nigerian banks still need to do a lot more. Banks need to introduce systems that understand their customers; that has very good knowledge of their customers and therefore, can be used to come out with marketing plans for all their customers. That will be used to treat even single customers as if they are a single market.

A lot of banks do not have that today. Some of the systems that could help towards doing that could be a comprehensive data warehousing system that collates all kinds of data from their real-time-online banking system to human resources system, pay roll system and other applications that are databased in the banks.

These data are stored, organised and planned for good information for the bank in such a way that it will lead to good business intelligence for those banks.It is only when you have good data that gives you ample information concerning your customer and other stakeholders that you can also plan properly.

Is there any room for improvement?
Overall, I think there is room for improvement. Nigerian banks today are no longer very small, all the banks in the country have at least N25 billion capitalisations, which provides them with ample muscle to be able to afford some good systems.

IT systems are very expensive; even the type of systems I am talking about are more expensive. To introduce a good customer Relationship Management System is sometimes, even more expensive than introducing a good comprehensive banking application. That probably is part of the reason why a lot of banks in the country have not introduced some good CRM systems.

But nevertheless, with the level of capitalisation Nigerian banks have reached today, I believe that it is only a matter of time before you see that Nigerian banks start veering into some of these other areas.
Knowledge wise and skills wise, Nigerians now have that kind of skills with which to introduce most of these kinds of technologies.

Already, in a lot of banks, those systems are developing. Though the good ones are developed overseas, all it requires is for each of the banks to acquire some of those applications perhaps by partnering those organisations that have those systems and then, implement them here in the country.

Why are banks slow at complying with the Central Bank's directive on Basel 2?
I believe that all the banks in the country are aware of BASEL 2, and they are also aware of the importance of BASEL 2. But having said that, I am also aware that even in Europe and some other parts of the world, most of the banks there have not implemented BASEL 2. I even understand that the deadline for the implementation of BASEL 2, has also been extended even BASEL 2, has also been extended even for Europe not just for Africa.

One of the reasons why a lot of banks are not making frantic efforts to implement BASEL 2 is because you realize that they are taking their time to do this. I am aware that most banks in the country that belong to people outside, have called in external consultants to talk to them about BASEL 2; to draw up a programme on how to implement it. So, as a result of that, most of the banks in the country especially the ones I have been involved in, I am aware, had invited consultants. And based on the advice of the consultants, have started the implementation.

Of course, the implementation of BASEL 2 takes time. For you to have included risk management system which ultimately is what BASEL 2 is trying to bring about, you need to also have a full database of all your customers, all the transactions they have carried out, not for just one year, two years or three years but probably getting up to 10 years or more.

So that way, every new customers' applications, before they are admitted, the system will look into the database; and based on that, make decisions that will take into consideration, all risk issues. That to me is the reason why it is seemingly taking a long time. Nevertheless, all banks are aware of it; they are working towards it.

Is Nigeria really ripe for ebanking?
We should be able to first of all distinguish between ebanking and mbanking. ebanking means the carrying out of banking transactions based on electronic facilities. It means the use of credit cards, debit cards, ATMs and smart card based solutions.

Mobile banking refers more to the use of things like our mobile telephones or Personal Digital Assistance to carry out transactions. Online banking is mainly having a real time online system which currently all the banks in the country have. There are other things like telephone banking, Internet banking etc. All these also go on to make up what we call e-banking.

It's obvious that ebanking and mbanking are things that will enhance the business of financial transactions in the country. I believe that our customers or the general Nigerian banking public welcome that type of banking. Nigerians are a highly sophisticated and travelled people; as a result of that, they know much of what obtains in other parts of the world. And consequent upon that knowledge, Nigerian customers are desirous of having those things we see in those other parts of the world.

Use of ATM cards like debit cards, credit cards in addition to the use of our mobile phones to transact financial business electronically, are things that various researches carried out by Nigerian banks have shown that the Nigerian public desires here. But having said that, if you ask whether it is possible that Nigeria will tomorrow have a near cashless society, to me, the answer is yes. Yet, we have to realize that even in America and Europe where a lot of these things are in regular use, they have not rubbished the need for cash. Cash is still very much needed even in developed countries.

Here in Nigeria, cash is also going to take a long time before it disappears. A lot of people in this country even feel better when they know that their cash is in their pockets. Again, a lot of people will always want to do business with cash.

I believe in the theory of the increasing spiral as something we can use to explain the behaviour of the Nigerian banking public. It is almost like what is called the theory of stratified cultural diffusion in sociology. I strongly believe that this is what is happening in our country and it is going to happen even more so with regard to electronic or mobile banking products.

Our telecommunications infrastructure is improving everyday. The fact that we now have a mobile industry that has grown so dramatically means that almost every Nigerian now can buy a mobile phone and start making use of mobile technology, which in essence means that a lot of people can now do mobile banking.

A lot of banks that want to do business with electronic purses or that want to introduce credit cards, debit cards, are able to introduce radio-based telecommunications equipment or VSAT-based equipment that helps in routing information. Even our NITEL is making progress and will make more with its privatisation. To me, telecommunication is one area we have witnessed some dramatic and significant improvement in the country to the benefit of our electronic and mobile banking technology.

Don't you think that banks can adopt the franchise business model for the deployment of the ATMs?
You are right; the introduction of other players in the deployment of ATMs, supplying cash to those ATMs, issuance of cards to customers as well as dealing with those customers that have problems with their card among others, and having people or organizations that will play a role in each of these areas outside of financial institution, is something that will help to popularize the use of cards in transaction in the country.

I believe we are making progress given the fact that the system is at its early stage in the country. For people to make use of cards in transaction more often, ATMs must be almost in every nook and crannies of this country.

It is only that way that people will realize that there is no need to carry cash in their pockets. But today, we have banks that have ATMs in some of their branches, we also have public institutions that have ATMs, and there are many places in the country that still do not have ATMs.

The consciousness of the use of cards is not there yet, and cannot be expected to be there going by when we started. However, a lot of banks are deploying ATMs almost on a monthly basis. The Nigeria banks of today are equal to the task as they are big in size and capital; I believe in the next five years, the country will be saturated with ATMs.

Today, we have ATMC an organization that is also helping out by procuring their own ATMs and deploying them in some areas outside bank premises. These ATMs deployed by ATMC are connected to Interswitch, which means that bank customers are linked to ATMs deployed by ATMC; with this there is no need for banks to deploy ATMs at those places where ATMC had already deployed one.

Some organizations are planning to take the responsibility of loading cash in the ATMs, this when implemented will ensure that there is cash in the ATMs always, which will increase people's

network among others, as a result of that they could not have link to some bank branches where they are supposed to link up. If you compare what used to be the case four to five years ago to what the case is today you find out that there has been great improvement. This means that we are learning in both technology of networks, e-banking and e-payment system.

Today, we have Interswitch and the Interswitch we have in the country was single-handedly deployed by Nigerians. When it started, I was chairman of the company, I was absolutely delighted to find out, that, even by the time the people from South Africa that wanted to help in the deployment could arrive Nigeria , my people in the company have deployed everything.

That system is today being managed solely my Nigerians and have moved from strength to strength, now interconnecting all the banks in the country and providing all kinds of payment outlet to banks and customers and also help our GSM company to be able to provide mobile banking solutions. I am aware they have done so for MTN, Celtel and Globacom.

So, we have had some problems but there have been some improvement even today we still have some problems, we are learning and improving everyday. I believe that the type of problems we have is understandable given that we just started few years ago. Nigerians have surprised the world in the way they are mastering the technology. They plan, designe, deploy and manage the network.

Why are Nigerian banks not using Nigeria made banking applications?
To me it is not due to lack of trust or confidence in Nigerian produced banking application, I believe that it is whether there is banking application in the country today that are robust enough to cater for all the need the type of big banks we have in the country today.

Yes, there are some banking applications that have been developed in- house by some of the banks in this country. For instance in my bank, Unity Bank, one of the banks in our merger, Intercity Bank Plc, developed an in-house banking application. To me is as good as any application that is developed in this country.

When we were choosing application for Unity Bank, it was one of the applications we considered as well as some other applications developed in the country. We came to the conclusion that none of those applications are robust enough to cater for the kind of needs the bank of this size have. What we did, in our case was to come out with some requirements, we conducted analysis that helped us to grade those applications by saying that 'a good application that will serve this bank need to have so and so functionality'.So, when we took up an application we assessed its functionality until we came up with 'Banks' that gave us more than we required.

There are still some applications we are making use of in the bank that are made by Nigerians. My philosophy has been, first, you check whether there is an application in the country that meets your requirement, if the answer is yes, you go for it.

A Nigerian company CSA developed the ERC system we are using in this bank today. ERC solution is next to banking application. I looked at it, found it to be ok and I asked to myself why should I go to buy oracle financial and others when I can make use of this? In that particular case, we found an application that can satisfy our need locally.

As a result of that, we went for it, but for banking application believe you me, if by the time we over grow the present application we are using called Banks, and we found a new one in the country that is as robust or that is much more better, that can satisfy our needs of tomorrow, we would probably go for it.

Unfortunately, there are no Nigerian developed banking applications that can satisfy the needs of the banks as they are today, there could be some tomorrow. Before consolidation, some Nigerian banks were making use of locally developed banking application basically because of the size.

Apart from functionality, there is also the issue of certification, which means how good an application is in terms of security. India is doing well in the area of software because they have taken the issue of quality very seriously.

In software, there is a standard we call, Software Engineering Institute of Canadian University of Capability, Maturity Model. In this model you can appraise organizations and determine where they fall along the five level scale of reputable, manage, optimizing among others. These scales are use, largely by reputable organizations to determine who to award contracts to.

The higher you grow on this scale, the better your level of quality. In America that developed these scale you cannot find more than five companies that have attended level five whereas in India, there are more than 11 organizations that are on level five. All the Indian organizations that we are making use of their banking applications here are on level five. The highest Nigerian organizations have reached is ISO 9000. When you are at best in ISO 9000, you can only make level three.

Banks in the country have realized that customers are universal and they need to play globally, which requires global standard. So, for banks to patronize Nigerian made applications, they need to adhere to International Certification Standard.

Recently, Unity Bank launched its IT integration, where does that live the bank?
It has to do with the comprehensive banking application the bank eventually adopted called 'TheBanks'. Banks is also used by GTBank though they called it Basis. We are today using the latest version of that particular product run on Oracle IOg which is also the highest level of Oracle. The product was developed by ICS of London though owned by Jordanians but registered in London . It has a development centre and support centre in Jordan .

When are you going to start issuing cards to your customer?
We are making effort in that regard, first, we were waiting for our new banking application to be implemented in all our branches which has been done.

We are now connected to Interswitch and e-Transact networks. This allows our customers to make use of other banks and ATMC deployed ATMs as well as mobile network of e-Transact to make transfer of funds and check their account balances via their mobile phones.

Today we are deploying 35 ATMs nationwide.
So, what that means is that our customers will not only be able to make use of those ATMs of ours but will also be able to make use of those of ATMC as well as those at other banks that are members of the InterSwitch consortium.

We've also come out with a card called the 'Unity Green Card'. That card is going to be both a debit card and a credit card; so customers can choose either of them or both. As we speak, the cards are ready, fully personalised and we've started the issuance. We've done quite a lot especially for a bank of our size and had witnessed the kind of challenges we've encountered.

Remember we are talking about a bank that is the product of the fusing together of nine other banks. Of course, you know that integrating the system of two banks is a huge task, talk of integrating that of nine. A lot of people thought we'd never be able to do that. At last, we are running;
we've integrated fully, IT- wise. We've deployed our new banking applications in all our branches.

We've also installed something like Internet banking. This is in addition to us becoming a member of eTranzact, which means that our customers can do full fledged mobile banking. We've also become a member of Interswitch, which means that they can also make use of their ATMs and make use of different types of cards.

We are a member of the Western Union Group and we've deployed Western Union across all our branches now. What we haven't done much is to publicize or advertise what we've done. We can also do local money transfer for people. As a result of the online/ real-time system we have, it means that our customers can still pay in money here and collect somewhere else or have their relations somewhere else collect.

What are your strategies to catch up with the three leading banks in the country?
First of all, I think there are different kinds of banks in this country. There are some banks that did not integrate at all; they are still making use of their banking application.

they will have problems. It is not really true that all the banks rather than us, are fully integrated.

As we speak, there are a couple of banks that are not fully integrated, that are probably giving the impression of full integration. I know some banks that are still running the discrete applications of the different banks in the different branches of those former banks, and are trying to use the media to give customers the impression that they are fully integrated.

Definitely, we are not the last to integrate our IT; there are still ones that are yet to fully integrate. We've acknowledged the fact that by the number of branches we have, we are the fourth biggest bank in the country. But by some other reasons, we are not necessarily the fourth biggest.

We are not the fourth biggest in terms of revenue; we are not the fourth biggest in terms of profitability. We are not the fourth biggest in terms of Assets size and balance sheet size. But nevertheless, even as we speak, we've come out with a bank that is larger than some of these banks.

The bank we have today is doing much better than if we had summed up what these component banks were doing. That's a beginning; we knew that because we were going to integrate nine banks, it will be difficult. But we concentrated on this and now believe that we are fully merged and fully integrated in many ways, in terms of technology, in terms of processes, people and even culture, which means that what now remains is for us to hit the market and do some business.

What is now happening is promising; if you go to our branches now, a lot of people are resurrecting their dormant accounts because of exciting things happening in Unity Bank. As a result, turnover and profitability are increasing. We still realize that there is a lot for us to do and that's the reason why we've come out with an interim strategy for how to position ourselves amongst the five biggest banks in the immediate future.

We clearly know our areas of strength and have started mapping out ways of exploiting those areas of our strength. I believe definitely that this is the bank to look out for because we are going to do things in this industry that people will acknowledge.