E-Payment Review -March Edition 2019

22/E-PAYMENT /E-PAYMENTREVIEW REVIEW//SEPTEMBER DECEMBER 2018 2018

EPAYMENTREVIEW.COM

E-PAYMENT REVIEW Vol. 09 No. 04 | | Mar 2019

EDITORIAL Brown N. Ugbaja Editor

Lucy Akokotu Assistant Editor

E-PPAN MANAGEMENT Onajite Regha

Babatunde Olaleke

Kyari Abba Bukar

Communications Manager

Chairman, SUNU Assurances Nigeria Limited

Lucy Akokotu

Senator Ayo Arise

E-Payment Review Manager

Chairman, Fortunes Games

Joy Obaji

Demola Aladekomo

Administration & Membership

Chairman, Cardcentre Nigeria & Voluntary Corps

Executive Secretary/CEO

TRUSTEES Adedotun Sulaiman

Kushimo Oluwayemi

Chaiman, Financial Reporting

GOVERNING BOARD

Agada Apochi

Niyi Ajao

Managing Director Unified Payments

Olusola Teniola

Kofo Akinkugbe Managing Director, SecureID

Niyi Toluwalope Managing Director, etranzact Plc

Chairman CeBIH

Mitchell Elegbe

Chukwuma Ezirim

Council of Nigeria

Adesakin Folasayo

Tunde Lemo

Conference Coordinator/Manager

Chairman, FERMA& Lambeth Trust Group Managing Director, Investment Company Limited

Interswitch

President, ATCON

Bami Akinlade

Onajite Regha

Head, Information Technology, SecureID

Executive Secretary/E-PPAN

Macaulay Atasie Managing Director Nextzon Business Services

Strategy & Projects Manager

Eme Godwin Head, Legal, Etranzact International Plc

Ag Managing Director, NIBSS Plc

Stanley Peters

Group Head, E-Business; First Bank of Nigeria

Bob Nwojo ALTERNATE BOARD Gbenga Haastrup Group Legal Counsel, Interswitch Ochanya Dan-Ugo Group Head, CIO, Unified Payments

Head, Card Business, First Bank of Nigeria

PUBLISHED BY THE E-PAYMENT PROVIDERS ASSOCIATION OF NIGERIA (E-PPAN)

In This Issue March 2019 4 | To Our Readers

6 | 11 QUESTIONS

Charles Uduje, Chief Operating Officer, Itex

TALKING POINTS

9 |5G to reach 30 million Subscriptions by 2024, FinTechs Globally VC Funding in 2018, Access bank green bonds 10 |TeamApt Raises $5M funding, Inshort,MainOne, Facebook Connectivity collaboration, Stanbic IBTC & LBS partnership 11 |TymeBank records amazing figure, First Bitcoin ATM in Botswana, Sierra Leone takes loan to Build Switch 12 |

26 | Roundtable Discussion PSB: A Panacea for Financial Exclusion

StartUp Nation Joshua Chibueze, Co-founder/CMO PiggyVest, on automating savings for millennials

22|

NeFF Insight

24 |

The Risk Report

A Stitch in Time

Plug in devices make laptops and desktops vulnerable to cyber attacks Smart Doorbells can be hacked

25 | Instagram Users vulnerable to phishing scam Microsoft annual Report show Phishing attacks up

29 | NIBSS Fraud Report Fraud Landscape in Nigeria 2018

Cover

Next Generation of Digital | 14 Innovation

Interview: 36 | Trends & Tactics China to Surpasses U.S in Data Generation by 2025.

Apple, Goldman Sachs brings credit card and iPhone CollaboVirtual human' technology teaches employees softs skills.

Samsung to launch a wearable smartshirt.

37 | InShort Facebook to Advance AI by Creating Its Own Chips FedEx to test Autonomous Bots for Delivery Das smart keyboard aids

Oluwatobi Boshoro, Renmoney CEO, on Making Financial Inclusion Count in Digitàl Lending | 19 Space

38 | The Gimlet Eye A Look at the EdTech Landscape: The World's Biggest Opportunity

E-PAYMENT REVIEW (ISSN: 2360-9818) is published every quarter by the E-Payment Providers Association of Nigeria, 1 Rachael Nwangwu Close, Lekki Phase 1, Lagos. © Vol. 09 No. 04. March 2019. All rights reserved. The opinions expressed do not necessarily reflect E-PPAN’s policy. E-PPAN accepts no responsibility for views expressed by contributors. Printed in Nigeria.

3 /E-PAYMENT REVIEW /MARCH 2019

TO OUR READERS

THE NEXT FRONTIER OF INNOVATION THIS EDITION OF THE E-PAYMENT REVIEW IS A VERY SPECIAL edition for me, because I had to sit on the editor's desk and put together an entire publication on my own without the help of my editor. Being the first time running sole, I had to put all my skills to work to ensure that your favourite magazine meets the standard that you are used to and I hope I did a good job of it.

In this edition we took a deep look at digital innovations and how it was influenced from one industrial revolution to the next. In the last few years, we have witnessed technological explosion and the use of these technologies has resulted in a phenomenal transformation of the financial world. The change in financial services is happening faster than ever before all thanks to technology. Businesses are taking advantage of the fourth industrial revolution to leverage on a range of nextgen technologies such as artificial intelligence(AI), the Internet of things (IoTs), big data analytics, virtual and augmented reality, voice, enhanced biometrics, robotics, quantum computing and blockchain to offer consumers new ways to deal with their daily financial journey in a simpler, convenient and faster way. Now more than ever, robotics and AI are being used to reduce cost and mitigate risks as well as other functions such as emotional intelligences, logical reasoning, navigation, pattern identification, language processing and lots more. As time goes on, more technological and advance uses of these technologies are going to impact other sectors like capital markets, insurance and wealth management in a big way.

Now, putting the customer at the centre of all activities in the world of payments, both banks and new players are beginning to realize the role of cutting-edge technologies as a competitive edge to upend new players and offer financial services in a contextualized environment. Customers will always need banking services but may not necessarily turn to banks to fulfil their needs. We are already seeing technology integrations such as artificial intelligence and big data analytics prevalent in providing financial institutions insights on the kind of personalized services the customer craves and how they deliver it exquisitely One of the major cravings of customers today is access to finance. We interviewed the MD of Renmoney who shares with us how by applying innovation, they have grown their business and do you know the implication of that? More people who approach them can get access to credit for personal and business use. There is a direct correlation between access to credit and it impacts positively the economic growth of the nation. She also shares her thoughts on how organizations can strategically use technology solutions to improve the customer experience while charting a path for tomorrow. I advise you read through the interview and gain more insight into the world of credit and innovative strategies for businesses.

We also interviewed Joshua Chibueze, Cofounder of PiggyVest on how PiggyVest automates savings and instil discipline in the users of the app, the platform's expansion plans and what its new range of investments could means for millennials'. Finally, our cover gliding on the wings of the digital innovation takes us through the industrial revolutions, the prevalent innovations in the financial world right now and a call to action on what Organizations and Nigeria as a country can do to avoid playing catchup or being swept away by the next wave of technological change.

L-R Irene Netima, Company Secretary FirstBank; Folake AniMumuney, Group Head Marketing and Corporate Communications FirstBank; Dr. Adesola Adeduntan, CEO FirstBank; Rosie Ebe-Arthur, Group Head Human Capital Management and Development FirstBank ; Oluwatoyin Akinwuntan, Group Head , CBG (Energy) FirstBank at the launch of First Women Network.

L-R: Executive Director, Commercial Banking, Ecobank Nigeria, Mrs Carol Oyedeji; First Vice President, Chartered Institute of Bankers of Nigeria (CIBN), Mr. Bayo Olugbemi; Managing Director, Ecobank Nigeria, Mr. Patrick Akinwuntan; President / Chairman Of Council, CIBN, Dr. Uche Olowu; Registrar /CEO, CIBN, Mr. Seye Awojobi, Executive Director, Corporate Bank, Ecobank Nigeria, Mr. Akin Dada and Member Governing Council, CIBN, Mr. AbdulRahman Yinusa, during CIBN stakeholders’ engagement with Ecobank Nigeria in Lagos.

174,012,136

Number of active subscribers on the telecommunication networks as at January 2019, as against 172,871,094 recorded in December 2018, according to the Nigerian Communications Commission (NCC). The data also show that, 173,625,306 of the 174,012,136 active numbers subscribe to the Global System for Mobile Communications (GSM) network services.

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4 /E-PAYMENT REVIEW /MARCH 2019

11 QUESTIONS

Charles Uduje: The Chief Operating Officer of Itex on how Itex is proactive and not reactive when it comes to innovation.

SHARE WITH US YOUR experience and how you came to this position?

I am the Chief Operating Officer Itex Integrated Services Limited. I hold a Bachelors' Degree in Electrical/ Electronic Engineering from the University of Benin and I have a career spanning over 12 years in the IT and epayment industry. I joined Itex many years ago as a young budding engineer with big dreams. At the time the epayment industry was just developing in Nigeria and held a lot of promises.

So let's just say I was happy to be part of the bandwagon spreading the good news of e-payment. I started at Itex as a technician (hardware and software configuration) and after various training both in-country and out of the country and managing some key responsibilities, I was promoted to the role of Head of Operations, managing the PTSP operations. Having managed that department for a few years effectively, I was made head of Business Development and Marketing. I rose through the ranks and in 2016, I was promoted to the position of Chief Operating Officer. In my current role, I manage overall operations of the organization ensuring optimal service delivery and customer satisfaction.

How would you explain your company's development and its vision?

Itex has set out to lead the Pan-African financial technology market in providing cutting-edge and secure electronic payment solutions. Our quality system provides a framework for measuring and improving our overall business performance, supporting our company strategy and business plan, facilitates continual improvement and ensures the fulfilment of our customers' requirements. We are very resilient, adaptive, dynamic and service driven.

Where does your drive come from?

What makes you wake up in the morning excited to do your job?

Doing a job that provides solutions and has large scale impact certainly motivates me to get going every day. Epayment has no doubt revolutionized the financial industry in Nigeria, leading to improvements that would have once been termed “white elephant dream”, being a part of this revolution makes me excited. Beyond this, my job brings me in contact with a broad range of stakeholders. The opportunity to interact with people, understand their needs and tailor solutions to meet these needs definitely makes my job worthwhile.

What makes your Organization a success? What are your strengths?

Our Staff are critical to our success

stakeholders. And ensuring there's follow-up progress so everyone is benefitting from the new technology security features, and no one is left behind.

story. We also believe that employees at all level are the essence of our organization and their full involvement enables their abilities to be used for mutual benefits. We also strive to develop products and services which result in superior customer satisfaction so as to achieve and sustain leadership in the industry.

How does your Organization keep up with changing technology trends?

Technology is an unavoidable and critical part of any business and ours isn't an exception. Over the years, we have ensured we are not reactive when it comes to the latest trends in technology rather, we are proactive.

During the cause of our business, we realised that Research and Development plays a very important role in the success of any business.

Therefore, we had set up a robust R&D unit where new products are constantly being researched and developed and existing products are being updated. We are also predictive such that from listening to customers' needs today, we can tell what they would want tomorrow.

We are very flexible, fast and adaptive such that even if we do not play a pioneering role we are quick to catch up. A concept for us is that of “Never Stop Learning”. The moment you stop learning and updating your knowledge, whether it is software development or any other category, you will start to regress because you won't keep up.

What technological trends do you see driving the e-payment industry in 2019?

Agent banking and Fintech services would greatly drive the industry in 2019 and beyond. The coming of Fintech services tends to have quickened the rather slow evolution as it were in the e-payment space.

Fintechs have taken e-payment technology a notch above the usual by introducing various cutting-edge payment solutions. Now we have Mobile payment solutions, digital payment solutions (QR codes, USSD etc.), biometric solution, social media/network payments e.g.

Chatpay (the likes of WeChat and Alipay), NFC, web aggregation and a host of others. Agent banking services avail in almost all services originally limited to the traditional financial institutions. It is predicted that agency services will take over traditional PTSP business.

Most companies are gearing towards digital transformations and increased technological adoption. How can we secure the payment space?

Digital transformation is gathering pace across the world, disrupting value chains and transcending the traditional ways of conducting businesses and the pace in the increase of technological adoption.

We can secure the payment space by building secure applications with the use of code reviews, unit testing and penetration testing: Innovative and user-friendly cyber security training programs for stakeholders: Constant Monitoring after new payment technology has been introduced: Implementing Payment Card Industry Data Security Standards (PCI DSS): Question-and-answer forums about the new payment technology from

6 /E-PAYMENT REVIEW /MARCH 2019

In your opinion, which is more important to have leadership or sound managerial skills and why?

In my view, sound leadership skills are more important than managerial skills.

Leaders own the dream, they inspire and motivate people towards a common purpose which is transforming the dream into reality. Leaders strive for a win-win situation for all by winning the hearts and minds of followers and connecting with people on a human level. Managers, on the other hand are concerned about creating goals, managing risks and driving business outcomes, mostly by veto. While this is not bad, it has the potential of achieving only short-term results and creating disgruntled employees, hence, I think managers must also be good leaders to drive sustainability for their businesses and maintain a loyal and motivated workforce who can grow the business.

What kind of activities do you enjoy the most when you are not at work?

I spend time with family and friends, research on new things whether related to my work or not, I love knowing a bit about everything. I like fixing things myself (DIY). As an engineer, I would say I am a bit too hands-on fixing stuffs, ranging from my car, generator, electrical equipment and gadgets in the house, wood works etc. I like having fun too – general work-life balance.

What is that thing that only a few people know about you?

I am a very compassionate person, though I put up a front so that people do not take advantage of it.

Let's say we are in 2035 and Itex is in the league of Google, Amazon, Facebook and Apple. What would you have done right to get there?

Two keywords- Innovation and simplification. Every forward-looking organisation in the e-payment or technology industry certainly needs to be one step ahead, as the challenge of today and the future require organisations to constantly re-invent their processes and drive changes that are not only suitable for today but for generations to come. This is only possible through innovation. Customers also want simpler and faster processes.

This is why at Itex we continue to work towards speed, simplicity and innovation and with quality in mind, so do not be surprised if we become world class players like the companies you have mentioned 10 years ahead of 2035.

Talking Points Remita, Verve partner to extend payment services.

REMITA, AN ELECTRONIC payment platform, partnered with Verve, a Pan-African financial technology brand, to create a seamless payment experiences by enabling millions of customers pay merchants via the Remita platform using their Verve card. The partnership will give customers using a Verve card or virtual token access to pay thousands of Remita merchants in a fast, convenient and secure manner from anywhere and at any time. Mike Ogbalu, Chief Executive Officer, Verve International said: “We continually seek out viable opportunities and partnerships that expand functional coverage of Verve's physical and digital tokens, and such

Digits

12 Million Customers who have activated the DO-NotDisturb sign to stop unsolicited messages from telecom companies in Nigeria according to NCC

N39.15 trillion

Recorded transaction value from selected banks sector data for fourth quarter (Q4) of 2018 across the country according to the National Bureau of Statistics (NBS)

80 million Number of young people to benefit from the growth of ecommerce in Africa by 2030 according to a recent report by MasterCard foundation in partnership with BFA.

125 YEARS ANNIVERSARY . L- R: Folake Ani-Mumuney, group head, marketing and corporate communications, First Bank; UK Eke, GMD FBN Holdings; Oba Otudeko, group chairman FBN Holdings; Ibukun Awosika, chairman board of directors, First Bank; and Adesola Adeduntan, CEO First Bank at an event celebrating 125th anniversary of being entrenched in Nigeria’s developing and delivering impeccable financial services.

DATA CONSUMPTION

RECORD FUNDING

5G to reach 30 million Subscribers by 2024

FinTechs Raised $39. 57B In VC Funding in 2018

5G IS EXPECTED TO REACH 30MILLION subscription to enhance mobile broadband in the Middle East and Africa (MEA) by 2024. This will make 5G the fastest generation of cellular technology, representing 2% of total subscription, according to latest MEA edition of the Ericsson (NASDAQ: ERIC) Mobility Report. Key factors driving 5G deployment include increased network capacity, low cost per gigabyte and new use case requirements with majority of the 5G subscription in the MEA are expected to come from GCC countries with advance ICT markets like Saudi Arabia, UAE and Qatar while South Africa will likely lead in Africa. From a mobile data traffic point of view, the region is globally the highest with nine times growth forecast (1.8 to 15.4 EB/month from 2018 to 2024). The MEA region telecom market is currently characterized by increased uptake of LTE and high usage of apps. Therefore, significant growth is expected in data consumption including large mobile broadband subscription addition.

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FINANCIAL TECHNOLOGY STARTUPS HAVE raised $39.57 billion in Venture funding globally in 2018, making a 120 percent increase from 2017. A report by CB Insights says the funding was raised via 1,707 deals from the 1,480 in 2017. The megadeal funding was driven by 52 deals that were bigger than $100 million and 35 percent of the total funding in 2018 was from the $14 billion investment by Ant Financial the payment affiliate of Alibaba, the Chinese eCommerce giant.

The U.S. stayed at the top of the chart with $11.89 billion in funding in 2018, with 659 investment deals. Asian FinTech saw the largest increase in the number of deals, with growth of 38 percent in 2018 and raised a record $22.65 billion from 516 deals, while Europe saw a decline in deals but an increase of funding to $3.53 billion, also a record.

On the whole, Venture Capital funding declined in the Q4 but higher than 2017 level the report showed.

CLIMATE BOND

Access bank to Issue first ever Standard Certified Corporate Green Bond in Africa.

ACCESS BANK PLC HAS CONCLUDED PLANS TO ISSUE CORPORATE GREEN BOND IN AFRICA WORTH n15 billion following the approval of its Book Build request by the Securities and Exchange Commission (SEC). Green bond is a bond reserved for climate and environmental projects. The bonds are asset-linked and backed by the issuer's balance sheet, and are also referred to as climate bonds. Access Bank has a B2 rating by Moody's and verified by PwC (UK) following certification by the Climate Bond Initiative as having met the Climate Bond Standards. The issue proceeds would be used to finance eligible green projects that meet the Climate Bonds Initiative (CBI) standards. “The Issue will serve as a turning point for Nigeria, attracting both domestic and international investors and will set the pace for other Nigerian corporates to raise green capital,” said Wigwe, CEO of Access bank.

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Stanbic IBTC, LBS partner on Capacity building for Agri-business SMEs

TALKING POINTS - Nigeria

Free WiFi for customers : L-R Group Head, Corporate Bank, United Bank for Africa (UBA) Plc, Akinyemi Muyiwa; Group Head, Online Digital Banking, UBA Plc, Austine Abolusoro; Country Director, Google Nigeria, Juliet Ehimuan-Chiazor; Executive Director/ Group COO, UBA Plc, Chukwuma Nweke; Group Head, Marketing, UBA Plc, Dupe Olusola; Head, NBU Partnerships SSA, Google Nigeria, Saidu Abdullahi; and Group Executive, Digital & Consumer Banking, UBA Plc, Anant Rao, at the launch of Google Station, a Collaboration between Google and UBA to provide free, high-speed Wi-Fi hotspots at UBA Business Offices for the use of customers and publics, starting with 11 UBA branches in Lagos, at the UBA Head Office.

STANBIC IBTC BANK PLC IS PARTNERING WITH the Enterprise Development Centre (EDC) of the Lagos Business School, to host a capacity building series tagged: 'Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS).' The move by the financial institution is in furtherance of its commitment to help stimulate and grow a strong and viable small and medium scale enterprises sector in Nigeria. The programme targets operators in agric businesses in the country and offers a wide array of banking solutions as well as funding, skills acquisition and other support to the SME sector.

The Agri-Business Small and Medium Enterprises Investment Scheme is an initiative of the Bankers' Committee to provide support to and complement the federal government's efforts at promoting Agribusinesses/Small and Medium Enterprises as a vehicle for sustainable economic development and employment generation. AGSMEIS initiative requires all deposit money banks to set aside five per cent of their annual profit after tax (PAT); and as of December 2017, about N26 billion had accrued from all deposit money banks for the scheme. The fund is domiciled with the Central Bank of Nigeria and applicants are expected to be trained and certified by any of the CBN approved Entrepreneurial Development Centres which include the Lagos Business School, House of Tara, Fate Foundation, Thrive Agric and others to access the loan.

FUNDING TeamApt Raises $5M funding, Acquire Switching License TEAMAPT A FINANCIAL TECHNOLOGY COMPANY HAS RAISED $5.5 MILLION IN CAPITAL IN A series a round led by Quantum Capital Partners. The software development company intends to expand its white label digital finance products and pivot to consumer finance with the launch of its AptPay banking app. Founded by Tosin Eniolorunda, TeamApt supplies financial and payment solutions to Nigeria's largest commercial banks — including Zenith, UBA, and ALAT. TeamApt, whose name is derivative of aptitude, bootstrapped its way to its Series A by generating revenue project to project working for Nigerian companies, according to CEO Eniolorunda. “To start, we closed a deal with Computer Warehouse Group to build a payment solution for them and that's how we started bootstrapping,” he said.

BROADBAND PENETRATION

MainOne, Facebook Bring Fiber Connectivity to more Nigerians MAINONE AND FACEBOOK ARE PARTNERING ON A METRO FIBER INFRASTRUCTURE PROJECT IN edo and ogun state inNigeria. The project of approximately 750 km terrestrial fiber infrastructure will provide fibre connectivity to reach more than 1,000,000 people in Benin City, Abeokuta, Sagamu and 10 other towns by connecting mobile operators' base stations, Internet Service Providers, Points of Presence (POPs), and public locations including schools and hospitals. The infrastructure project is part of Facebook's efforts to connect more people to broadband internet leveraging on MainOne's Telecoms Infrastructure service including local regulatory and state authorities' support to further deepen broadband penetration in Nigeria. Commenting on the partnership, Funke Opeke, MainOne's Chief Executive Officer said “MainOne has always been committed to broadband innovation, job creation, as well as growing the digital economy of West Africa. “We believe that this partnership and the openaccess network we have developed will be beneficial to improving the quality of access and accelerating the digital transformation in Ogun and Edo States.”

IN SHORT Germany has by far the largest current account surplus in three consecutive years with 294 billion dollars in 2018. The second is Japan with 173 dollars while Russia comes third with 116 billion dollars the Ifo figures showed.

UBA has formally opened its United Kingdom subsidiary in London, three weeks after expanding its operations in Mali.

The launch was sequel to the authorisation of the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) for UBA UK Limited to carry out full scale wholesale banking across the United Kingdom. This latest expansion consolidates UBA's position as the first and only Sub-Saharan African financial institution with banking operations in the United Kingdom

NUMBERS Ecobank brings Ecobankpay to Alaba Market MANAGING DIRECTOR, ECOBANK NIGERIA, Patrick Akinwuntan, deepens financial inclusion, launched EcobankPay zone to make payment easy and convenient for customers via MasterPass, mVISA and mCASH from any phone by scanning QR code or using USSD at the 40th anniversary of Alaba International Market, Lagos.

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47 million Dormant bank accounts in the Nigeria rose by 28 percent from 36.7million in 2017 to 46.7 million in 2018 as a result of multiple accounts by customers, BVN issues, incomplete documentation and fraud statistics from NIBSS

TALKING POINTS - Africa

TymeBank records R10m Transactions on Day 1 of going Live TYMEBANK, ONE OF SOUTH AFRICA'S DIGITAL BANKS has recorded R10M of transactions on day one of going live.

TymeBank sees itself as 'SA's first digital bank' and aims to disrupt the industry with `simple, accessible and affordable banking'. The bank which had a soft launch in November last year, already has 80 000 customers. Owned by African Rainbow Capital (ARC), a company within business mogul Patrice Motsepe's Ubuntu-Botho Investments stable, making it SA's first majority black-owned bank. ARC bought the business from the Commonwealth Bank of Australia in November 2018. The bank already has over 500 kiosks in the market. Once it completes its rollout, there will be approximately 730 TymeBank points of presence, where customers can open accounts, and over 10 000 till points across 1, 500 stores, where customers can withdraw and deposit money. Customers can open a fully FICAcompliant bank account and receive their personalised Visa debit card at a TymeBank kiosk in less than five minutes, or they can open an account with limited functionality on the TymeBank Web site. South African retail banking industry is set for a shake-up this year with these digital banks Zero, Tymebank and Discovery Bank playing in the space.

Express Minds Launches First Bitcoin ATM in Botswana Express Minds Limited a local crypto company just launched the first Bitcoin Automated Teller Machine (BATMs) in Botswana. Though Africa currently has not adopted virtual currency much, Express Minds is looking into the future and expects the use of virtual currencies to pick up soon. So far, consumers in Botswana that has an interest in using cryptos usually fly to their neighbouring countries in Africa to buy cryptos. This demand and need for convenience in cryptos necessitated Express Minds ltd to take the bold step. The company intends to avail 12,000 bitcoin ATM to give convenience to the citizens of the country. Daily transaction volume limit is around $5,000 or 50,000 BWP. As explained, the company plans to place the machine in the center of the city market in Gaborone– to give attention to the virtual currency. Once the transfer is completed, this will be the 10th BATM in the whole continent of Africa. Goabaone Brose Watlala, Director of Express Minds, said he still believes that the automated machine is the only solution and the answer towards crypto adoption in Africa. Since the country has still no regulations regarding cryptocurrencies, the chance of Botswana's advancement in virtual money can still be considered.

SWITCHNG Sierra Leone collects $12m Loan to Build National Payment Switch The Sierra Leone Minister of Finance and the World Bank Group (WBG) has signed a concessional loan of US$12 million to build a national payment switch. This project is expected to develop and expand on modern financial services to the formal as well as the non-formal sectors of the economy especially thorough automation and electronic forms of intermediation. Once completed, a national switch system will ensure that the systems of all commercial banks in the country are integrated and customers can withdraw or make deposits from/into their accounts irrespective of the bank their account is domiciled. On the whole, it will lead to decrease in the amount of physical cash usage in the country and see an increase in installations of point of sales systems in retail stores and supermarkets across the country.

World Bank Country Director for Ghana, Sierra Leone and Liberia Henry Godfrey Rupiny Kerali said that the signing marks a very important preparation in the implementation of the project as financial inclusion in Sierra Leone is actually lower than the average in

SAFARICOM SIGNS DEAL TO PAY WITH M-PESA ON ALI EXPRESS SITE SAFARICOM HAS SECURED A deal that allows customers to pay for online shopping on Aliexpress.com site. The deal with Ant Financial, an affiliate of Alibaba, will have M-Pesa as one of the payment options with transactions denominated in Kenyan shillings, Safaricom said in a press release. “The move especially targets micro traders in the country who source goods and other supplies from manufacturers in China,” Safaricom said in a statement. Safaricom, Kenya's largest operator that is partly owned

by South Africa's Vodacom and Britain's Vodafone, said the deal was part of an effort to transform M-Pesa into a global payments platform. MPesa has become a major profit driver for Safaricom. M-Pesa was launched more than a decade ago to offer Kenyans without bank accounts a network to transfer cash via mobile phone. Other services include payment services, loans and savings to more than 21 million people in Kenya. Safaricom has 30 million subscribers or 65 percent of cell phone users.

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Appointments

Ronke Kuye The Bankers' Committee has appointed Ronke Kuye, as the first CEO of Shared Agent Network Expansion Facility (SANEF), an initiative of the CBN to accelerate financial inclusion in Nigeria.

Until June 2014, Kuye was the former General Manager in Guaranty Trust Bank as head of the transaction services division. Prior to this, she was responsible for the e-business and card services where she set up a successful card business and alternative channels of payment. Kuye's notable achievements include the launching of the first Naira denominated MasterCard (accepted worldwide) in Nigeria, the first MasterCard World card in Africa, the first pin-pad devices used for pay and receive in bank branches and setting up of a successful Centralised Processing Centre (CPC) in GTBank.

Esaie Diei Enhancing Financial Innovation and Access, (EFInA) has appointed Esaie Diei as its Chief Executive Officer. Prior to his appointment in January, Diei was CEO, MoneyMaster Limited, a Globacom subsidiary focused on digital financial business. He has occupied various positions such as Group Head, Mobile Financial Business, Group Head, Prepaid Card, UBA and Head, Card & Payments, UBA. He is an alumnus of ESCA (Ecole Superieure de commerce d'Abidjan), a highly rated Business School in Cote d'Ivoire in partnership with the University of Brighton (United Kingdom).

Startup Nation

Instilling discipline for savings The Co-founder and Chief Marketing Officer of PiggyVest, Joshua Chibueze talks on automating savings for millennials and enabling them to better manage their finances.

BY LUCY AKOKOTU LET'S MEET YOU. WHAT IS YOUR educational background?

My name is Joshua Chibueze, a Co-founder of PiggyVest. I graduated from Covenant University in 2012 where I studied Computer Science. Right after school, we started building products for banks and oil companies. At the time, we started as a tech firm until PiggyVest (formerly Piggybank) came on-board in 2006, so it's been pretty much software for me and my team from when we left school till now.

How do you introduce PiggyVest to someone that you are meeting for the first time?

I will say PiggyVest basically helps you manage your money effectively. Before PiggyVest, when you put money in savings, it's easy to access the funds with an Atm card but with PiggyVest there are restrictions on how you can access the funds and this automatically discipline you to save and invest better. Sometime in December, 2015, there was a story that went viral about how someone was able to save N350, 000 from putting aside 1000 naira daily in a box. This particular story happened in 2015 but I think every year, this type of story trends. We saw that trend at the time and decided to do something, which is how PiggyVest formerly PiggyBank was born. We started as a simple platform that allows you to save daily then moved into weekly and monthly savings.

Now we have morphed into various savings and investments and we recently changed the name from PiggyBank to PiggyVest. Our features include PiggyBank savings which is a periodic savings. You can set aside N500 naira daily, weekly or even monthly and then you can only withdraw once every quarter. If you try to withdraw outside those set days, you attract a 5% early withdrawal fee on what you want to withdraw. The whole idea is trying to get you to save for at least three months and not touch it. The second plan is called Target savings. You save on target and when you meet your target, you withdraw.

The minimum on that is 30 days and you can even lock it. Let's say you have a savings you don't want to touch for the next one month, you can use the target savings and the interest rate is 10%. Then we have the investment feature called SafeLock. SafeLock currently gets you 13 percent per annum. We invest in government securities at a premium and because we invest in bulk we

Joshua Chibueze

Co-founder and Chief Marketing Officer of PiggyVest are able to afford this high interest rate for our users. Then we have the Group Savings, which is like the automatic ajo.

Just think about it like in an office, everyone is trying to save towards traveling to Kenya in August, you can set up an account and invite your friends or colleagues to the group so they can also save towards the target, once the date expires, everyone can collect their money and travel to Kenya. Ajo has always existed, what we did was to use technology to automate and implementing the process for millennia's who are now mobile first and internet savvy. In the past the major problem with ajo is trust. You give someone your money in cash at the end of the day, they may decide not to give you back your money or tell you a story because there is no evidence to prove you gave such money.

With this, everyone sees their money in the system and no one has access to your money 12 /E-PAYMENT REVIEW /MARCH 2019

except you. That's the concept we are able to augment. We also introduced a new feature called track it- an expense tracker. It even sends a daily reminder for you to track your expenses. Those are most of our features and there is a whole lot more to come.

What new services should we expect to see right now and in the near future?

We are morphing into a more holistic platform not just for savings but offering more investments. We are looking at other opportunities like SMEs, agriculture, mutual funds, real estate, dollar bonds and other forms of investments that millennia's will like to take advantage of. We are going to be working with already established investments partners to achieve this.

Are any of these investments you mentioned operational right now?

We already have an investment feature which is Fixed income asset that gives you 13% interest and a lot of people are already using it. In the next couple of months, there will be a lot more in operation.

Do you charge users a services fee?

Like I explained earlier, when we invest, we do that in bulk through which we are able to earn significantly more. For instance, if we invest N200million in a primary market, we will earn like 15-16 percent on that money from which we can give our users 10%. So we invest at a premium rate in bulk, earn more and make some money for our users. That's our primary source of income.

The competition is getting stiffer and there are a number of banks and fintech firms that offer similar saving services, what is the competitive edge that sets yours apart?

Well, we have first mover advantage. We are the first company that introduced savings online. We started in 2016 and basically taught the market what to do.

There is also the fact that we are completely transparent. There are tiny details about earnings that a bank might probably not show you, but we are able to articulate how much you are earning daily. Then, the discipline part is what no other person is doing very well. We focus more on savings because the truth is that it is not easy to save. In the past, we either used a ''kolo'' or give the money to our mum. For mum, they won't give you back while putting it in a ''kolo'' is counterproductive because at the end of the day, you either use a spoon or you use a broom to bring out the money. The discipline there is, I don't want to use this money for this amount of days, can you do that for me? If I say give me this money before that time, don't give me. That is the exact service that we provide.

People are scared of losing their savings and will rather save with financial institutions that are less likely to abscond with their money. Have you found a way to connect your services to other “trusted brands” that consumers interact with regularly?

Let me reiterate that we will be about three years old this year. Initially, we partnered with microfinance firms to offer these services, operating as a product of those microfinance banks. After we raised 1.1million dollars funding from both local and international investors in 2018, we acquired a microfinance bank and its licences. Added to that, we also acquired a duly registered cooperative license for Lagos. More importantly, all our funds are

warehoused with and managed by AIICO Capital.

What if someone decides to abscond with the funds?

That is not possible. I mean there is a cooperate governance in place and we do not even have access to the funds. From our payment processor, the money goes straight to where our funds are warehoused.

How many users do you have and what are you doing to scale?

Currently, we have over 200,000 registered users with about 40-45% of them active every month and saving over a billion naira every month.How we plan to scale is by doing more education. A lot of people have heard of Piggy Vest but they don't know what it is or how it works so we have to be out there. We are creating tutorials on the app so that once you sign up, you are able to understand the platform from the word-go. We aren't doing much traditional marketing but what we are doing is smart marketing. We understand our users and the best way is to find the right channels and teach them what to do. Online savings is petty new and people aren't used to it yet. On the whole, it will take a lot of financial education to get the word out there.

What advice will you give to someone who wants to come to the same space?

I'd say be true to what you are doing and don't oversell your value proposition. Lots of companies oversell their services and don't meet up to expectation. That is the first and most important one. Secondly, having a great team is literally a lifesaver.

Choosing the right business partners that you can trust is key. Thirdly, be accountable to your investors (if you have one).

It's very easy to lose investors confidences.

Investors know that things will not always be rosy so keep them in the loop. If they see how well you deal with the little things, in time they will trust you with bigger things. Fourthly, this space is extremely hard. We rely on banking infrastructure that is not 100 percent efficient. For instance, a customer makes a withdrawal, we have processed on our end but it doesn't reflect on the customer's account and they begin to feel that this is a

scam when it is possible at that time the banking process may have been down. We encounter these challenges, so you have to communicate with the customer.

How do you see the company evolving in the next 5-10 years?You know how you want to watch TV you get a DSTV, it will be the same way when you want to handle your money, you think PiggyVest. I see us evolving even using AI and machine learning for financial advisory, giving you a monthly report on how you spent your money this month or helping you think how you can earn better with your finances. There are a lot of things we have to go through and it's not going to be easy but we will get there. We have the tech and our tech team is very solid. We launched a new app last year and by the end of the year, we were number one in terms of finance in Nigeria. So, in the next 5 years, I see Piggy Vest as a household name with millions of users, helping them to invest their savings. Basically having a big impact on how millennial save and do better with their money.

What technologies do you see redefining the payments space?

The payment space needs a lot of disruption and I like the newly introduced PSB licenses. I see a lot of opportunities for the grassroots to become part of the financial system.

The major challenge for the grassroots is accessto credit. If they are included in the system, they can get a good rating to access credit and the economy is better off. For AI and machine learning, they are a means to an end. I'd like to see a central wallet system like Mpesa that will include everybody in Nigeria and be able to keep track of the entire money flowing in the system. I think is going to be the game changer though not many people share this school of thought. Secondly, we need to organize our identity in Nigeria; it will help payments a whole lot as BVN is getting out-dated. You may have moved houses two or three times or even change your phone number and the banks don't have the current information. If someone does something on the road and I can track that person, then that is progress. Aboard there is law and order because you can identify everybody. So, Identity and a central wallet would be the game changer.

AJO HAS ALWAYS EXISTED, WHAT WE DID WAS TO USE TECHNOLOGY TO AUTOMATE AND IMPLEMENTING THE PROCESS FOR MILLENNIAS. 13 /E-PAYMENT REVIEW /MARCH 2019

Cover

NEXT GENERATION OF DIGITAL INNOVATIONS

BY AYODEJI OLONODE

Innovation is a critical precursor to growth in different facet of human endeavour, ranging from commonplace necessities like nutrition to more engaging and transactional ventures like business. In the increasingly competitive world we live in today, innovation proves to be the mainstay for any entity desiring to stay ahead of competition beyond mere words or wishful thinking. As the pace of proceedings increases across the world and social derivatives become more complex, technological revolution is sensationally disrupting the way we live and manage our social obligations and expectations.

Disruptions in this regard take the form of assistive technologies, powered by the internet.

Today, digital innovation is at the heart of services and deliverables across organizations. The digitization of internal

operations and processes in organizations is of great imperativeness because of the need to do things better, faster, and cheaper; find new ways to engage users and bring new products and services to market. As competition mounts across industries, there is need for a faster path to transform innovative ideas into winning applications.

By leveraging opportunities to develop digital products, and using predictive data analytics to better understand customers' behaviour and internal performance, businesses can grow revenue, cut costs and even build additional revenue streams with new digital capabilities.

Ontologically, digital innovation has glided on the strength of three significant waves, with the first wave spanning through the 1980s and 90s and characterised by personal computing. The second wave spanned through the year 2000 till 2018 and was 14 /E-PAYMENT REVIEW /MARCH 2019

characterised by innovative business models which crystalized such concepts as cybersecurity, e-commerce, workflow automation, social media analytics, and the likes. The third wave, which has been identified in some quarters as the fourth industrial revolution, is what we regard as the next generation of digital innovation.

The fourth industrial revolution refers to the increasing integration of digital systems, networked communications, machine learning and large-scale data analysis, into business operations and processes in order to make them more efficient and selfsustaining. The current pace of technological development is exerting profound changes in the way people live and work. It is impacting all disciplines, economies and industries, including how, what, why, when and where individuals produce and deliver products and services.

build a pyramid of cynicism in the minds of customers at the midpoint of the second wave of digital innovation. However, with the advent of big data analytics, customers can rest in the assurance that even if, for example, an unauthorized person tries to initiate an electronic payment on his/her account from a different location, his bank might be able to use location tracking application to recognize that the customer is initiating a transaction from a different location, and therefore either block the transaction directly or send a direct mail to the customer for further verification. This is a very typical example of how digital innovation could come handy in risk management, especially in the financial sector where operational risks are on the high side.

A closer look at some of these innovations and their effects on the country's financial sector brings observers to a close discovery of a significant improvement in operations and service delivery over the past decade. One digital innovation that exists today as a framework for the next generation is the Internet of Things (IoT). Internet of Things is driven by a combination of forces, including the exponential growth of smart devices, a confluence of low-cost technologies (sensors, wireless networks, big data and computing power), pervasive connectivity and massive volumes of data. It is a digital innovation that allows users to automate their routine operations by networking all physical, tangible devices through the aid of a sensor or software as the case may be. Internet of Things is already heralding transformation across industries, and experts and solution providers have submitted that it will bring about even more significant changes in the coming years, which falls within the purview of the next generation the financial sector, some of the gadgets that have revolutionized the industry include banking applications on smartphones, digital assistants, finance tracking applications and contactless payment desks, etc. The proliferation of smartphones and other hand-held devices by users has amplified the use of Internet of Things, which in turn empowers the innovation and change the manner of business operations.

In a study on the growing mobile technology, as reported by Tusher Vijay of Konstant Infosolutions, a section describes the impact of Internet of Things as a growing phenomenon in the banking sector especially. The vital figures include the fact that 64.5% of worldwide banking officials monitored their clients through portable applications on smartphones, tablets and other advanced gadgets. While the figures are not ascertainable in the Nigerian banking sector because of the paucity of empirical research in that field, ethnography of proceedings provide sufficient evidence of how smartphones and other portable devices have offered timely assistant to customers through the Internet of Things.

With the advent of the Internet of Things, a number of financial or economic related concepts have also gained prominence. One of such concepts or new field in the financial sector is FinTech (financial technology), which basically describes how organizations deploy technology to birth innovations in the financial services ecosystem. FinTech generally aims to attract customers with products and services that are more userfriendly, efficient, transparent, and more automated than what obtains. FinTech operates in segments, but the more visible and easily relatable segment in the Nigerian environment would be the other alternative payment systems, different from the familiar banknotes, cheques and internet banking, that the technology has offered financial institutions and their customers. The vibrancy of this segment in the Nigerian environment is of course made possible by the obvious cause of Nigeria being colossally a cash-based society, which is gradually been put under check courtesy of the demand for cashless society by the Central Bank of Nigeria. From the year 2017, the country has witnessed a convergence of financial services with telecommunication operations, such that with just the fusion of a bank's approved code and recipient's details, transactions could be completed in real-time without necessarily having internet connection. This innovation, as modern as it actually is, provides a rope-a-dope for some constituents of the Generation X who are yet to be brought to speed with internet operability.

“ONE DIGITAL INNOVATION THAT EXISTS TODAY AS A FRAMEWORK FOR THE NEXT GENERATION IS THE INTERNET OF THINGS (IOT).�

Let's take a closer look at another digital innovation - Big Data. It has proven to be a giant stride towards the development of the financial sector, with numerous verifiable advantages splattered across the bank and financial homes in the country. Big data has afforded financial institutions the opportunity to use customers' information to monitor their transaction behavior in real time, which by implication provides necessities for the security of customers' funds. This affordance has been used in recent times to detect scams and unauthorized transaction attempts on customers' accounts, for which customers have had to be prompted to thwart such transactions through certain actions.

Customers' experiences over the years have exposed the volatility of the electronic payment system, which had begun to 15 /E-PAYMENT REVIEW /MARCH 2019

Talking about monitoring of transaction behavior of customers, big data also allows financial institutions to monitor customers' spending and ensure that they do not overshoot their daily or weekly limits as the case may be. Similarly, financial institutions become positioned to provide relevant information that meets the needs of customers per time because of the depth of information about customers that are at their disposal. These benefits of big data put the phenomenon on a pedestal that derivatives of the older wave of innovation (like small scale database management systems) cannot operate from because of the increasing volume of information Institutions have to process. So, it is safe to conclude that if financial institutions do not embrace big data (heading into the new wave), they will experience a low competitive advantage in providing customer-centric solutions amongst the comity of service providers.

How about targeted marketing campaigns?

Of course, big data has given lots of customers away in this regard. For customers subscribed to internet banking and card transactions, it is all a matter of analyzing their transaction pattern over a period of time, and voila! The system is able to predict lifestyle, commonly accessed services and routine expenditures, etc.

The finance sector has built a reputation over the years as the pacesetters when it comes to the issue of deploying technology to address critical business challenges. Banks and other financial institutions have always managed to make the most of technology to improve their efficiency and the service provided to their customers. From the foregoing and of course from several other evidences, it would be no gainsaying to submit that big data's adoption in banking and financial management affords a holistic analysis of customer information which portends the innovation of providing omnichannel solutions to address customers' needs. Big data processes this ever-growing volume of data and make them accessible when required, and as well actionable in proffering customer-centric solutions.

Against this backdrop, it is envisioned that the use of big data will become a key basis of competition and growth for businesses in

Cover

11.7 Billion Blockchain market value by 2022 from 1.5 billion in 2018. The financial sector accounted for $552M (over 60 percent) of blockchain use worldwide in 2018 according to Statistic

49 percent

Consumers who are willing to shop more frequently when AI is present while 34 percent will spend more money according to AI Trends.

other industries and sectors aside from the financial sector, in the new generation. It is projected that both established competitorsand even new entrants will leverage big data analytics to float innovations, to compete and extract as much value as affordable from real-time information accessible to them. By the time the firms from other industries are striving to play the catchup, financial institutions would have upscaled in business intelligence using big data, by driving increased demand for algorithms to process data while also minimizing the impact of the challenges around data security and access control on the extant system.

Machine learning, a fundamental subset of artificial intelligence, explains the ability of the computer to adopt a pattern (learn) of behavior online without necessarily being programmed to do so. This innovation thrives on the ability of the computer to recognize patterns and behaviors by learning from experiences. It is used, especially in artificial intelligence, towards solving a problem with little or no human intervention or interference. Machine learning is also proving critical in enhancing innovativeness in business operations and economic activities across different sectors and industries today. A good example is its application at Dubai airport - where machine learning is building the airport of the future.

Dubai is using advanced machine learning techniques, powered by Splunk's Enterprise platform, to transform the airport experience from start to finish.

An H2O.ai report opines that Artificial Intelligence and Machine Learning is particularly useful in financial service because myriad benefits are derivable from it, which continues to grow on a daily basis.

Notable examples of its deployment are in the Anti-Money Laundering campaign, where techniques such as behavioral modeling and customer segmentation are used to discover transaction behaviors with a view to identifying behavioral patterns of entities and outlier behaviors that detect potential laundering. Experts have submitted that this innovation is more reliable in anti-money laundering campaign than the traditional monitoring system.

1.8 million

Number of jobs AI use will eliminate while 2.3 million will be created by 2020 according to Venture Harbour projects

Amount businesses will cut in cost using Chatbots by 2022 according to forecasts by Impact bond.

These same techniques apply to fraud detection in the financial institutions, especially in an era where the volume of payments is constantly increasing because of affordances like mobile wallets and other applications afforded by the Internet of Things.

Also, Artificial Intelligence and machine learning have proven critical in redefining customers' experience through services like the virtual help desk and conversational interfaces based on their unique needs. The year 2018 especially witnessed the proliferation of Chatbots which are being used for providing a 24/7 virtual experience or banks customers. From UBA's Leo, to Diamond Bank's Ada, Heritage Bank's Octopus, Keystone Bank's Oxygen, Access Bank's Tamara, Ecobank's Rakfiki, etc.

Chatbots have provided a form of real-time engagement and conversational experience for customers. Chatbots are beginning to prove to be the “go-to� platform for services such as account balance check, transaction history, feedback management aided through assimilation of service literature that affords the machine the tact to respond to inquiries and frequently asked questions.

They provide guidance on account opening, account management issues, how to pay certain bills and set up recurring bills, etc.

They work through existing messaging platforms such as SMS messaging, Whatsapp, Facebook messenger and other mobile applications that characterize customers' daily user experience.

By offering an Omnichannel platform for banking activities and financial insights, financial institutions are better positioned to attract and retain millennial customers (Generation Z), who were either born with tablets in their hands or grew up to communicate with messaging apps. Of course, the technology behind the overall working of the Chatbots has enough appealing power to charm their inquisitiveness and engage them reasonably.

The benefit of this to the financial institution is increased access to the millennial market which assures of unprecedented growth in the new generation. Global analyst firm, Gartner, estimates that customers will manage 85 percent of their relationships 16 /E-PAYMENT REVIEW /MARCH 2019

$8 billion

Digital Assistants $15.79 billion Digital voice assistants market growth by 2021 from $5.21 billion in 2018.

with an enterprise without interacting with a human by the year 2020, thanks to Artificial Intelligence powered Chatbots.

Going by these developments over the years, digital innovation will continue to automate processes and make operations in various sectors or industries seamless. These will, however, curb inefficiencies, reduce costs, improve production and as well minimize waiting time in various industries and sectors. The latest wave of digital innovation will now revolutionise traditional industries just like past waves of innovation have reshaped industries and sectors like finance, information and media. Predominantly, the finance sector has been a front-burner with respect to the deployment of Information Technology and digital innovations in businesses. The mystery behind the development of this sector over the years lies in the adoption of digital innovations for birthing improved services such as mobile and internet banking. Also, the deployment of various products and services by the new entrant also called FinTechs has reduced the extent to which physical cash is handled, thus handing us a glimmer of hope for a successful cashless society and financial inclusion.

With these levels of impact on the financial industry, the future guarantees a reduction in the use of cash for business transactions to the barest minimum. The current digital innovation in the financial sector will also enable financial institutions and merchants to use data-driven customers' engagement platforms.

COMPANIES STILL OPERATING IN THE OLD PARADIGM MAY SPEND A BULK OF THE TIME PLAYING THE CATCHUP, WHEN THEY SHOULD BE GLIDING ON THE WINGS OF THE TECHNOLOGICAL WAVE; AND THE SAME FACT HOLDS TRUE FOR COUNTRIES.

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Machine Learning 225 percent

Machine Learning 89 percent

Amazon's machine learning algorithm has successfully decreased the “click-to-ship” time according to Forbes.

Accurate detection of breast cancer by Google's Deep Learning machine compared to just 73 percent accuracy from a human pathologist from Health IT Analytic.

As more payment solutions allow customers to link their bank accounts for direct payment and seamless point-of-sale vendor financing, the use of credit cards could be displaced by digital platforms. Customers may lose visibility into their payment choices, increasing their default cards' share of wallet and reducing the importance of some traditional differentiators like brand and design.

In a nutshell, the banking and financial sector has undergone radical changes and improvements in the last few years and is in a constant state of development. Clearly, financial institutions have started to rethink how they interact with millennials and Generation Z customers, as evidenced by the recent shift from branch banking to branchless banking. Digital innovations have brought the banking industry new business models, development concepts and areas of improvements, from internet banking to monetary transactions. With the new age of digital innovation in the banking sector, the daily operations are becoming faster, cheaper and easier for customers to use and therefore most banks are grasping to adjust their own operations to fit the needs of a demanding customer. Evidence abound in our environment, as there is hardly a commercial bank in the Nigeria of today that has not adopted one digital innovation or the other to improve its operations.

Also, ecommerce will receive a boost as digital innovation breeds a digital economy, which is essentially a new economy stream that brings with it new momentum. As technologies develop rapidly and become integrated into more verticals, the digital economy is becoming the fastest growing, most innovative and widest-reaching economy. Unleashing the potential of economic development, it drives the transformation of traditional industries, fuels sustainable economic development, improves social management and services, and fosters innovation. Accenture forecasts

12.5 percent An person's average working week, or the equivalent of 11 days' a year, lost in data collection as estimated

by Statwolf.

Autonomous Vehicle $6 billion Growth of global autonomous vehicle market in 2025 according to Statista.

that optimising the use of digital skills and technologies could generate $2tn of additional global economic output by 2020.

The study also revealed the vast role digital technologies play in economic activity, with more than one-fifth of the world's GDP attributable to digital skills, capital, goods and services. Nigeria, no doubt, is one of Africa's most promising nations. With over 190 million people, this country remains the largest mobile market on the continent. Over the years, the country has witnessed a surge in and growth of e-commerce businesses, an increase in small and large scale enterprises, not to mention a ton of mobile-based services that meet a wide range of needs for people every day.

The further popularisation of businessdriven technologies – such as those already highlighted and briefly explained in this article – is putting pressure on companies and businesses in different sectors to fundamentally rethink operating models, business models and executive roles, regardless of industry or geographical location.

The next generation of digital innovation demands the attention of Nigeria now more than ever before. Evidences abound across the globe that developed countries and leading businesses and multinationals are already reaping the productivity benefits of digital innovation, and Nigerian businesses across different industries must embrace the kinds of digital innovation that will position them for catchup with global leaders.

Anything short of this, businesses and the country as a whole may continue to fall behind in economic terms.

However, in the new generation, there is proposed to be a broader economic imperative because the core technologies (some of which have been mentioned above) will find real expression by revolutionising the traditional transactional processes, thus birthing greater productivity in sectors where digital innovations are already calling the shot, while inspiring growth on new turfs.

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Robotic Process

Automation market was worth $250 million back in 2016, but is projected to grow to $2.1 billion by 2021 according to Forrester report.

Beyond its adoption and application in the financial sector, which we noted earlier as being the pace-setting sector when it comes to the issue of deploying technology to address critical business challenges, there is need for a holistic adoption of digital innovations by other industries and sectors towards having greater social implication or relevance. The starting point therefore, will be to learn about the potentials of the next generation digital innovation and the implications (in terms of value propositions and investment requirements) of the adoption of the technologies to businesses and social system at large. The onus rests on the shoulders of the government of the Federal Republic of Nigeria to support platforms that educate the next generation policy makers, entrepreneurs, technologists and other role players in the country's business ecosystem on ways of integrating In this world where technology serves as a basic facilitator, and consumers run away from complexity, organisations and businesses that desire to succeed or accomplish their goals in the new generation must come to a realisation that they have to change their business model. A satisfactory customer experience means getting their problems solved in real time through convenient channels such as the Chatbots, Artificial Intelligence and Machine Learning platforms. The implications of this integrated experience for companies are complex (especially at the point of initial adoption), because it requires the ability to provide tailored solutions, knowing the context in which the customer is, and to orchestrate the necessary channels to deliver them in a transparent way. However, companies still operating in the old paradigm may spend a bulk of the time playing the catchup, when they should be gliding on the wings of the technological wave; and the same fact holds true for countries.digital innovations into their business plans.

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COVER INTERVIEW

MAKING FINANCIAL INCLUSION COUNT IN DIGITAL LENDING SPACE Renmoney CEO, Oluwatobi Boshoro on innovation as a strategy to power seamless customer engagement across channels while impacting the bottom of the pyramid.

BY LUCY AKOKOTU Could you give us a brief introduction of yourself and renmoney's role in the nigerian ecosystem?

My name is Oluwatobi Boshoro and I'm the CEO of Renmoney. Renmoney is a fintech lending company in Nigeria and we make financial inclusion count through the loans, savings and deposit that we give and receive from our customers. For us, we believe that financial inclusion is about enabling that person to have access to funds and grow their business or personal needs which is why we think that what we do make financial inclusion count. We want to empower average Nigerians with convenient credit to grow their businesses and manage personal needs.

Creating an omnichannel customer experience is at the heart of present and future strategies for financial services firms. How does Renmoney align its services offline and online around this?

The first thing we have done is to internally streamline all our processes so all our customers' interactions are managed through our CRM tool.

What we have done is to ensure that all our customers can be served the same way across board, on whatever touchpoint they contact us through.

So, whether you visit our offices, engage with us on social media or call us, you get the same service experience. This allows us to have a comprehensive view of the customer at every point of their journey with us.

Early this year, Renmoney extended credit facilities to Micro-Small Business Enterprise Loans for business owners. What has the customers' response been like?

Like I said earlier, we are very keen on making financial inclusion count particularly for an unserved segment of the market. Over 70 percent of Nigerians are employed by Micro, Small and Medium Enterprise so if we want to impact the economy directly, that segment needs to have access to credit to grow their businesses. We desire to address the challenges faced by small businesses through access to credit which are some of the reasons why we have done this. A lot of research, testing and hard work went into creating this product, and during the six month period of testing this product, we reviewed over 30,000 applications and issued over 6,000 loans. The response has been positive so far.

account for some time, is it possible for her to benefit from your Micro-loan?

One of the things that is very important to us is to understand your earning power. It is a key factor in our decision-making process as the earning power of the customer, tells us how much you can conveniently repay. With a recent bank statement we can assess your financial position and, if you meet our criteria, irrespective of your line of business, we will do business with you.

Could you explain how the process to get a loan works and how much time does it take to obtain the loan?

Getting a Renmoney loan is very simple. You can go to our website or visit any of our locations in Lagos. We just need a recent bank statement, a valid means of identification and any recent utility bill as proof of where you currently live. With this, in a few minutes, we can determine if you are eligible for a loan or not.

Do you have any plans to expand across the market?

We are constantly exploring opportunities so expansion is something that might be considered down the line.

RenMoney made the London Stock Exchange Group list of 'Companies to Inspire Africa' for 2019. What did you do right to earn this recognition?

The first thing I will say what we did right last year was to become an outside-in Organization. This means that we listened to our customers and then worked our processes to fit the needs of the customers. We put the decision making in the hands of the customer, and they tell us how they want it, when they want it and why they want it. With this, we served our customers better and in the last 12 months we have been able to provide 100,000 loans to customers by bringing convenience to the customer. This got us noticed by the London Stock Exchange Group team.

The influx of fintechs companies providing similar financial services directly or in partnership with banks creates an efficient and resilient financial system but at the same time, intensifies the competition especially for incumbents which may lead to additional risktaking in order to maintain profit margins.

Which other industry can fintechs diversify to in other to reduce the proliferation of the same services?

For a pepper seller that has not operated her 19 /E-PAYMENT REVIEW /MARCH 2019

"I WILL SAY WHAT WE DID RIGHT LAST YEAR WAS TO BECOME AN OUTSIDE-IN ORGANIZATION. THIS MEANS THAT WE LISTENED TO OUR CUSTOMERS AND THEN WORKED OUR PROCESSES TO FIT THE NEEDS OF THE CUSTOMERS”

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COVER INTERVIEW It is important to carefully choose your digital KPIs. Choose what is important to you at the time as there are a lot of applications in the market. Firstly, as a business, you should understand the level of service you wish to provide to your customers and the digital technologies that will enable you achieve this.

I will always say listen attentively to your customers and work with their feedback. The feedback from the customer will enable you to deploy the right technology to help you serve them in the way that they want to receive your service. Secondly, it is also important to monitor the impact of new technologies on processes and people and how it helps you to be cost-effective and efficient.

Yo u m e n t i o n e d f e e d b a c k f r o m t h e customer. How do you analyse customers' feedback to get insights into what they want and how they want to be served?

We have something called customer journey.

We look at the journey of the customer through our CRM and analytics platforms as well as periodical surveys and feedback channels. All these helps us to understand how they engage with our services and allows us to leverage technology to serve our customers better.

What nextgen technologies/trends do you see disrupting the industry in the next 2-5 years?

The first thing I will say is that this market is huge. and there are still a lot of challenges to be solved. The size of the consumer loans market across Nigeria was about N1.3 trillion in 2017. So far, I doubt if any organisation at this level has been able to hit about five hundred billion naira. Now talking about other problems to solve, we have got car financing and affordable mortgages. There are other things that are yet to be mainstreamed in the fintech space.

What are some of the hurdles you face operating in the digital lending space and what does the industry need to do to surmount them?

The first is the unavailability of data. You either find that data is not available and when available, it is fragmented. In the lending space, you have to connect to several sources before you can have a full picture of a customer. That is one area that is a challenge because when you have an available database that gives you access of the customer information on time and every time, it increases the speed with which you return to the customer and it gives you a better picture of the customer's ability to receive credit. You find that with less data, a customer that could have accessed one million naira loan can only assess two hundred thousand naira only. The other one is that the cost of funding from our source are quite high. If we can get a cheaper rate, it will impact the cost of the interest rate. These are some of the

challenges we have in the market.

Thankfully, the Central Bank of Nigeria(CBN) and other Bank of Nigeria(CBN) and other regulatory bodies are now more open and willing to understand how the industry is evolving and together we can surmount these challenges.

We want more of that so that we can innovate and deliver unusual services to the customer.

What is your take on innovation as a competitive edge?” How do you take advantage of new technologies to stay at the forefront of an evolving industry such as payment?

You asked a question earlier about scaling outside Lagos. For us to do that in a costeffective manner and deliver a service at a price that seats well with the customer, we have to ride on the back of technology.

Innovation is necessary to thrive in this industry. It is the only way we can grow and scale efficiently and still provide convenient solutions to customers. We constantly scan the market for new solutions we can implement to solve internal challenges and improve our processes. The CRM solution we recently integrated is just one example of this.

A lot of companies are gearing towards digital transformation. What should business be mindful of as they plan for growth?

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The ability to analyze and generate actionable insights from big data will certainly aid disruption. With big data, companies will have more insights about their customers and be able to serve them better.

“WITH THE CLARITY OF ROLES, STRATEGY AND SUPPORTING THE PEOPLE THAT WORK WITH YOU, YOU CAN MAKE ORDINARY PEOPLE DO EXTRAORDINARY THINGS.” What did you learn from your previous experience that you have applied to your current position?

My experience working in different industries shows that people make the world go round. With the clarity of roles, strategy and supporting the people that work with you, you can make ordinary people do extraordinary things. Finding and developing the right talent for your organization is very important.

Bonus Question: If you had a day to relax and enjoy yourself, where will you go and what will you do?

I would spend the whole day with my kids because they help me relax. They ask questions that make me think about a bigger and better world.

NEFF INSIGHT

PRACTICAL ADVICE FOR THE MITIGATION OF PAYMENTS RISK BY THE NIGERIA ELECTRONIC FRAUD FORUM

Raising consumer awareness on e-fraud: a stitch in time

BY BABATUNDE AJIBOYE

R-L: Sam Okenye,CISO, UBA Plc,Niyi Toluwalope, Ag. Managing Director,eTranzact Plc,Dipo Fatokun, Director, Banking and Payment System Department, Central Bank of Nigeria/Chairman, Nigeria Electronic Fraud Forum(NeFF), Tokunbo Martins, Director, Other Finacial Institutions Suervision Department,CBN, MDesmond Anumkua, DIvisonal Head, Information Assurance, Fidelity Bank, Christabel Onyejekwe, Executive Director,NIBSS Plc,M’fon Akpan, Chief Risk Officer, Stanbic IBTC Bank and Ike Williams, CIO, Heritage Bank

NEFF

Nigeria has witnessed a lot of developments in the e-payments space since 2012. Several advances have equally cleaned up industry data on a number of accounts and account holders through the introduction of the Bank Verification Number (BVN). Today, we have almost 31m account holders and when compared to the N56 Trillion moved on the NIBSS Instant Payment (NIP) platform, we will discover that an average of over N150,000 is moved per account holder every month or N5,000 daily. With the current efforts aimed at reducing financial exclusion from 46.3% to 20% by 2020, we should therefore expect an additional 15 Million account holders, who will be on-boarded more with e-payment products as against the traditional banking products. Hence, a rise in transaction values should be expected.

Gladly, in our payments space, we have not been ravaged with electronic fraud as current statistics show that the value of successful fraud cases has developed an inversely proportional relationship with the growth in e-payments highlighted earlier. Compared to the impressive growth in e-payments, we have witnessed consecutive drops for three years straight in successful fraud cases. This feat, while being enough to pat oneself at the back, it is also important to

note that fraudsters are not sleeping, but consistently looking for ways by which they can compromise a payment system that already has the world watching for its resilience, security and innovation.

It therefore requires that all Industry stakeholders should consistently be on the watch, especially around vulnerable areas of which the consumer of these e-payment products will be the focus.

Developments in information and communications technology will no doubt significantly change the way we conduct business and conclude payments, a greater part of this change will be driven via the mobile platform, thus increasing exposure of unsuspecting and unaware customers to the do's and don'ts of the e-payments world.

On these new channels also comes unique vulnerabilities, and most are directed at the consumer. However, the two that are considered major are highlighted below: 1. Phishing and social engineering Most payment platforms, especially mobile phones are used for a mix of both personal and corporate usage. Mobile phones are gathering more and more information from the customer, which when aggregated, could help to carry out sophisticated attacks.

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L-R: Christabel Onyejekwe, Executive Director, NIBSS Plc, DIpo Fatokun, Director, Banking and Payment System Department, Central Bank of Nigeria/Chairman, Nigeria Electronic Fraud Forum(NeFF) and Tokunbo Martins, Director, Other Financial Institutions Supervision Department, CBN at the unveiling of the 2017 NeFF Annual Report.

These attacks target the user by phishing emails and social engineering exploiting different communication channels (e.g. phone, email, SMS) and data about the user available in the public domain (e.g. social media sites, search engines). The data sought by attackers using social engineering are often payment card data and personal data (PINs) that the user should only know.

NEFF

2. Installation of rogue applications and malware Fraudsters will find ways to install malware on the mobile device by phishing/social engineering a victim to open a malicious attachment in an email, and then redirecting the user to a malicious URL. Another possible channel for malware infection is insecure Wi-Fi hotspots (e.g.

Internet cafes) that might allow an attacker to target the mobile device with a Man-in-The-Middle attack. There is also the possibility of a network spoofing attack i.e, when a malicious user sets up a fake access point with same network name, as one that already exists, such as a popular café name or market chain. They might setup fake website to “authenticate” users, and this way, collect data, then they can later use this data for next steps in their attack. It is not uncommon to see many people use same username and password for multiple services, even for a mobile payment application. This is not recommended at all.

3. Possible Security Measures/Controls Mobile Payment Component Possible Threats Possible Vulnerabilities Possible Security Measures/Controls Users/Cardholders Phishing and social engineering, Inadvertent installation of rogue applications packaged with malware/rootkits Lack of user's due diligence validating content in emails, messages, SMS being trustworthy before selecting URLs, downloading attachments Use of mobile payments with public Wi-Fi connections Missing the following minimum security hygiene rules, using jailbroken OS (e.g. to install untrusted applications

and files on device) Security awareness, education and communication Do not use public WiFi hotspots for mobile payments Keep OS up to date Do not jailbreak phone .

If the Payments Industry must do something, then it is the education of all consumers of e-payment products of their respective responsibilities using; “all effective means to educate consumers and business, including innovative techniques made possible by global networks” (OECD, 1999).

The Industry should, as a matter of urgency, embark on multi-agency and inter-governmental cooperation and co-ordination through the design of a methodology detailing guidelines for promoting safety in the e-payments space. Media (print, radio, social media and TV) should be leveraged upon, in the dissemination of this critical information to consumers.

The Nigeria electronic Fraud Forum (NeFF) has over the years provided a veritable platform for Industry collaboration in the fight against e-fraud, and the Forum again lends itself to realizing the success of this objective of rallying all stakeholders in executing this major frontier in the fight against e-fraud.

The Forum, under the amiable leadership of Mr. Dipo Fatokun, Director Banking and Payments System Department of the Central Bank of Nigeria, will seek to coordinate an industry response to this engagement, as we believe this initiative will be the proverbial stitch in time that saves nine.

Babatunde Ajiboye is a Senior Manager with the Payment System Management Department in the Central Bank of Nigeria. He also doubles as the secretary of the Nigeria Electronic Fraud Forum (NeFF).

Culled from 2017 NeFF annual report.

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THE RISK REPORT

SMART SECURITY DOORBELLS are becoming popular in 2019. Companies like Ring, Nest Labs and August Home are innovating the age old doorbell into smaller and less cumbersome devices. Once installed on your door's peephole, it can detect knocks to alert you to human presence. Smart door bells have remotely accessible features like streaming high-deďŹ nition video, motion detection, cloud recording and an intercom and is used by homeowners to keeping an eye on their homes and reduce neighbourhood crime.

THREAT LEVEL

Plug in devices make laptops and desktops vulnerable to cyber attacks Hackers have developed sophisticated methods and techniques to extract sensitive data by hacking PCs using vulnerabilities with plug-in devices like chargers and docking stations. In a study conducted by researchers from the University of Cambridge in the UK and Rice University in the US, these vulnerabilities were detected mostly in computers running on Thunderbolt ports irrespective of the software OS they were operating on i.e. Windows, MacOS, Linux and FreeBSD. Furthermore, for hackers to target a host machine, plug-in-devices like graphic and network cards can also act as access points as these peripherals have direct access to the DMA-Direct Memory Access.

DATA BREACH Marriott reveals data breach aecting 500 million hotel guests

Though some security researchers argue that all modern day computing gadgets come with a feature called I/O Memory Management Units (IOMMUs) which help restrict access to DMA attackers by allowing access only to non-sensitive regions of memory, the research discovered that hackers have become very much sophisticated these days to compromise any protection on the devices. In 2016, technology companies addressed the issue by releasing security updates from time to time but the recent research shows that the main problem remains elusive due to the developments such as a rise in hardware interconnects like Thunderbolt 3 that combines power usage, data I/O and device management from the same port.

ECOSYSTEM Android TV bug gave users access to strangers' Google Photos.

Car alarms are supposed to cars safe

Smart Car Alarm

A TV bug allowed a user through the Google Home app, access a massive list of random accounts, including access to photos Google Photos. This means, someone could have theoretically displayed your photos as screensavers on their Android TV without you knowing it. The user who discovered this bug theorized that the lists of The hotel chain says it worked accounts were other users with the same TV with leading security experts model, but that hasn't to investigate the alert. been confirmed yet.

Investigators discovered the intrusion, dating back to 2014, Google is working on a fix and has disabled but also that an unauthorized party had copied and encrypted Google Photos screensavers in the information, and took steps meantime. towards removing it.

International hotel chain Marriott has revealed a security breach during which the personal details of 500 million hotel guests was stolen. The breach happened in 2014, but Marriott says it recently became aware of it two days after its staff spotted an alert from an internal security tool about an attempt to access the Starwood guest reservation database in the United States.

from theft, but newly published research has found that alarms made by two companies actually make stealing a car easier because of third party appconnected car alarms. A research by Pen Test partners, revealed that smart car alarm models under the Viper brand, made by U.S. firm Directed Electronics Inc., and Pandora Car Alarms, made by a Russian company called Experimental Engineering Factory are hackable. The security vulnerabilities stem from the way systems from both car companies use apps to communicate with the alarm system.

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A Thursday report from Positive Technologies show critical vulnerabilities that could wreak major havoc to a bank's corporate network by giving attackers access to hack sensitive information that could end up on the Dark Web. More than half (54%) of online banks allowed fraudulent transactions and theft of funds, and all had threats of unauthorized access to client and company information such as account statements and payment orders. Also 77% of online banks had security flaws in their two-factor authentication methods. The alarming thing is that the average cost of an online bank user's data on the Dark Web is just $22, according to the report.

This made it easy for the security researchers to easily reset the password on the alarms and take full control of the car.In addition to allowing a potential hacker to unlock car doors and disable alarm and vehicle immobilizer, the access also allows the owner's details to be stolen, the vehicle to be tracked and even microphones in the vehicle to be compromised. Worse still, the hacker can take control of a vehicle while it was being driven, meaning a hacker could cause a vehicle to come to a halt, potentially causing an accident. Both companies have taken steps to patch the security vulnerabilities, but drivers who do not update the software behind the smart car alarms are still much vulnerable.

THREATLEVEL

INTERNET SECURITY

Instagram Users vulnerable to phishing scam

IBM launches blockchain testing service

Security researchers at Kaspersky Lab have discovered a new phishing campaign that targets Instagram users by using fake copyright infringement notices to steal their credentials. The email appears to be coming from Instagram threats to delete a users' account unless they verify their account. If users click on the button, they're prompted to input their Instagram credentials.

For the double phishing blow, users get a second mail, “we need to verify your feedback and check if your email account matches the Instagram account.” Should users then click on “Verify My E-mail Address,” they're offered a list of email service providers. After selecting their provider, they're are required to submit both their email address and their password for the email account.

Worse, if the email account is Gmail, the victims are also handing over access to their entire Google account as well. Thereafter, they can take over your Instagram account and start demanding ransom to give the account back to you, or start spreading spam and all kinds of malicious content using your hijacked account. The solution is to take simple precautions by checking the URL very well and only use the official Instagram app when interacting with the service.

IBM, a global leader in technology services ranging from hardware, software and cybersecurity is looking to be ahead in the game against cyber security by deploying a SWAT team X-Force Red, to tackle possible cybersecurity challenges in blockchain. Whille blockchain is resilient by design and has not be hacked as a ledgering system for machine-to-machine trade since its launch in 2008, the extended use in other areas apart, may lead to vulnerable systems and process, all prone to human error. Anticipating $10 billion in enterprise blockchain investments by 2021, X-fore Reds blockchain testing service will conduct veritable stress and penetration tests at all phases of a blockchain design, implementation and ongoing use. “New

Microsoft annual report show Phishing attacks up, ransomware attack Microsoft's annual Security Intelligence Report Volume 24 has analyzed data from 6.5 trillion security signals that go through the Microsoft cloud as well as gathered insights from thousands of security researchers.

The report noted that ransomware attacks, along with general attacks using malware, declined by 34 percent in 2018 as attackers shifted from highly visible attacks to more stealth attacks while phishing attacks jumped 250 percent in 2018.

Cryptocurrency mining, also known as cryptojacking, is still prevalent but surprisingly, given the ongoing attention it receives, was also found to have declined over the year. The report also noted that software supply chain attacks are presenting increased risks as hackers leverage the trust users have in their software vendors to gain access to enterprise networks. The report suggested that bad actors have shifted tactics in response to the more sophisticated tools and techniques that have been deployed to protect users.

technologies often play catch-up with security as they emerge through their early adoption phase.

If we look at mobile applications, cloud computing and even personal computers – all these innovations needed to adopt policies and techniques for security,” said Charles Henderson, Global Head of IBM X-Force Red. “However, while blockchain is a breakthrough for protecting the integrity of data,that does not mean the technology and connected infrastructure are always protected from attackers, which is why security testing is essential during development and after deployment” he said. Blockchain technology uses will continue to accelerate provided of course security risks and design vulnerabilities are put in check.

Reverse Engineering is one of the best techniques for fighting fraud. Security experts, can apply reverse engineering by looking 'outside in', to understand the vulnerabilities of a software system and if it's easy to breach, then the security expert can recommend how to protech the software against threat.

The more business move towards Cloud base storage, the more likely vulnerabilities opens and the risk of data theft increases.

Hacker steals $7.7 million in EOS cryptocurrency A hacker has stolen $7.7 million worth of EOS cryptocurrency when a newly rotated top 21 BP failed to apply the blacklist. The hacker moved 2.09 million EOS coins from the hacked account to several accounts at various cryptocurrency exchanges. With the Huobi exchange platform froze, they were able to recover some of the hacked funds but not all. Following the incident, EOS42 is now proposing that the EOS blockchain maintainers replace the shoddy "blacklist" mechanism with a more democratic system where if 15 out of 21 EOS block producers update their blacklist, an account key is nulled, blocking access to the hacked account.

Fraud by Numbers

$6 trillion

$33 billion

700 million

Estimated cost of global online crime by 2021 according to Cybersecurity Ventures.

Estimated loss to cybercriminals yearly by 2023 according to a report by Norton Security.

Email addresses and nearly 22 million passwords compromised in January 2019 from Collection #1, according to a National report.

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65% U.S Organizations breached in the last three years while 36% got breached in 2019 according to a report 2019 by Thales Data Threat Report Global Edition.

ROUNDTABLE

PSB: A Panacea for financial exclusion Adekanbi

In less than 2 years to the fulfilment of the Central Bank of Nigeria (CBN) Payments System Vision2020, this roundtable discussion will focus on what must be done and how the operations of Payment S e r v i c e B a n k s (PSBs), will get us to the promised land of 80% financial inclusion rate in Nigeria.

Respondents Emeka Okoye, CEO, Cymantiks Limited Adeshile Adekanbi, Product Manager CWG Moses Bramiah , Lead Executive Consultant, Pacific Messages, Ona Ohimor, Director, Rising SMEs

HOW WILL THE INTRODUCTION OF PSBS reshape the financial inclusion drive?

OHIMOR: Meaningful achievements with respect to financial inclusion drive will only be realized with the adoption of innovative technologies and policies. The proposed Payment Service Banks (PSBs) is a welcome development and provides an avenue for new entrants into the banking space. The reach and innovations of these new entrants will dwarf that of traditional banks. With PSBs we can only expect acceleration in the financial inclusion drive.

ADEKANBI: The introduction of Payment Service Banks (PSB) was intended to promote financial inclusion and enhance access to financial services for low income earners and unbanked segments of the society leveraging on technology. This awareness will help reach out to the unbanked to promote cashlite and digitalization to the society. This concept will help countryside societies grow access to goods and amenities to small trades, low-income families and other things.

According to Central Bank of Nigeria (CBN), this will also enable high volume low-value transaction in remittance services, micro savings and withdrawal services in a secured technology in driven environment.

OKOYE: What excites me with PSBs are the opportunities for entities like Mobile Network Operators (MNO) and Retail Chains like supermarkets, two key institutions the financially excluded already trust and engage, to offer opportunities of inclusion. They can easily reach hard-to-reach areas by leveraging their geographical footprint or affiliations and networks to offer financial services at a lower cost than traditional financial institutions and with more convenience.

That is to say, customer acquisition is reduced and they can offer new service offerings while gaining customer loyalty.

MNOs in particular would gain additional customers at lower costs, with potential for increased ARPU, considering that retail 26 /E-PAYMENT REVIEW /MARCH 2019

footprint is more than 10,000 times the bank branch footprint in Nigeria.

With their strong brand recognition as trusted purveyors of various consumer goods to excluded individuals, With their strong brand recognition as trusted purveyors of various consumer goods to excluded individuals, retailers are better positioned to introduce formal financial services for the first time, in part by circumventing the intimidation factor which can play a role in keeping low income individuals out of bank branches.

These retailers can stimulate more economic activities by supporting affiliate networks or franchising.

BRAIMAH- I foresee more innovative technologies, investment, improved financial literacy, awareness, more infrastructure, and an easier way to onboarding the unbanked and underserved. However, my advice to operators is that, products and services that they plan to introduce should look at the existing payment habits and culture of different marketing niche and design technology that will ride on them to make acceptance easier. In our various rural and very remote communities, markets, motor parks, cultural associations, and cooperatives, a system already exist. Also, they must take into account that many of the targets are not literate so for ease of adoption nothing should be complicated.

What challenges do you envisage for licensed PSBs under the current framework and how can they be navigated?

OKOYE: MNOs already have a head start being geographically well spread and other entities will find it hard to match their progress. Developing a network by other entities will be painstakingly slow.

Unfortunately, there is no remedy to this situation except to delay MNOs implementations. The MNOs roll out could be swift and massive within a short time.

BRAIMAH: We know financial inclusion

plays a very important role in economic development and growth, poverty reduction, job creation and much more if well managed. However, old habits they say hardly die. Since the regulation did not make provision for compulsory adoption, operators must work closely with third parties service providers who already have agents in some of these locations, different groups and opinion leaders to influence targets. Some form of incentives can also be introduced to encourage and drive onboarding provided it is not against the CBN regulation and guidelines of operation.

PSBs should ensure technology at the front end and self-service should be simple, easy to use and can integrate easily with most existing mobile devices while the back end should be smart and advance to ensure efficiency and quality service delivery.

OHIMOR: The main challenge I foresee is the limitations imposed by regulation. Beyond payments there should be allowance for credit among other financial services even if it is at micro levels initially. Regulatory restrictions and limits should be kept at a minimum. There is need for on-going consultations with all relevant stakeholders.

ADEKANBI: Generally, there is a believe that once it works anywhere else (including Kenya), it can work in Nigeria. The reality is that the culture and economy ideology defer because Nigeria is still predominately cash driven. Some of the challenges foreseen for the licenced PSB will be that they can't generate revenue because they are not allowed to issue out credit facilities to their customers. Hence, there is no way of earning interest. This means that they have limited products to offer their customers and it will eventually stale their growth. Also, should the PSB's fail to be worthwhile as they are anticipated, then they may become one of the banks captivating few portions of the market. Payment Service Banks should be allowed to generate regulated revenue to keep their operations running and service their customers. However, there are indications that PSBs might require a corresponding bank to fulfil their banking operations using NIBSS. Banks are ready to capitalize on this. i.e., Interbank fund

transfers (inbound and outbound), Interbank funds transfer settlement, ATM transactions reconciliation and settlement POS, BVN validation and enrollment etc.

The telecoms will definitely require the bank's partnerships.

How do we change the payment culture of the 'unbanked'?

BRAIMAH: Financial literacy, awareness, collaboration with leaders and influencers of various identified groups and communities will go a long way to change the payment culture of the unbanked. Provision of microcredits with low interest rate will also be a great attraction. Payments for services or access to them should be by mobile or agency banking. Cards can also be used as a primary channel of payment.

OKOYE: We can change the payment culture of the unbanked by offering them cheaper credits and empowering them with more skills. They rely too much on informal sector for availing loans at exorbitant rates which keeps them in that vicious poverty-debtrepayment cycle. Education is very critical at this point in this fourth industrial revolution era. Better employment will lead to improved efficiency and reduce cost which will improve the standard of living. Lack of education leads to financial illiteracy and not understanding information that could lead them out of it. In these rural areas, government need to boost agriculture productivity and other activities that can generate more income.

ADEKANBI: This can be achieved by ensuring continuous education and sensitization for the unbanked. The can be done by enabling rapid growth of agent networks with nationwide reach. Financial technology and use of mobile telephony will have a key role to play in the changes required which can be used to facilitate opening and operating accounts/ mobile wallets on financial services platforms.

Government can also assist to change the game by encouraging more fintech companies in their regulations. Obsession with smartphones and apps will assist to contribute to the expected changes.

Conception of an enabling environment to 27 /E-PAYMENT REVIEW /MARCH 2019

serving the most excluded and Improve the adoption of cashlite payment channels, particularly in government-to-person and person-to-government payments. This approach will help CBN to achieve their target of 80% financial inclusion by year 2020.

OHIMOR: Change in culture or attitude often doesn't come easy. It's either attractive incentives are offered or there is value in terms of cost savings or convenience that will make the unbanked change their ways. With the use of biometrics, there is no need for cumbersome identification and documentation should be minimized.

What else can be done to hasten the Nigeria ďŹ nancial inclusion dream?

ADEKANBI: Amongst others is agent channel enablement, improved network management across the country, agent network build-up, real-time service swap, flexible deployment of the strategy to accelerate financial inclusion in Nigeria.

OHIMOR: Possibility of a convergence between the National microfinance bank license and the payment service bank license should be considered. This will widen the scope of services by the later and increase its attractiveness to investors.

BRAIMAH: The decision to allow Mobile Network Operators (MNOs) to apply for licence will make a lot difference. Results from other climes like Ghana, Senegal and Kenya are clear indications. Nigeria was listed among the World Bank Universal Financial Access (UFA) 25 focus countries.

The objective is to ensure that adults worldwide have access to an account by 2020.

Our being listed here is a clear indication of how poorly we have done in the last 5 years.

Incentives to operators which may include tax reduction or tax holiday for a certain period by granting them pioneer status.

These will eventually reduce transaction cost, improve infrastructure and social services. One thing I must add is that the move will have great impact in Nigeria OKOYE: Boost the deployment of POS terminals, ATMs and a harmonized Identity infrastructure in Nigeria. Re-skill the excluded to raise their standard of living.

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FRAUD REPORT Fraud Landscape in Nigeria 2018

Executive Summary The year 2018 concluded on a good note for the cashless drive in the country. The industry experienced increased electronic transactions across major product lines. With the emergence of different financial technology firms in the country, financial services are becoming more readily available and accessible to consumers. The innovative dynamics introduced to the way and manner we transact have also led to increased adoption of electronic enabled-payments. Improved payment systems brought about numerous changes through smart and convenient electronic payment products. It is important to note that as electronic transactions increase, the prospect for fraudsters also increases within the year. With unique, progressive and evolving threats, various fraud schemes directed to our payment environments by fraudsters have regularly changed the fraud landscape dynamically.

Having recorded over 38,000 fraud count with over 9Billion attempted fraud value within 12 months, it is obvious that the fraudsters are not relaxing in their effort. An estimate of 2.0 Billion was completely lost in 2018. A alysis of reported fraud by channels shows that Mobile channel recorded the highest volume and value, with an estimate of 11,492 in volume and 598.8 Million in actual loss value.

This made our prediction of 2015 come to pass two years earlier than predicted. In 2015,we predicted that mobile fraud would be the highest fraud by the year 2020, but it happened by the end of 2018.

Also, the ATM channel recorded the second actual loss fraud value. In spite of this remarkable increase in reported fraud volume this year, its actual loss increased by 25.7% in value when compared to last year.

Looking at these analyses, the fight against electronic fraud can only be won with strong commitment and collaboration amongst takeholders. With the innovative products and services being rolled out for the industry consumption, it has become imperative that we implement strong authentication controls that would make it difficult for fraudsters to easily succeed. Financial institutions must carry out thorough risk assessments on new products and services before releasing to the market space. It is evident that the increasing cybercrime threats experienced in 2018 are already re-occurring within this current year. Financial institutions must thoroughly report all frauds recorded on their platforms to provide an accurate picture of the threats we face as an industry with a view of curbing the rising trend of fraud. The industry must ensure strong collaboration with security agencies in the fight against fraud. The financial industry needs to resuscitate the Police dedicated electronic fraud unit for deterrence and finally, the industry must embark on massive education of customers as they are seen to be the weakest link in the chain.

NIBSS INDUSTRY SECURITY SERVICES 2019

The ATM channel recorded the highest number in transaction volume, constituting about 45% of the entire transaction volume.

The Instant Payment contributed majorly in terms of value, being responsible for 68% of the entire transaction value. For more than two consecutive years, transactions via the ATM and Instant Payment platform have outnumbered all other payment products in volume and value respectively.

The POS channel emerged third highest in transaction volume after ATM and NIP, and the fourth in transaction value. Again, when compared to 2017, POS transaction volume and value increased by 95% and 65% respectively.

Notably, bulk payments recorded the second highest value of transactions in 2018. Bulk payments include NIBSS-based transactions such as Automated Bulk Clearing (ABC), NEFT, NAPS etc.

Transaction Summary 2018 An analytical overview on the aggregate of transactions processed through the Nigeria Central Switch (NCS) and Automated Teller Machines (ATM) in 2018 shows an increase of 41.5% in transaction volume and a 21.97% increase in transaction value when compared to 2017. In 2018, a total of 1.9 billion transactions were processed with a transaction value of N118 trillion.

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An overview of 2018 transactions shows that each month had more transactions in volume and value than its corresponding month in 2017. As expected, the last three months of 2018 recorded the highest amounts in transaction volume and value with December holding the highest transaction count and value with 202 million transactions and N12.2 trillion respectively.

In spite of the marginal drop in the volume of foreign transactions for 2018, its transaction value still increased significantly. When compared with 2017, foreign transaction volume decreased by 27% while its transaction value increased by 61%. Remarkably the Web channel recorded the highest transaction volume and value. There was also a significant increase in volume and value of foreign ATM transaction by 34% and 264% respectively.

2018 reported fraud volume is the highest seen in the last four years, with an increase of 55.14% in comparison to 2017. Also, its attempted and actual loss value increased by 124.27% and 27.54% respectively.

Financial institutions are encouraged to collaborate effectively in fortifying existing controls to ensure this significant rise decreases in 2019.

In 2018, mobile channel recorded the highest fraud in volume and actual loss value. A total of N598.8 million was lost to the mobile channel within the year. Ease of use has made mobile channel the preferred channel for convenience and smart payments. Fraudsters have also employed mobile channel as a major medium of transferring illicit proceeds.

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Mobile channel fraud took the lead in both fraud volume and actual loss value in 2018. However, in 2017, ATM channel reported the highest fraud in both volume and actual loss value, whereas mobile channel was the third highest reported fraud by volume and the second highest reported fraud by actual loss value.

2018 reported fraud volume is the highest seen in the last four years, with an increase of 55.14% in comparison to 2017. Also, its attempted and actual loss value increased by 124.27% and 27.54% respectively.

Financial institutions are encouraged to collaborate effectively in fortifying existing controls to ensure this significant rise decreases in 2019.

First quarter 2018 witnessed the largest loss to fraud, with an estimated value of N794 Million.

Again, first quarter 2018 recorded the least reported fraud by volume. This same trend mentioned above was recorded in Q1 2017.

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The highest volume of reported fraud was recorded in Q4 with a fraud volume of 11,247. The second highest actual loss value was witnessed in quarter three and about 35% of attempted fraud value was lost within the quarter.

Reported fraud cases across all channels within the last three (3) years can be seen below. Mobile channel recorded the steady increase in both volume and value within the last three years. ATM channel showed slight changes over the last three years. There was a successive increase in volume and value of both mobile and web transactions within the last three years.

There was a successive increase in volume and value of both mobile and web transactions within the last three years. The significant peak in mobile fraud is a pointer to the fact that fraudsters have concentrated their schemes on mobile channels. As a result of this development, measures should be put in place to reduce the occurrence of fraud within mobile andATM channels.

Taking a look at location (by state) where defrauded individuals reside, the trend continues with states like Lagos, Rivers, Delta, Oyo and Ogun featured atop the list. Lagos records the highest value of 29.83% followed by Rivers state at 6.07%.

A total number of 848 unique individuals were beneďŹ ciaries of fraudulent transactions carried out across various electronic channels. These unique individuals were generated from the fraud reported on the Industry Anti-Fraud Portal.

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Based on reported data a total of 17,632 unique individuals were defrauded across e-payment channels in 2018. This comprises of 61% male and 39% female customers.

Taking a look at location (by state) where defrauded individuals reside, the trend continues with states like Lagos, Rivers, Delta, Oyo and Ogun featured atop the list. Lagos records the highest value of 29.83% followed by Rivers state at 6.07%.

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A total number of 754 fraud cases were reported by Other Financial Institutions in2018. When compared to 2017, there was 16.72% increase in reported fraud volume and 19.53% increase in actual loss value.

Also, OFIs attempted fraud value increased by 36.68% when compared to the year 2017. The OFIs were able to salvage 15.54% of attempted fraud value.

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numbers are connected to bank accounts also increases the risk in the event of phone theft. We envisage more fraud on the mobile channel in 2019 Rogue Apps and Software on Mobile Rogue mobile apps are assumed to be one of the fastest-growing phenomena among cybercriminals. Fraudsters create malicious apps that appear genuine, taking advantage of the trust of customers to access their personal information. This can be viewed as a form of phishing on the mobile platform. Financial institutions will be the major target of such criminal actions in 2019.

2018 recorded 38,852 fraud occurrences with ATM emerging as the channel with the highest fraud interest index at 34.87%. The Fraud Interest Index (FII) shows the channel that is of greater interest to fraudsters (Not necessarily the channel with the highest value of fraud). Interestingly, when compared to 2017, ATM channel fraud index dropped from 42.65% to 34.87%. This indicates a reasonable assurance of effective controls built around ATM channels by institutions in the year 2018. In the last two years, ATM and Mobile were the channels with the highest FII, they remain the most probable choice targets to fraudsters with high ROI (Return on Investment). Irrespective of the aforementioned channels, all channels should be protected.

Fraud Schemes: As the threat landscape evolves, we look forward to seeing various dynamics and complexities in schemes used by fraudsters to circumvent controls. Apparently, fraud schemes such as social engineering, SMiShing, Vishing Spear-phishing, and Phishing attacks have grown over time in their various successions and these attempts shall grow more in the year 2019.

More Mobile, More Fraud It is no longer news that more products are being migrated to the mobile channel in order to make such products and services available and accessible to the customers. The fact that mobile

Stakeholders' Collaboration: In 2019, there is a need for effective collaboration among various stakeholders in ensuring holistic fightagainst fraudulent activities. More often than not, timely dissemination of information about impending and developing threats through stakeholders collaboration plays an excellent role more than just technology deployed on workstations, network or servers. A deep collaboration between Telcos and banks would greatly reduce the success rates of fraudsters.

Fraud Management Technologies: Over the years, fraudsters have taken advantage of the weaknesses detected on systems as attack vectors in perpetrating their acts. These fraudsters are expected to step up their game and create more intelligent and powerful attacks than what have been experienced. Deployment of BVN Facial matching and fingerprint verification on channels like ATM and high-end mobile phones would go a long way in assisting to curb friendly /non-friendly frauds. Financial institutions should leverage on the industry anti-fraud solution for ALL their channel transactions (both inter and intra transactions). Fraudsters are beginning to move away from inter-bank to intra-bank fraud schemes. Buoyant banks may choose to invest in the latest technologies and intelligent-based system that can minimize potential risk with minimal human intervention. This must include fraudprevention systems that utilize the strength of learning functionality to stay a step ahead of cybercriminals, instead of retroactively defending against them. The Central Anti-Fraud solution (HEIMDALL) provides this functionality for banks who choose to leverage it.

3. Partnership with the Mobile Network Operators (MNOs): Evidently, in 2018, fraudsters leveraged on Mobile Channel for either a receipt or transfer of illicit proceeds, it also recorded the highest in both volume and actual loss value. As the year 2019 unfolds, we look forward to seeing a seamless collaboration between various financial institutions and Mobile Network Operators (MNOs) in ensuring that various fraud schemes bordering on Mobile transactions are controlled effectively. Also, we look forward to the establishment of SIM swap notifications to financial institutions by MNOs in real-time.

4. Operationalizing the Police Dedicated Electronic Fraud Unit (PDEFU): We would be able to have an upper hand against fraudsters if we have a functional deterrence system.

The Police set up a dedicated electronic fraud-fighting unit for the banking industry, this unit has not been operational yet even though the men are available on ground. We would get a good mileage if the financial industry operationalizes the PDEFU as this would assist with deterrence.

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TRENDS & TACTICS Data Explosion Study: China to Surpasses U.S In Data Generation By 2025 The on-going data explosion around the globe is nothing short of revolutionizing and access to the insights from data will play an important role to create new revenue streams, reach new markets and improve customer service both now and in the future economy. Not only for businesses but counties as A study carried by the International Data Corporation (IDC), a data storage firm Seagate, has found that out that China will overtake the U.S. in data generation by 2025. From the study, China's continuous venture with new technologies, like the Internet of Things (IoT), will outpace average global data generation by 3 percent a year.

In 2018, China generated 7.6 zettabytes of data (a zettabyte is around one trillion gigabytes) while the U.S for its part generated 6.9ZB. By 2025, China is projected to grow to 48.6ZB and US to 30.6ZB. “Data may not be on a balance sheet, but data is a company's most valuable intangible asset, which can create a competitive edge in digital transformation,” the report said.

Chinese eCommerce companies Tencent and Alibaba, are taking advantages of the troughs of data at their disposal to leverage years of data collected to create more personalized services for their customers. The total amount of new data generated in 2025 is expected to grow to 175ZB, from 33ZB in 2018 with major data source from entertainment, internetconnected devices, productivity tools, surveillance footage and metadata, which is an important part of how data is analyzed.

In Short Samsung to launch a wearable smartshirt that connects to your phone and can diagnose lung diseases.

Samsung might develop a new smart shirt with built in sensors that can diagnose diseases through a smartphone. The sensors in the shirt can diagnose diseases by detecting sound from the organs through the frequency and strength of breath. For correct diagnoses, the age, gender, weight and height of the user are taken into account. Samsung hopes the wearable smart shirt technology can cut down on doctor's waiting times.

Virtual human' technology teaches employees softs skills Talespin an augmented and virtual reality solutions firm has launched a “virtual human technology powered by AI to help businesses train employees in interpersonal or soft skills. When using the platform, employees interact with a simulated “virtual human” in a virtual environment designed to look like a workplace and the virtual human uses AI and natural language processing. ''Barry'' mimics body language, and has a range of human emotions to enable employees practice their skills on how to handle everyday conversation, workplace conflicts and even stressful interpersonal situations for conflicts. “Improved workplace communication and empathy are the most critical factors we've identified as we help organizations think about the future of work,” said Kyle Jackson, co-founder and chief executive of Talespin..

Apple TV Coming Soon Apple is on the curp of redefining the television experience just like it did with phone. Apple is expected to launch its TV streaming service in April or early May. Apple's service will feature free original content for device owners, and a subscription platform for existing digital services. Apple ambition go beyond streaming services to include original content from both live TV and on-demand video accessible on virtually any screen to compete with Netflix, Amazon and others. Unlike anything in the market, its new services are expected to build an infrastructure to host content from cable, satellite, streaming video and live TV companies using servers positioned strategically around the country. Customers will be able to watch content from a variety of sources, all within the iOS TV application.

In addition, the company is looking to create a subscription service for news, allowing users to read and publish news at for a monthly fee. A report last month says Netflix and Hulu won't be a part of the service.

Apple, Goldman Sachs brings credit card and iPhone Collabo Apple Inc. and Goldman Sachs Group Inc. are collaborating to launch a joint credit card combined with an iPhone that allows customers to better manage their personal finances.

The credit card will run on Apple's Wallet app and operate on the Mastercard platform, giving customers the ability to set spending goals, manage account balances and track rewards points.

A testing period will commence with company employees before the cards will become available to a larger population later this year.

Both companies began discussing the joint credit venture in 2018. In recent times, Apple iPhone sales has been down and Goldman Sachs is competing to get more digital customers through its Marcus product.

BY THE NUMBERS

$7.3 Billion

862 Million

Cost banks will save Total time saved by globally by 2023 due to Banks in the integration the increased in the use of chatbots by 2023. of chatbots up from $209 million in 2019.

36 /E-PAYMENT REVIEW /MARCH 2019

$1.3 Billion

3,150%

Insurance cost savings from AI use in claims in 2023.

Growth in successful banking interactions 2019-2023.

DIGITAL RECEIPTS

HTC Corp. is now accepting regular cash starting from March, for the purchase of its Exodus 1 blockchain smartphone to the public. The Exodus 1 first went on sale in October and could only be purchased directly from HTC using cryptocurrency like bitcoin, Etherum and Litecoin for $699 and later allowed credit card purchase.

Taiwanese phone maker is adding about 20 new applications to the device, including support for ERC-721 tokens, Apps and genesis blocks.

Facebook to Advance AI by Creating Its Own Chips Facebook is exploring ideas to create its own chips in other to deliver the type of computing speeds necessary to take the next leap forward in Artificial Intelligence.

Though the company is already working with a chip company like Intel on the new chips, it is not ruling out the possibility of developing its own.

Yann LeCun, the company's chief AI scientist and a pivotal figure in modern AI, said the company will use AI to help monitor video in real time and assist human moderators with content selection. Not only that, Facebook is also considering digital assistant market similar to Apple's Siri or Amazon's Alexa that can have conversations with users and has “common sense”.

Companies like Google and Apple, are already investing in companies in the area of chip specialization.

Das smart keyboard aids Das Keyboard has announced updates to its “Q applet” marketplace for information technology professionals and developers.

The Qapps allow developers to set triggers that will change the color of their keyboard when certain events like new email, push pop-ups from websites, alarms occur. The idea is that these apps will permit developers to turn off all of those annoying notifications and instead important notices programmed by the user will appear on the keyboard.

Amazon smart home speaker is maintaining the top market position as fourth quarter sales of the devices hit record highs over the holiday season. A new report from Strategy Analytics, found that in the fourth quarter, sales hit 38.5 million, up 70 percent from the 22.6 million units sold in the previous quarter.

Amazon Echo devices led the market, shipping 13.7 million units to take a 35.5 percent market share, up 91 percent from 7.2 million shipments in the third quarter. Google Home devices sat comfortably in second place with 11.5 million units shipped for a 30 percent market share, up 123 percent from sales of 5.2 million in the third quarter.

“Smart speakers and smart displays were once again the most sought-after tech products this past holiday season and we estimate that more than 60 million households worldwide now own at least one device,” David Watkins, a director at Strategy Analytics, said Noting a changing market, Watkins added that smart displays such as Google's Home Hub, Amazon's Echo Show and Baidu's Xiaodu Zaijia are proving popular with consumers, who are “attracted by the combination of audio and visual stimulus and the wider range of use cases compared to speakeronly devices.” He said sSmart displays made up more than 10 percent of total shipment demand in the fourth quarter and they're expected to be a significant driver of growth in the market through 2019.”

Autonomous BoT FedEx to test Autonomous Bots for Delivery FedEx Corp. is out to change and create new ways to make delivery services seamless. The company has designed “SameDay Bot”an autonomous robot that help retailers make same-day and last-mile deliveries to their customer's doorstep, in order to meet up with customers rising expectations.

FedEx is of the opinion that “hyper delivery” in a manner that is safe and environmentally friendly is key, since many customers live within a few miles of the merchants that they order from.

Machine learning algorithms will help the SameDay bot to understand where obstacles are and create the ideal path to the doorstep. And yes, FedEx said it can get up the steps to the door.

There are concerns that the bots might not be welcomed in some places. In 2017, officials in San Francisco banned such sidewalk-moving bots from most parts of the city. FedEx's bot will be tested close to the company's headquarters in Memphis and other selected office locations and if successful, seek official approval before the bots can commence operation.

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THE GIMLET EYE

A Look at the EdTech Landscape: The World's Biggest Opportunity USING EDTECH TO BRIDGE THE GAP IN EMERGING MARKETS

Not all Rainbows and Butterflies

Schools around the developed world are increasingly criticised for killing creativity and for their rigid approach to teaching. On the flipside of the coin, 72 million children of primary education age, mostly in emerging markets, are not in school.

It's not all rainbows and butterflies though. Long sale cycles set Edtech back; it can take years to test, sell and improve an Edtech product. Furthermore, scaling could prove to be an issue. A product that helps education in a certain country might not necessarily be useful beyond its borders.

Edtech is set to change that. Many predict it to be the biggest and most profitable digitized sector the world has ever known. Edtech broadly refers to the use of technological processes and resources to improve education. It comes in forms of products, apps, and tools to enhance learning and pedagogy for all stakeholders in a student's educational journey.

Per IBIS Capital, a London-based consultancy says, the Edtech market is predicted to reach $252 billion by 2020. According to Metaari,by November 2017 global investments made to learning technology companies reached over $8.15 billion, which is the highest in the history of the Edtech sector by an extraordinary margin.

The New Era of Education Technological change is accelerating at an unprecedented speed and could create a world we can barely begin to imagine. We don't know what careers will look like or how our societies will be organized. This makes much of today's education possibly irrelevant. Even skills that seem 'applicable', like coding or foreign languages, could become redundant as we might discover that computers can code better than humans and that we can use an implant to speak any language fluently.

In a world where information is abundant and right under our fingertips, students no longer need to memorize facts. Instead, they need to know how to research and sort through vast amounts of information, decide what's relevant and important, discern, formulate views and write effectively. However, much of current teaching practices don't reflect that.

Edtech aims to help bridge this gap.

With virtual reality, for example, students can explore volcanoes, caves, the ocean, and travel through space. This offers opportunities for students to travel outside the four walls of their classroom, and saves money and time. VR (Virtual Reality) and AR (Augmented Reality) are helping create an increasingly immersive learning environment with a lot of potential for student engagement. Digital curriculums and using devices in classrooms is rapidly becoming an expectation as students demand more freedom and flexibility in their learning.

Furthermore, there's some resistance from parents and educators to using technology in classrooms. For example, American Academy of Pediatrics stated – as a response to the proliferation of online preschools – that higher-order thinking skills and executive functions such as self-regulation and flexible thinking are best taught through unstructured and social (not digital) play (when referring to preschool age). There are some other issues to consider, such as the fact that not all students have equal access to technology at home or at school. The Edtech industry is estimated to be just 2% digitalised. The adoption of technology is, therefore, being hindered by multiple levels of gatekeepers such as teachers, governing bodies and policymakers.

The sector will also need to find ways to safeguard students' personal data, as well as face the population growth and the rising need for education for some 2.7 billion students worldwide.

The Power of Edtech in Emerging Markets The future is bright for Edtech in developing countries as it provides a very effective solution to the financial and infrastructure-related challenges. Edtech has the power to create efficiencies, cut costs, and enable new levels of democratized access. Issues that plague the emerging markets, such as poor transportation systems and financial difficulties, could be overcome by Edtech. There are still issues though. One of the key challenges in some emerging markets is the lack of mobile phone and internet coverage, even though the coverage has been rising.

More than half of children that have not enrolled in school live in sub-Saharan Africa. In certain countries, such as Somalia and Burkina Faso, more than 50% of children receive an education for a period of less than two years. In sub-Saharan Africa, over 12 million girls are at risk of never receiving an education. In Yemen, more than 80% of girls will never have the opportunity to go to school.

Gamification has been penetrating the learning space for a while. In addition to helping students interact with the content, it also increases retention and comprehension rates. There is also a growing realization that integrating coding across subject areas can help stimulate computational thinking.

On the other side of the world, the Asian education system is booming. In India, the government is heavily emphasizing digital education by implementing programs such as Digital India and Skill India to spread digital access. Malaysia announced in 2016 that primary schools will start teaching coding and China is the biggest investor in EdTech – with investments into Chinese EdTech companies reaching $1 billion in 2017. Many emerging countries, however, still do not appropriate the financial resources necessary to create schools, provide schooling materials, nor recruit and train teachers.

Personalized learning is continuing to spread. By using a combination of face-to-face instruction and technology-assisted instruction (and collecting a lot of data), each student will be able to learn in the way that best suits them. Educators are also investigating connected classrooms and modern learning environments as the latest innovation in teaching.

While some governments in emerging markets are lagging behind, a number of NGOs and private sector players are making great strides. LangBot, gamified and artificial intelligence (AI)-powered language teaching chatbot, has been named the winner of the Ethiopian leg of global startups Seedstars Worlds Competition.

With knowledge and tools available for free or at a low cost, Edtech is indeed democratizing education.

Edves is a full-featured school management software from Nigeria.

Edves encompasses all of one school's needs (automating processes from enrolment, payment, result processing, e-learning, etc). They were among the winners at the 2017 Seedstars World Competition and were granted the Transforming Education Prize of $50K.

Gamification has been penetrating the learning space for a while. In addition to helping students interact with the content, it also increases retention and comprehension rates. There is also a growing realization that integrating coding across subject areas can help stimulate computational thinking.

Personalized learning is continuing to spread. By using a combination of face-to-face instruction and technology-assisted instruction (and collecting a lot of data), each student will be able to learn in the way that best suits them. Educators are also investigating connected classrooms and modern learning environments as the latest innovation in teaching.

Education is the foundation upon which we build our future.

Without education, there can't be innovation or growth.

Education plays a key role in building prosperity around the world.

And technology can help us exponentially speed-up the process.

Everyone has a role to play. At Seedstars, we do that by empowering entrepreneurs who are changing the face of education in emerging markets.

With knowledge and tools available for free or at a low cost, Edtech is indeed democratizing education.

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This article was culled from Seedstars.com

39 /E-PAYMENT REVIEW /MARCH 2019

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