Afrigather Uzoma Dozie is a luminary in Nigeria’s monetary area, serving because the final Group Managing Director of Diamond Financial institution Nigeria. His illustrious profession spans numerous domains, together with monetary advisory, economics, expertise, and entrepreneurship. Uzoma has spearheaded modern technological options to foster sustainable financial reforms all through Africa’s monetary and expertise sectors. His newest enterprise, Sparkle, epitomizes his dedication to leveraging expertise for widespread monetary inclusion. As a mobile-first platform tailor-made for Nigeria’s retail sector, Sparkle seamlessly integrates Uzoma’s intensive background in each retail and monetary providers. By means of Sparkle, Uzoma continues his mission to empower people and companies throughout Nigeria, cementing his legacy as a visionary chief driving constructive change within the monetary panorama. On this interview with the Founding Editor of the BusinessDay Weekender, Lehlé Baldé, he talks about all issues digital, finance, and Sparkle.
Excerpts from the interview
Lehlé Baldé: Trying again at 2023, a 12 months marked by dynamic shifts inside the monetary providers sector, might you share among the vital milestones which have formed your journey in Nigeria’s monetary panorama? What have been the highs and lows that stood out to you?
Uzoma Dozie: Actually, reflecting on the highs and lows of 2023 from the vantage level of a CEO in Nigeria’s digital banking sector presents a singular perspective.
My biggest spotlight of 2023 was the change in authorities. With a brand new president, we noticed regulatory reforms that positively impacted monetary markets, significantly the liberalization of international forex. This transfer aimed to deepen investor attraction and improve transparency by addressing the complexities of a number of alternate charges.
Moreover, the elimination of gas subsidies signaled a dedication to restoring investor confidence and stability. Regardless of international financial challenges, investments trickled into the fintech house, demonstrating the enduring perception in expertise’s position in driving socioeconomic progress.
We additionally grappled with challenges that examined our resilience. Mistrust and uncertainty, pervasive within the African context, solid a shadow over our efforts. This local weather of uncertainty led to the closure of companies and dampened investor confidence, underscoring the significance of restoring belief in our monetary ecosystem.
The prevalence of monetary fraud posed a major impediment to our digital banking initiatives. Combatting fraud and enhancing safety measures grew to become paramount to fostering belief and driving the adoption of digital options amongst our buyer base. 2023 offered each triumphs and trials, it strengthened our dedication to innovation, transparency, and customer-centricity. As we navigate the complexities of the monetary panorama, we stay steadfast in our pursuit of constructing a extra inclusive and resilient digital banking sector in Nigeria.
Lehlé Baldé: Give us a breakdown of the monetary ecosystem in a couple of minutes. Let’s discuss belief points and fraud. I feel that’s an enormous challenge proper now within the monetary sector. What position is Sparkle taking part in in addressing belief and fraud points?
Uzoma Dozie: Let me break down the monetary ecosystem for you in a nutshell. At its core, belief is paramount. It’s about certainty and transparency. It’s about realizing that while you make a fee, it would undergo as anticipated and that while you interact in transactions, you’ll get what you’ve been promised. That is particularly essential in at this time’s panorama, the place belief points and fraud are pervasive within the monetary sector.
Within the realm of small companies, that are the engine of financial progress, belief performs an much more vital position. As people transition from cash-based methods to e-commerce platforms, they’re uncovered to numerous dangers. Take, as an illustration, shopping for one thing on-line – you see a product on Instagram, and make the fee, nevertheless it doesn’t meet your expectations, or worse, it’s a rip-off.
At Sparkle, we acknowledge the urgency of addressing these belief points. Our mission is to construct belief methods that take away the human component, mitigating dangers for each consumers and sellers. One initiative we’re actively pursuing is the implementation of escrow providers. Image this: You’re enthusiastic about a product, however you’re hesitant to make a direct fee. With escrow, you possibly can deposit your cash, the vendor delivers the products, and solely while you’re happy and the phrases are met do you launch the fee.
This method not solely safeguards transactions but in addition fosters confidence and transparency within the monetary ecosystem. By proactively tackling belief and fraud points, Sparkle is paving the way in which for a safer and dependable monetary future.
Lehlé Baldé: Trying again, what has been probably the most difficult a part of constructing Sparkle?
Uzoma Dozie: Actually, the preliminary part was exhilarating. If you’re fueled by the idea that your concept can genuinely make a distinction, it’s fairly thrilling. Constructing the workforce, seeing the thrill, and launching constructive suggestions, have been the highlights. However then actuality hits, and the challenges begin to floor.
For us, the most important hurdle has at all times been expertise. You could have this imaginative and prescient of the place you wish to go, and the abilities that you must get there, however discovering the fitting folks in an atmosphere the place expertise is scarce? That’s robust. Mind drain is an actual challenge, driving up prices and injecting uncertainty into every little thing we do. And let’s not neglect the curveballs like EndSARS and COVID, they threw us off beam, little question, however right here we’re, nonetheless standing, nonetheless rising. It’s a testomony to our technique, our folks, and our enterprise mannequin. Sparkle was born amid robust instances, and we’re thriving regardless of the chances.
Positive, 2024 is shaping as much as be one other difficult 12 months. Persons are nonetheless recovering from dashed hopes and setbacks. However you recognize what? Challenges breed alternatives. We’re within the enterprise of constructing, laying down the foundations for one thing strong and enduring. Like a skyscraper, you begin with the groundwork, ensuring it’s sturdy and resilient.
However as a result of it’s difficult, it implies that we have now a greater alternative. For us, we’re within the part of constructing, we’re constructing a skyscraper and to construct a skyscraper, you could construct down first, the foundations have to be sturdy, have to be strong. We’re constructing foundations of the fitting kind of individuals, the fitting kind of tradition, household, technique governance construction, and so forth. These are those that might assist us face up to the challenges.
Nonetheless utilizing the skyscraper analogy, when there’s excessive wind, rain, and so forth, that ten-story constructing remains to be going to be there, standing. In 2024, we’re going to see a variety of collapse. We already noticed them in 2023. So we’re going to see extra in 2024, however what we’re constructing at Sparkle is a protected ecosystem for folks, a belief system. Belief that we’re nonetheless going to be right here tomorrow, belief that we’re going to be in an atmosphere the place your cash goes to be protected, belief you could invite folks to hitch the membership and they’ll say thanks for main me on to a great factor.
Lehlé Baldé: Sparkle targets, from my statement, Gen-Zs and Millennials. Would you agree?
Uzoma Dozie: Predominantly, our buyer base consists of 90 p.c Millennials and Gen-Zs, with extra Millennials than Gen-Zs really, mirroring society. So we’re participating with the fitting viewers.
Lehlé Baldé: When you might return to while you have been 24 years outdated, what monetary recommendation would you give your self?
Uzoma Dozie: Save extra, simply put one thing apart. Why do I feel like that? There was no alternative to take action, or it was cumbersome. However then once more, banking at this time is totally totally different from what it was like again then, particularly in Nigeria. At 24, I used to be in Nigeria, and to avoid wasting. Again then, I needed to bodily go to the financial institution. If I wished to avoid wasting each single day, then each single day I needed to go to the financial institution and provides an instruction to take action. It was a laborious course of, and I couldn’t simply observe my financial savings. Furthermore, the belief issue wasn’t fairly there.
Moreover, banks at the moment didn’t focus a lot on shopper providers; they have been extra geared in the direction of industrial banking. As customers, we have been considerably uncared for. These days, every little thing has modified drastically. Firstly, you don’t must bodily go to a financial institution; your financial institution is true in your hand. Secondly, talking for Sparkle, I save with out even fascinated by it. I set directions to avoid wasting a specific amount or a proportion of my spending, and it’s completed robotically.
The cash I exploit for donations, and the cash I spend on events and items all come from my financial savings. If I had began doing that at 24, I’d in all probability be significantly better off financially at this time.
Lehlé Baldé: Your profession spans 25 years or extra, permitting you to witness the evolution from conventional banks to digital banking. Trying again on the banking scene 15 years in the past, what notable modifications have formed the business to make it extra attention-grabbing?
Uzoma Dozie: There are fairly a couple of notable modifications. I’d say probably the most vital one is in funds. The way in which we pay for issues has undergone a dramatic transformation, significantly with the rise of cell expertise. Whereas we had banks, branches, ATMs, and point-of-sale terminals, cell expertise revolutionized the complete panorama. It allowed banking to interrupt free from the confines of bodily branches, empowering folks to make higher monetary selections and entry banking providers extra conveniently.
Cellular expertise was a game-changer, forcing the monetary providers ecosystem to reimagine banking and prolong its attain to incorporate extra folks. We’re nonetheless on this journey, however with developments in expertise and collaboration amongst stakeholders, authorities, the personal sector, and others we have now an incredible alternative forward of us.
Monetary inclusion is a key aim, nevertheless it’s only one piece of the puzzle. There’s additionally id inclusion, social inclusion, and guaranteeing that monetary establishments cater to the wants of all segments of society. Cellular expertise has performed a pivotal position in reshaping banks and shifting mindsets.
Nevertheless, we nonetheless have a protracted street forward. Conventional banks, like those I began with, primarily targeted on offering monetary providers to industrial and company prospects, with customers being considerably of an afterthought. Now, we’re in a transition part the place new gamers are getting into the market, fintechs and neo-banks.
The chance lies in studying from each the standard and the brand new gamers. We will leverage the strengths of conventional banks, reminiscent of belief and capital reserves—whereas embracing the agility and technological prowess of fintechs and neo-banks. Expertise is invaluable, and it’s one thing we’re leveraging at Sparkle.
Whereas conventional banks boast belief and substantial capital reserves constructed over time, newer gamers like Sparkle provide agility, data of cutting-edge expertise, and a customer-centric tradition. Our prospects could also be older than Sparkle itself, however what we convey to the desk is a deep understanding of the wants and preferences of at this time’s cell, dynamic shopper base.
On this new age, the place mobility and adaptability are prized over possession, and funding is favored over conventional financial savings, it’s important to mix the knowledge of the previous with the innovation of the long run. By embracing range of data and studying from each outdated and new gamers, we will create a seamless and enriching banking expertise for the trendy shopper.
Lehlé Baldé: Speak concerning the connection or collaboration between Neo and conventional Banks. Might you focus on any tales of collaboration between Neo and conventional Banks and the way widespread is the connection between the 2 or the competitors?
Uzoma Dozie: There’s a particular component of competitors. It’s akin to the dynamics between mother and father and kids; every with their method, however with the potential to foster concord, friendship, and collaboration somewhat than only a hierarchical relationship.
On this analogy, conventional banks are akin to the parental figures, whereas neo-banks characterize the youthful, extra modern gamers. Nevertheless, it’s important to acknowledge that each conventional and neo-banks are integral components of society.
Throughout my tenure at Diamond Financial institution, I had firsthand expertise of the alternatives offered by collaboration. We partnered with quite a few fintechs to develop modern options, significantly within the realm of monetary inclusion and mobile-first methods. This collaboration was born out of the popularity that conventional banking methods have been ill-suited to deal with the wants of sure market segments, significantly within the retail sector the place transaction volumes have been decrease, and demand was totally different.
Conventional banks boast vital belief and capital reserves, making them well-positioned to democratize providers and convey down prices to extra accessible ranges. This creates a complementary relationship with neo-banks, providing numerous avenues for collaboration.
I’ve a fruitful relationship with Entry Financial institution, significantly in areas reminiscent of infrastructure, capital assets, and back-end assist. Massive gamers like Entry Financial institution usually have extra capability that may be leveraged by neo-banks, leading to mutual advantages. By using this extra capability, neo-banks can scale back prices whereas giant banks generate extra earnings with out incurring extra bills.
Furthermore, collaboration extends to areas like cyber threat and fraud administration. In at this time’s interconnected monetary panorama, the power of the complete ecosystem depends upon the resilience of its particular person elements. Subsequently, it’s essential for major service suppliers, reminiscent of conventional banks, to bolster the capabilities of neo-banks to make sure the general safety and stability of the monetary system.
Collaboration between conventional and neo-banks isn’t just about competitors; it’s about recognizing one another’s strengths and leveraging them to create a extra sturdy and inclusive monetary ecosystem.
Lehlé Baldé: As you talked about, you’re collaborating with bigger banks to fill some gaps and add worth. Do you suppose it is a frequent expertise for many digital banks, or do you attribute it to your background in conventional banking?
Uzoma Dozie: At 55, I’ll not have the identical tenure in digital banking as a few of my colleagues of their 35s or 40s, however my expertise in understanding the market dynamics and key stakeholders has been invaluable. It’s not nearly our financial institution and our prospects; it’s about navigating a posh ecosystem that features laws, laws, authorities our bodies, neighborhoods, and naturally, our prospects. Having participated on this ecosystem for some time, we have now a deep understanding of how these entities work together and affect each other.
Whereas we’re constantly studying, significantly from our interactions with Gen Z and Millennials, we additionally perceive the wants and behaviors of Gen X and child boomers, having operated in that house. As a financial institution, our enterprise mannequin stays predictable: producing charges and curiosity earnings requires deposits to lend and facilitate transactions. Whereas Gen X and child boomers are usually extra targeted on deposits, Millennials and Gen Z are extra transaction-oriented. Subsequently, attaining a wholesome stability throughout these buyer segments is essential for our monetary stability and attractiveness to buyers.
This mindset informs our method at Sparkle. No matter how we model ourselves, the basics of banking stay the identical: addressing the fundamental inputs required to maintain the engine of our enterprise. This will typically be difficult for individuals who have developed modern options with out contemplating the broader market dynamics and stakeholders.
As an example, at Sparkle, we acknowledge that our digital banking proposition can solely scale successfully if we collaborate with key stakeholders reminiscent of regulators and legislators to undertake laws and legal guidelines. This allows us to develop into new markets and drive adoption. Current developments like open banking laws and the introduction of e-currency are constructive steps that sign to buyers that the federal government understands the potential of digital banking and is prepared to assist its progress.
Nigeria’s pioneering efforts in implementing open banking and introducing e-currency showcase the nation’s dedication to fostering innovation within the monetary sector. It’s important that we successfully talk and market these constructive developments to buyers, focusing not solely on challenges but in addition highlighting the alternatives and developments within the business.
Lehlé Baldé: You talked about Gen X and Boomers; how have they tailored to digital banking in your opinion? Is that one thing they’re open to?
Uzoma Dozie: They’re open to it, however I imagine we’d like extra disruptions to drive wider adoption. The catalyst for a lot of was the COVID-19 pandemic. Initially, they have been conscious of digital banking, however true appreciation got here throughout lockdowns after they realized its time-saving advantages. Instruments like Zoom and Groups demonstrated that you just didn’t must commute for conferences. Moreover, money shortages throughout the pandemic compelled even Child Boomers and members of the Silent Technology to discover digital banking options.
The problem now’s find out how to onboard them successfully. This transition requires a mix of human interplay and technological options. Whereas customers adapt comparatively simply, small companies face larger hurdles. That is an space we’re actively addressing, offering hands-on assist to assist them navigate the digital panorama.
Expertise, significantly synthetic intelligence and media developments, performs an important position on this course of. Our chatbot, Indy, as an illustration, can assume numerous personas and talk in a number of languages, together with pidgin English. This personalised method makes monetary training extra accessible and relatable.
Monetary inclusion is a key focus for us, and enhancing digital infrastructure and liquidity is key. Sparkle serves as a conduit, showcasing the probabilities of democratizing finance. By leveraging biometrics and distinctive identities, people can self-include within the monetary system. This not solely fosters belief but in addition encourages social participation and tax compliance.
When people really feel included and empowered, they’re extra more likely to contribute to society positively. Finally, facilitating monetary inclusion isn’t only a matter of accessibility; it’s about constructing belief and fostering a way of collective duty towards societal improvement.
Lehlé Baldé: We talked a bit about regulation, and also you talked about the money scarcity that Nigeria skilled proper earlier than the elections this 12 months. How did that have an effect on Sparkle?
Uzoma Dozie: Sparkle gained extra prospects throughout that point. Now, let’s shift our focus to regulation. How can we make laws extra dependable to make sure they profit each policymakers and end-users?
I imagine there’s been notable progress on this space. Varied committees and boards now facilitate discussions between market gamers and regulators, searching for a center floor. As chairman of the CEO committee of Fintech Nigeria, I attempt to construct belief within the Fintech business by establishing requirements that guarantee all gamers adhere to the fitting guidelines. This ensures that new applied sciences and fintech’s are seen as important elements of the financial system, garnering a degree of belief even from conventional banks. Our ongoing engagements with regulators are a part of this effort.
Whereas laws is essential, there’s a necessity for regulatory assist. Many legal guidelines governing the monetary sector haven’t saved tempo with technological developments. Open banking, as an illustration, empowers prospects by permitting them to dictate the usage of their information. Fortuitously, laws on this exists, opening doorways for us to unlock information for higher buyer insights.
Think about lending: historically, selections are based mostly solely on monetary information. Nevertheless, we now perceive that non-financial information, reflecting a willingness to pay, is equally important. Sparkle’s lending mannequin, beginning this quarter, leverages each monetary and non-financial information. We intention to supply the tempo of conventional banks at a value vary they supply, mixed with the pace attribute of fintech’s.
This method addresses a typical buyer dilemma: fintech provides pace however at a excessive value, whereas conventional banks are slower however extra inexpensive. By mixing the strengths of each, we’re poised to ship a superior buyer expertise. This requires the fitting mix of expertise, tradition, and expertise, a mix we’ve invested in at Sparkle.
Lehlé Baldé: You’re about to launch your lending providers, which is kind of thrilling. Are you able to stroll us by way of what it will imply for the tip person?
Uzoma Dozie: It’s an thrilling improvement for us. One of many key highlights is the seamless course of we’ve designed. There’s minimal human intervention concerned. For these already on Sparkle, the system does about 90 p.c of the heavy lifting. Customers will merely obtain a notification indicating their eligibility for a short-term mortgage, usually round 30 days. From there, it’s as simple as urgent a button to proceed, and the mortgage processing begins instantly.
Our lending mannequin emphasizes the significance of knowledge. The extra information customers enable us to entry, the higher we will tailor their mortgage phrases. We undertake a dynamic pricing method, which means that as we achieve extra perception right into a person’s threat profile, we will provide extra aggressive charges.
It’s price noting that lending is only one side of our broader service providing. At Sparkle, we’re not solely targeted on maximizing earnings from lending. As a substitute, we view lending as an integral a part of the general person expertise. By leveraging our distinctive financial mannequin, we intention to supply extra worth to our customers, incentivizing them to stick with us over the long run.
Our method to lending is rooted in our dedication to user-centricity and innovation. We’re leveraging our distinctive setup to ship a lending expertise that’s each seamless and helpful for our customers.
Lehlé Baldé: What traits do you foresee shaking up the worldwide monetary service sector, and the way may this affect our native monetary panorama? Might you paint an image of the way forward for monetary providers, drawing out of your intensive expertise in banking?
Uzoma Dozie: Allow us to dive into the way forward for banking. It’s akin to the evolution of the cell phone. Keep in mind when telephones have been primarily for speaking? Now, they’re pocket-sized computer systems that deal with a myriad of duties. Banking is present process the same transformation.
Historically, banking revolved round storing cash, facilitating transactions, and lending. However expertise has shattered these conventions. Sooner or later, people may have extra company over their funds. They’ll determine whether or not to park their cash in a financial institution for safekeeping or discover funding alternatives like crypto or shares.
Expertise is democratizing finance. Supermarkets now provide loans, and platforms like Jumia present fee options, difficult conventional banks. Tomorrow, people could tailor investments to their preferences—maybe investing in commodities or indices based mostly on anticipated market traits.
Expertise is a game-changer. It makes monetary providers extra accessible and cost-effective. What was as soon as unique to the prosperous will grow to be mainstream. Think about somebody predicting inflation and deciding to spend money on champagne futures to hedge towards rising costs. This degree of monetary sophistication will grow to be commonplace.
Think about lending. Quite than relying solely on banks, people may lend on to friends by way of platforms powered by superior algorithms. This personalised method to finance can be facilitated by open banking, empowering customers to make knowledgeable selections based mostly on complete information.
At Sparkle, our platform is constructed on belief, simplicity, and transparency. We acknowledge that the boundaries of banking are blurring. Sooner or later, people will search options tailor-made to their wants. That’s why our focus isn’t simply on saving or lending however on enabling customers to realize their monetary objectives. We’re not only a intermediary; we’re a trusted associate in serving to people navigate their monetary journeys.
The way forward for monetary providers is user-centric, tech-driven, and empowering. It’s about enabling people to do what they need with their cash, with platforms like Sparkle facilitating their monetary aspirations with out the same old complexities and opacity.
Lehlé Baldé: Earlier you talked about, constructing from the inspiration up and going up. So, what does that constructing seem like for Sparkle in 10 to fifteen years?
Uzoma Dozie: Initially, small companies are at all times going to be the material of society and we wish to be the platform that helps the engine of progress of the financial system. We don’t know what enterprise goes to be like however what we do know is that understanding our prospects, understanding what drives the financial system, and understanding how we will use expertise to assist that, if we hold true to the values, while you say small enterprise, after we say the engine of progress, Sparkles ought to be a part of that dialog.
Lehlé Baldé: So the place do folks obtain Sparkle?
Uzoma Dozie: The app retailer and the Google retailer. Easy.
Lehlé Baldé: Thanks in your time.
