Setting the Pace for Sustainability in Nigeria’s Financial Sector

Setting the Pace for Sustainability in Nigeria’s Financial Sector

Dr Herbert Wigwe is currently the CEO and Group Managing Director of Access Bank Plc (Access Bank). He bought Access Bank in 2020 alongside Aigboje Aig-Imoukhuede, his business partner. CSR-in-Action chose to interview Dr Wigwe because of his wealth of knowledge about the banking sector and for the Bank’s high recognition in sustainability by regulators, industry and international audiences.

Access Bank is a leader in sustainability in the banking sector and is the first financial services organisation to release a standard sustainability report for the past 10 years, year on year, with the last seven years’ progress under the leadership of Dr Wigwe.

He is a well-respected businessman, who in this interview, details some of the key actions financial services businesses must take to solidify their business enterprise, and gives us his projection of what the banking industry will look like in years to come, in addition to the role Access Bank will play in the industry’s transformation.

Dr Wigwe, you are part of a duo that transformed an ailing enterprise into a leading banking brand, renowned locally and regionally, and with international respect. You have consistently won a record number of indigenous awards as well as international awards on sustainability focused on the African market. What inspires the sustainability pillars of Access Bank?

Since 2008, Access Bank Plc has benchmarked its business practices and operations against international best practices as a means of shaping its strategy and decision-making processes.  In line with this, the Bank’s approach to sustainability aligns with globally accepted practices. As a sustainability leader, Access Bank remains committed to the path it had set for itself and continues to enhance its contribution to addressing critical development issues across Africa.

Financing and facilitating a sustainable future for Africa, and indeed the world is something we are very passionate about. Now, more than ever, Africa needs us to unite as we seek to improve access to health care, sustainable energy, finance, and advance the standard of living in communities wherein we operate. In recent times, we have demonstrated leadership with the issuance of the first-ever Climate Bonds Initiative (CBI) certified Green Bond in Nigeria, as well as our role in Nigeria’s fight against the coronavirus through the Private Sector Coalition Against COVID-19 (CACOVID), among others.

Through innovative banking initiatives and our underlying sustainability drive, we will continue to create shared value for all our stakeholders, striking a balance between competitive advantage and corporate social responsibility.

What would you say are the mechanisms that have helped the banking industry achieve some semblance of sustainability advancement in the last decade?

The banking industry is essential to the growth of economies and more granularly, the sector is the chief financier of development projects. Therefore, it was inevitable that the sector is addressed as a critical factor in pushing through the sustainability agenda.

Recognising our place in society, Access Bank in 2011 initiated and led the establishment of the fully-adopted Nigerian Sustainable Banking Principles (NSBPs). Access Bank continues to lead the industry as the Chair of the Steering Committee for the Principles. Prior to this, the majority of Nigerian banks sparsely addressed the criteria of the subsequently issued NSBPs -reporting, collaboration, capacity-building, business activities, etc. – before the development of the mandatory guidelines in 2012. However, there has been significant improvement in the performance of Nigerian banks in addressing sustainability issues in the past decade.

Additionally, we are currently in a clime where the world demands accountability from organisations about how they address sustainability. In addition to other regulatory and voluntary sustainability guidelines, the NSBPs can be deemed as the most notable mechanism that kick-started action in the banking industry.

What is the most innovative change that has hit the banking industry in recent times?

Before COVID-19, the banking industry was experiencing an unprecedented period of growth despite increasing consumer expectations and increased competition from non-traditional financial service providers.

However, in a matter of only a few weeks, the banking industry experienced a level of disruption that has changed the norm in the delivery of financial services. There has not only been a significant change in the way financial institutions conduct business but also in the manner employees execute their work and how consumers manage their finances.

Banks such as ours have used this time of disruption to reinvent themselves, especially with our use of data, AI, technology and human resources to impact marketing, innovation and the digital delivery of products and services. We have examined efficiencies to create entirely new business models that will affect all components of performance. Right now, there is an opportunity to re-evaluate how technology, insight and analytics can accelerate the future growth and competitiveness of financial institutions globally.

That’s interesting. Would you say, though, that there is an incentive for a company to transform and pursue more sustainable strategies?

There are numerous incentives for companies to become more sustainable. It is no secret that Access Bank will not be the globally recognised institution that it is today if our business was not hinged on sustainable practices.

Sustainability presents several opportunities, including the chance to tap new sources of capital and innovation. Additionally, integrating sustainability more deeply into a company’s overall strategy is a great way to grow both top and bottom lines as well as become an employer of choice.

Finally, in the decade of action, the achievement of the SDGs requires a reshaping of finance and capitalism. This represents a historic opportunity for businesses to stave off environmental catastrophe and related economic collapse. Particularly, I want to state that:

Sustainability has become a business imperative for all companies.

Businesses can make progress through public-private collaborations, cross-industry partnerships and CEO-led associations.

Businesses should work to source responsibly, minimise their footprint, innovate around the life cycle of a resource and be transparent.

What do you think the banking industry will look like in 10 years?

The future of banking will look very different from today. To be successful over the next ten years, banks must embrace emerging technologies and digital transformation. Faced with changing consumer expectations, emerging technologies, and new business models, banks will need to start putting strategies in place now to help them prepare for banking in 2030. A few of the emerging trends that will affect the banking landscape in this decade include cyber risk, enterprise agility, data integrity and analytics, and the future of work, amongst others.

Any player in the sector has to be ready to adjust for all of these. It isn’t enough to build capacity for one at the detriment of the other, because everything will matter ultimately. In recognising this, every solution Access Bank deploys has to meet the simple, but powerful sustainability requirement which ensures all of the aforementioned are taken into consideration.

How has Access Bank been involved in the industry transformation that you are describing?

For one, we have recognised the future of banking to be dependent on high levels of Information and Communication Technology adoption; this informed our decision to merge with Diamond Bank and in so doing, absorb its substantial capacity for digital banking. This has the capacity to integrate all the strata of society seamlessly into structured banking and also adapt to how the financial sector evolves in the coming years.

For Nigeria especially, there is no avoiding this tested path to an all-encompassing, financially inclusive banking system. According to the report, the ‘Assessment of Women’s Financial Inclusion in Nigeria‘, instead of the 20 per cent target that the National Financial Inclusion Strategy set in 2012, the exclusion rate for men as of December 2019 was 24 per cent. It puts female exclusion at a bleak 34 per cent. Combined, about half of Nigeria’s adult population is cut off from the financial system. That is tremendous, and it has to change.

To bridge this gap, we have also introduced a scalable agency banking network, called CLOSA. Access CLOSA provides financial services in underserved communities. Furthermore, through the Africa Fintech Foundry, our technology accelerator subsidiary, Access Bank has consistently launched innovative banking products, recently introducing the first facial-biometric payment solution in Nigeria.

Congratulations! Do you think that your sustainability approach has enhanced your brand and image reputation?

The Access Bank brand has largely become synonymous with sustainability in Africa. In the last few years, the Bank has grown into a powerhouse in the Nigerian and indeed, the African banking industry. Our strategic engagements on various platforms such as the United Nations Global Assembly to leading and supporting pioneering initiatives such as the development of the Global Principles for Responsible Banking have positioned us strongly amongst international stakeholders. The Bank has also been recognised by local and global awards and regulatory bodies including Karlsruhe, Euromoney, and the Central Bank of Nigeria. Only recently, the Bank was awarded the Karlsruhe Outstanding Business Sustainability Achievement Award for the fifth consecutive year.

We are happy with all the successes recorded so far, and we hope to reach and surpass other targets we have set for ourselves. Access Bank will continue on its journey to becoming Africa’s gateway to the world, through strategic expansion into new and emerging markets within and outside Africa and providing a best-in-class customer experience.

How has Access Bank managed to be at the centre of employee attraction in the banking industry?

Access Bank has a clear vision to be Africa’s gateway to the world by helping Africa play its part on the global stage. I believe that a significant number of individuals buy into this vision and want to be a part of a project that is bigger than self and want to play their role in transcending how Africa and African institutions are viewed.

I think this question is important. Would you say there is any effect of holistic long-term planning on Access Bank’s productivity and efficiency in handling operational business?

Access Bank takes up a robust and holistic approach to strategic planning, identifying opportunities that differentiate us from competitors. We have done this over the years by realigning our business to what is our main focus, as well as optimising our channels to assess the various ways customers interact with us. We have also achieved this by processing costs to improve the Bank’s ratio by reducing the unit cost-to-value percentage of each activity and transaction.

More so, by ensuring and empowering staff productivity, using technology and automation to get more significant volumes of activity, as well as strengthening our vendor relationships, we have set ourselves on the way to being the ‘Most Respected African Bank’. We have not achieved our successes thus far by planning for every quarter as we went but by having long-term plans to help us achieve our desired goals. These long-term plans have helped to enhance our productivity and efficiency in handling operational business.

This is not to say that we obsessively follow these plans without room for flexibility, rather, we proactively predict markets and through our robust risk framework, we design alternative strategies to mitigate changing market realities. That said, the COVID-19 pandemic taught us that us predicting financial markets can be a very tough prospect. Thankfully, immediately after news of the earliest outbreaks spread, Access Bank put in place holistic business continuity plans that have thus far allowed us to continue with our expansion plans.

Thank you, Dr Wigwe. (Interview ends)

2456 1489 CSR-in-Action

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