Wema Bank, the oldest indigenous bank in Nigeria, faced a conundrum for many years: while it desperately needed to achieve profitability by acquiring more customers, it could not afford the massive expense that would be required to expand its network of branches. To make the bank’s situation even direr, the Wema brand is not what it used to be. Over the years it has been overtaken by more youthful financial brands, and for a while now has been considered unattractive by a majority of Nigeria’s Millennial population. With these people representing the future of the bank, a change was necessary to ensure the bank’s survival.

Pressed for time and struggling to stay afloat, Wema Bank took a bold step that caught the rest of Nigeria’s banking industry sleeping. In May 2017, Wema Bank offered a fresh and exciting perspective on the Nigerian banking experience with the launch of ALAT, the first entirely digital bank – not just in the country, but one of the first in Africa as well.

Built from the ground up to be a branchless, paperless bank, ALAT completely removes the need for commencing or completing transactions at a physical location. Signing up begins by downloading the bank’s app, available on both Android and iOS, or visiting its web application. Registration is completed by uploading a selfie and a photo of one’s signature, as well as other identification documents. With an average sign-up time of only five minutes, ALAT has revolutionised the process of opening a bank account in Nigeria. The hour-long, paperwork-filled account opening process at traditional banks is now a thing of the past.

The bank’s innovation also extends to securing a debit card, another process that is typically tedious. Unprecedented in Nigeria, ALAT offers in-app card requests and activation, as well as free card delivery in as little as three working days to any Nigerian address.

Like other Nigerian banks, ALAT offers a standard savings account, but that is where similarities end. The bank provides multiple personal savings options, including savings goals and group savings options. Nearly all of these account formats come with up to 10 per cent interest; three times the regular bank rate in Nigeria. To keep its Millennial audience within the ALAT ecosystem, the bank also offers loans and deals or discounts on food, entertainment and travel, and a virtual dollar card for online shopping. This is an innovative use of digital systems and is proving to be extremely successful.

While adoption is increasing among Millennials, the general response to ALAT has also exceeded expectations: during its first year, the bank has acquired more than 250,000 customers responsible for well over NGN 1.6bn ($4.48m) in general deposits. Now ALAT is closing in on the NGN 1bn ($2.78m) mark in terms of deposits into savings accounts. With assets growing steadily, ALAT is also seeing a consistent increase in the number of monthly active users.

Despite its success, ALAT is not exempt from the growing pains that digital-only ventures typically experience. It has also been unable to completely escape the internet connectivity issues and regulatory impediments that would otherwise make its adoption easier. Yet, the bank has shown more than enough promise for it to be a linchpin in the next phase of Wema Bank’s digital transformation journey; the convergence of its banking services into one versatile, omnichannel platform.

 

 

This was first published in the World Finance Magazine (Autum 2018 Edition)