By Francis Ogwo
Banks and other financial institutions have been charged to be flexible in adjusting their business modules to cope with uncertainties and unforseen disruptions without hampering their service delivery to customers.
This call was made by the Deputy Governor, Financial System Stability, Central Bank of Nigeria, Mrs Aisha Ahmad, during a webinar put together by the Centre for Financial Studies (CFS) of The Chartered Institute of Bankers of Nigeria (CIBN).
In a release signed by Nelson Olagundoye, Head, Corporate Communication & External Relations, Mrs Ahmad said the survival of banks and other financial Institutions during periods like the present COVID-19 shutdown is determined by the principles they adopt which must be sustainable.
She stressed that the pandemic has had huge effects on the economy and depleted the fortunes of businesses across countries.
At the Webinar tagged ‘CIBN Advocacy Dialogue Series 2.0 focused on Enhanced Sustainable Banking (ESB) Model in the Event of Major Economic and Business Disruptions’ which had over eight hundred participants, Ahmad stressed that there was an ongoing overhaul of the system of operations of financial institutions and therefore banks have to modify their business models to address the changes caused by innovation, digitalization, new entrants by Fintechs, increasing regulation and changing needs and behavioral patterns of customers.
“These developments have triggered very aggressive changes in the financial services industry, introducing significant dynamism into the industry’s value chain – changing the mode of production, delivery and consumption of financial products and services” she added.
Speaking further, she reiterated the position of the Central Bank of Nigeria (CBN), in putting banking principles in place through the implementation of the Nigerian Sustainable Banking Principles (NSBP) formerly been adopted by the CBN and 33 banks, discount houses and Development Finance Institutions.
In his remarks, the Vice Chairman of FMDQ Group, Mr. Jibril Aku, FCIB, was of the view that Nigeria’s economy may plunge into a second recession after COVID-19.
He therefore advised that part of the steps policymakers, banking sector and Capital Markets should take, include the following:
For the policy makers, he called for:
“Recalibration of national economic strategy to reduce dependence on oil/gas sector and boost non-oil sector growth and enjoined strategic investments in health sector with a focus on domestic production”.
He added that “there is the need for investment in digitization of education in public schools to prevent the collapse of the educational system as well as unified and market determined exchange rate regime,” the release added.
Speaking further, he advised the banking sector to ensure effective implementation of sustainable banking principles with a focus on economic, social and environmental and governance issues, to boost reputation and investor confidence, saying “the economic state calls for an opportunity for digital transformation and growth in ebanking offerings,” Mr. Aku admonished the need to increase investments in cyber security to reduce fraud risk.
In his advice to capital markets, Aku urged them to “Support the creation of new funding mechanisms to support economic recovery, work with regulatory and market shareholders to create incentives that support the growth of a green economy, ensure that listed companies report on compliance with environmental, social and corporate governance criteria and enhance capacity building and knowledge enhancement in sustainable finance,” he concluded.
Other speakers at the event included Mrs. Mosun Belo-Olusoga, HCIB, Former Chairman, Access Bank Plc; Mr. Simon Thompson, Chief Executive, Chartered Bankers Institute, UK; and Mr. Ibrahim Salau, ERSM Nigeria Programme Coordinator, International Finance Corporation (IFC).
It would be recalled that the harsh economic downturn which the COVID-19 lockdown and restrictions has caused businesses across the world has been huge with companies laying off their staff, including banks and financial institutions.
This was even made worse with the drop in crude oil prices .
Many companies are currently under lock and key, with debts and liabilities accruing, plunging the economy closer to a shutdown.
