Oct 24 , 2020

The Tier III data centre will be built at the 32-storey building of the Bank located in the Financial District. The building currently has reached its finishing stage.

Nib International Bank (NIB) has initiated a massive expansion of its digital banking system and infrastructure with an estimated investment of 350 million Br. With the latest expansion, the Bank will upgrade its core banking solution and kickoff new digital banking products.

The two-decade-old Bank began the expansion following the recommendations forwarded by KPMG East Africa Limited, a firm that was hired to design and formulate the management strategy. The Bank hired the company two years ago for an estimated 20 million Br to design a five-year strategic plan, a 10-year strategic road map, and to study the organisational restructuring of Nib.

One of the pillars of the strategy is aggressively working on digital banking, according to Assefa Yeshanew, vice president of Nib in charge of information systems. The strategy has two documents, namely a diagnosis report and a way forward that recommends a digital transformation, according to him.

Outlined by five major components, the Bank plans to complete the digital transformation in two years. The board of directors of the Bank, chaired by Woldetensai W. Giorgis, approved the budget for the projects.

"We're heading to virtual and self serve banking services," said Assefa. "We're getting closer to our customers."

The major part of the expansion is upgrading the core banking solution, which networks the Bank's services and branches. Expected to be operational in four months, the core banking solution dubbed "T24 Version 2020" was supplied by Temenos Group, a Geneva-based software provider that specialises in enterprise software for banks and financial service firms.

United System Integrators (USI), a local firm, implemented T24, making Nib the fifth bank to have the latest version. So far, Bank of Abyssinia, the Commercial Bank of Ethiopia, Cooperative Bank of Oromia and the Development Bank of Ethiopia have upgraded their core banking to the latest version.

"We used a latecomer advantage in employing the latest version," said Assefa.

The core banking solution, which integrated the 320 branches of the Bank, replaces the eight-year-old digital system that was supplied by Temenos itself. The old system, dubbed Star Bank, was supplied by Eta-Info Tech, a Dubai-based software company in 2006.

Started four months ago, the process of integrating the new solution is being undertaken by the project office of the Bank, whose 38 team members currently reside in a building of the Bank located in Arat Kilo. Nib procured the building three years ago for 680 million Br.  The entire integration and testing process is expected to take eight months.

Nib's upgraded core banking solution covers financial intelligence, mobile and internet banking, the customer relationship management system and interest-free banking. It went through the initiation stage, system analysis, building stage and cloud installation.

"It'll enable us to transact with third-party payment aggregators seemlessly," Assefa told Fortune.

The second component of the digital transformation of Nib consists of upgrading and integrating the infrastructure of the Bank, including its servers, computers, storage and computing switch. To hire a company that will provide the service, the Bank has already started the procurement process and reached a financial evaluation stage. Nib is replacing the existing system, which is outdated.

Under the third component, the Bank plans to work on a holistic and integrated e-banking solution. Driven by an omnichannel, a cross-channel content strategy used to improve user experience and drive better relationships, the system will enable Nib to launch wallet and agency banking services. The system will enable the Bank to collect utility payments, school fees and traffic fine payments among others. The Bank has released a request for proposal (RFP) inviting companies to supply the solution.

With the fourth component, Nib plans to build a Tier III data centre at its new building that is under construction. The 32-storey building with four basements is located in the Financial District and currently has reached its finishing stage.

The data centre will have a security operations centre, access control system and file operating system, as well as coming equipped with storage, redundant and dual-powered servers, network links and other IT components.

It is expected to commence operations in the next quarter, according to Assefa.

The last component of the investment is enhancing the network and infrastructure security of the Bank.

It seems there is an internal change in the Bank in which executives are becoming conscious of digital banking and rushing to keep up with the industry trend, according to Ibrahim Dawud, a digital and card banking expert with over two decades of experience in the industry.

"Whether we like it or not, there is a digital disruption in the banking industry," Ibrahim said. "And there is stiff competition in the industry since over 10 banks are lining up to join the business."

Ibrahim also says that the industry might not stay closed forever to foreign banks, and it could be opened if the existing severe foreign currency crunch lasts long.

"Getting ready for such kinds of developments is very essential," he said.

If the Bank has properly conducted a cost-benefit analysis of these investments, it's a wise decision, according to him.

PUBLISHED ON Oct 24,2020 [ VOL 21 , NO 1069]

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