The company entered the retail banking segment and gained additional market share after rolling out their pilot project with Software Group in Ghana
In our fifth issue of the SG Insider, we are pleased to introduce Mr. Daniel Goss, Group Executive Product and Channel Development, at Bayport Financial Services. We are discussing with Daniel the specifics of their business and how alternative delivery channels help elevate and transform their operations by entering the whole new segment of the retail banking. Bayport Financial Services currently has 10 operations situated on two continents – Africa and South America. The company has approximately 600 000 customers.
Hi Daniel, thank you for participating in the fifth issue of SG insider. Could you please tell us more about your company?
Bayport Financial Services currently has 10 operations located on two continents – Africa and South America. Our core lending products are split into two types – payroll and retail credit. The main part of our business is payroll lending. The way we collect installments for the loans is to provide companies with a deduction code and the repayments from the employees are collected at source. We have been lending for 15 years and we decided strategically that we wanted to be more than a payroll lending business. We want to become a financial solutions partner and provide customers with the full range of services they need to achieve financial wellness. Hence, we have been looking at the retail banking experience. Being a retail bank allows us to offer clients both savings and credit products as well as transacting ability. Our strategy is to make a transition in the business and offer payroll lending as one of the products within our retail offering.
Which were the challenges you were facing on the markets you operate in?
People sometimes view Africa as a homogeneous region but all of the countries have different challenges. So, it is impossible to generalize. As one of the biggest payroll lenders in most markets we serve, we had the challenge to grow our market share. It should be also noted that the payroll lending in some countries is only offered by government departments, not by private companies, which means that our market is limited to civil servants. Hence, we needed to look at other ways to expand our business and also to target the formal and informal sector.
How did you decide to pilot a delivery channels project and where did you start?
Before implementing the delivery channels we only had a core banking system. On the payroll side of the business – we had an in-house developed system and on the retail side – an external partner. Now, all of our systems speak to Software Group’s integration channel – UT Route which speaks to all of our other channel partners as well. Our services were delivered only by agents and branches. An agent will go out into the field, onboard the customer and literally bring them to the branch. Hence, about 4-5 years ago we decided to start a pilot project in one of the countries we are already operating in – Ghana. At that stage, we embarked on our relationship with you. We asked each other what the customers wanted and how we could create value for them. The first thing was to offer them a savings account. Then, we needed to provide them the ability to borrow and we started offering a secure retail credit. We allowed them to transact and also provided them with the ability to get insurance – such as health protection, school fees protection products, etc. This is effectively what we piloted in Ghana. The channels became crucial for our business and we realized that we want all of them to be integrated via common switch platform so we can control the customer experience from the back-end system. The pilot project we had was so successful that we see ourselves as a retail bank now. Our plan is to start applying these channels to the payroll lending side of our business as well.
What were the main reasons to select Software Group and could you please tell us more about your relationship with the company?
We started our communication with Software Group in 2014. It has been a good and evolving relationship. We were looking at something which was quick and easy to go to market. This was offered by Software Group. In 2015, we launched a pilot project together in Ghana which ended with a massive success. The scope included ATM management solution, third party ATMs integrations and a card management system. All these were controlled with a switch and allowed us to have a multichannel platform offering to the customer.
One of the things which attracted us to Software Group was the African footprint and the resources on the ground. The company has the ability to look at the market and anticipate what the clients’ needs are. Moreover, as we are growing so quickly, I believe that Software Group has reacted very positively to those demands.
We first saw the company as a switch provider but now we see it as a solution partner allowing us to grow some of our solutions in Ghana as well as in new markets for us. I believe that it is very advantageous to have one-stop-shop provider for all delivery channel solutions because we don’t have to worry about maintaining different integration points. Hence, I am confident that Software Group is the right partner to bring us to the next level of our journey.
Tell us more about the benefits after the implementation of delivery channels solutions.
We attracted over 150 000 new customers which is a pretty large number. These customers represent around 2,5% of the market which we gained for about 2 years. We had no retail business before, it was established when we launched the alternative delivery channels solutions by Software Group. They created a whole new universe for us which is much, much bigger.
Furthermore, the solutions from Software Group allow us to get closer to our customers. As technology evolves, customers are becoming more tech savvy and a lot of them have smartphones. The channels allow multiple ways for the clients to reach us and they can do that 24/7. We are also dealing with environments where travel is difficult for our customers. So, the more we can allow the clients to use self-service, and allow them to transact with us without the need to come to the branch, the better. We will not be able to have all that without a reliable delivery channels partner.
What are your growth plans?
The biggest goal for Bayport Financial Services is to convert from a payroll lender to a retail bank that is offering savings and credit and allows its customers to interact through a multichannel approach. This is our growth plan in the next 3 to 5 years. We are going to take these channels and apply them to our payroll lending business as well.