I was still in secondary school when Diamond Bank introduced its peerless and highly acclaimed Diamond Integrated Banking System (DIBS) in early 1990s – a solution that made it possible that you can operate your bank account irrespective of the domicile. Before DIBS, in a world dominated by First Bank, Union Bank and defunct Afribank, if you have an account in Aba and you happen to be in Lagos, to get your money, you must physically return to Aba branch of the bank.
For most businesspeople, there was no need of running bank accounts; they moved with their Alvan Ikokus. As Lomaji Ugorji helped us in his memorable adverts for defunct Equatorial Trust Bank, going to a bank was only possible if you could go with your mat. Yes, spending a whole day – 6 hours – to get money from your account was typical.
As I have written, DIBS reduced armed robbery along Onitsha-Lagos road more than any effort put by the Nigerian Police. How? Merchants would open accounts in Diamond Bank Onitsha branch. They would travel with their cheque books to Lagos. Reaching Idumota and Alaba, they would go to the bank’s branches to collect their monies. Magically, robbers who robbed luxurious buses like Young Shall Grow and Chisco which used to carry tons of cash would not find cash! With success factor very low, many criminals exited the routes at scale.
I really love this bank; I worked in Diamond Bank. It is a matchless institution when I was there. I was extremely motivated to work in the bank because it was extremely innovative. That was the only interview I ever attended in Nigeria and the only job I applied post-graduation. The other job offers came without interviews typical for class best graduating students in Federal University of Technology Owerri. I remain thankful they hired me.
Fast-forward, the bank is at a new game: human-platform banking. People call this agency banking. That is fair, but for me, it goes beyond agents if you read one of the key components of the CLOSA account (the bolded section below).
“Part of our activities in this space include the development of products such as the BETA and CLOSA accounts. BETA targets market traders and also supports small and medium enterprises (SMEs). The BETA account employs agents (called BETA friends) who go to the areas of comfort of these market traders and offer them all the financial services they need without impacting on their way of life, whilst the CLOSA account was created for those without Banks in their areas. People of influence in the community were selected to act as agents of the bank to ensure trust and those in the community were assured that the Bank would assume responsibility for their money once it was deposited with the agents.” Diamond Bank
In most parts of the world, you would build digital platforms to build that intermediation between partners (see my Aggregation Construct). But in Nigeria, we are way behind on the enabling infrastructures and elements for such. Yes, many of our citizens are not yet in digital ecosystems. So, to fix that problem and drive financial inclusion, the bank is seeding the human equivalents of those digital platforms. The “people of influence” like headmasters, imans, and local preachers would become the platforms between the bank and their customers.
Diamond Bank redesigned Nigerian banking with technology by inventing DIBS, a perception product as I have noted many times. It wants to re-invent it in a new way. With this human element, pioneering at scale human-platform banking, the agency banking will pick up massively.
Agency banking with proprietary technology supported with tokens, phones, BVN and mobile kiosks will deliver the magic. The transactions will be capped to avoid fraud and risk-management tools embedded. As these agency banking systems mature, banks can close and sell off expensive branches which may not be necessary in 5 years as the immersive digital economy evolves.
The path to onboard many Nigerians into the financial systems would involve reaching them at the levels they are, right now. It may involve thinking less of bytes and more of atoms. Yes, human-platform banking over digital-platform banking.