My First Day in America and Kindness of Diamond Bank Lagos

By

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July 23, 2017

I resigned from Diamond Bank on January 7, 2003. I flew Nigerian Airways direct to New York on the same day. I had come for a master’s program, in electrical engineering, in Tuskegee University, USA.

Few weeks ago, I had applied for a study leave with Diamond Bank. The bank declined my application. It was very painful, but I respected the decision because Diamond Bank had been supremely good to me. With no study leave, I was leaving Nigeria with no hedge – succeed in America or come back, to Lagos, to look for a new job.

At the end, I made the decision to travel despite the bank’s decision. I wanted to return to electrical/electronics which I enjoyed while in Federal University of Technology, Owerri (FUTO), as an undergraduate. I had taken two master’s degrees and a correspondence doctoral program within three years I was employed, full time, in Diamond Bank. It was a very intense lifestyle which saw me one day flying into University of Calabar, from Lagos, for an MBA exam, and returning same day to work night shift in the bank’s IT organization. Everything was planned because I always had exams or certifications to prepare. Call it No Life: It was very intense.

Why this torture? Diamond Bank was paying for everything. They paid for the Cisco and Microsoft certification exams. They paid for the ICAN Intermediate exam which I had added in case I had to remain in Nigerian banking. (My matrix of Nigerian bank executives showed most had ICAN; so, I assumed, to get to the top, it made sense to get mine. I never completed ICAN before I left Nigeria. But I did well in the Foundation and Intermediate phases.) Diamond Bank HR people liked me. I had my nickname “Prof” which Ohis Ohiwere (now an Executive Director with GTBank) gave me while in the training school.

My goal of traveling to U.S. was to learn as much as possible, become a thought-leader, and then possibly start my own electronics design company supported with technology advisory services. The dotcom burst had taught me a big lesson: IT is a vulnerable career. I figured that electronics was higher up in the pyramid, making the systems, which anchor IT applications. And consulting could be exciting, because I would be forced to know many things, at deeper level. I decided that a PhD in electrical electronics would be catalytic in the process.

A classmate during my Master’s program in Federal University of Technology, Akure (FUTA), who left for a Master’s program in U.S., handled all aspects of the admission process. I just sent my transcripts to the school and within weeks, the admission letter came. The visa process went smoothly. UK had issued me one few weeks before for my convocation ceremony in the correspondence school. I was ready for America.

The Special Day in Diamond Bank

On the D-Day to resign, I typed my letter, which I had worked for more than three weeks. I wanted to use the opportunity to thank the bank and especially our Founder (legendary banker Paschal Dozie). Mr Dozie had a huge influence in my life. When I joined his bank, I did not know how to sign a cheque. Yes, I opened my first bank account, savings in Union Bank, few days after I started work. (Diamond Bank opened a staff account by default.) But through Diamond Bank Apapa Training School, one of the best training programs, in Nigeria, I became a banker. The transformation was iconic.

That was my memory including an insane compensation where just working for weekends and nights, I made what my non-IT colleagues in the bank would struggle for a month-long salary. Largely, I earned nearly twice my non-IT colleagues in the same level. I enjoyed Diamond Bank; it was a bank with limitless opportunities. They paid every training invoice I sent to them and the bank was awesome. There was no boss; we were all comrades serving Nigerians. In short, I never saw my supervisors as bosses; they were colleagues and they made spending 48 hours at work normal. (We liked those marathons because that was the only way to enjoy one of the top Ikoyi hotels and eat awesome meals, free.)

My Tuskegee University transcript. I was an American straight A student

Tuskegee University certificate, my first in America

But I had to leave, for America. And now, it is my turn to show the love, to the beautiful bank, named Diamond.

On the day of resignation, Diamond Bank paid tons of money into my account. Money everywhere with the computer screen showing useful digits. That was the annual upfront which was always the bulk of the salary. When I logged into the system and saw the money, I simply updated the resignation letter. I added an instruction that the bank should reverse the transaction as I was leaving the country, and would not be around to earn it. I dropped the letter. Most of my supervisors were genuinely impressed. Most people that resigned and traveled abroad usually clear-up. In minutes, I was off the building. My eyes turned red. I had to pay school fees in coming days in America and had not really developed a strategy than simply planning to meet the University President to award me scholarship. It was totally reckless as I practically invested all money I had in Treasury Bills and left with $400 cash and $2,000 Travelers Cheque.

At JFK, New York

I arrived JFK Airport, New York, without a sweater or any winter cloth. I came with my friend Kunle. As we exited the airport, I asked him “Okemadu, what is going on? Why so much cold here?” We went back to the airport hoping the cold will subside. No way. (Blame my geography; you could read all you can about weather; experiencing winter was more than any words any teacher in Nigeria could have impacted in a Geography class. Winter was ferocious, on blood stream, unprecedented on the first day I experienced it. )

Then, we got confidence to attack the cold with our t-shirts from Lagos (we flew direct from Lagos to New York). The problem was we could not pronounce “Tuskegee” in the Tuskegee University with our nice Nigerian accent. We asked more than three people, no one could understand what we were talking about.

We then met one African American and asked him how we could get to Tuskegee University. I was so frightened that I could not say anything audible. The guy said “talk to me, dude. Talk to me”. Then he walked out. I was wasting his time. People, the cold had gone because something more than cold had arrived. Accent playing us here!

An idea came – why not write it down and show it to people to assist on how to get to the school. Quickly, somebody told us to go to Greyhound, a bus line. I paid $103 from New York and spent about 3 days to Tuskegee on the road. It was really good except when they stopped in a cheese-eatery. I saw the thing, paid $4, and put it in my mouth. I never tasted it again. From Charlotte ( North Carolina) via Richmond, (Virginia) connecting Atlanta (Georgia) we made it to Tuskegee, Alabama.

But there was a miracle: at Richmond where we changed bus, a conductor, who loaded my luggage (those good days you could carry you life) asked for a tip. People, I had no idea you needed to give somebody something for doing his job. Even if I knew, I had none, to give the guy. Unbelievable, the guy dropped one of my bags, out of the bus, at the last phase of the loading. It was when the bus was making a turn to leave that my friend Kunle shouted ‘Driver stop”. One of my bags was outside. He rushed out and put it back. That was my first lesson in America: shine your eyes. This is not Hollywood with all the smiling celebrities living in splendor and wealth. I was educated to know that Hollywood was a screen set, but I did not expect the level of poverty I saw in New York Greyhound bus station – beggars in abundance.

When we entered Tuskegee, I quickly noticed one thing: every human element visible was black. I said to my friend: “boy, are we in Lagos? What is happening? I thought we came to America?” It turns out that Tuskegee is a black community with excess of 95% black population. The university is a historically black school. People, the campus is beautiful and a national historic site, meaning, the U.S. government turned the school, into a national museum. Tuskegee has history – the Tuskegee airmen, Washington Carver genius lab, and more.

Ndubuisi, my friend that managed my admission had visited Nigeria and gave instructions that we should move into his apartment. I had my Ikeja CDs which I had used to setup/configure/clone computers for people, in Lagos. I explained to my friend that I would start the business immediately. Quickly, he reminded that Ikeja Computer Village CDs would send me to jail. Just like that, I was empty. No hustle. He reminded me that my visa noted that I could not work outside the campus. That was the first time I cared to check what was written in the visa about working. Just like that, the expertise from banking was muted.

NASA Scholarship

When I made it to Tuskegee University, I had school fees of about $9,000 to settle. I scheduled an appointment to meet the Chair of the department. I explained to him that I needed his support. He told me: “You need to get the bucks from Lagos and pay this school fees”. I left. The next day, I returned to meet him again. He told me to wait at the door. I told him that I wanted to negotiate how this could be managed: I wanted a job to teach so that he could pay. At the end, nothing worked.

Then an idea came to me: what could I do in this school to add value to the department. At the end, I decided to craft an IT Policy with Physical & Cyber Security Manual for the department IT infrastructure. It was a huge coincidence. They were about awarding a contract on that because some people have been stealing their equipment and corrupting the PCs with viruses. In Diamond Bank, at a time, I was responsible for protecting all the PCs from virus and I knew the work very well. I spent two days working on the document, asking current students on what they knew about the systems.

I went back to the Chair and told him that I had a gift for the department: he looked at me as I handed him a document. He smiled. A professor and eminently a nice guy: he asked, how long did this take you? I explained that it took me two days but noted that my career had focused on developing this type of document. I showed him a copy of my old Diamond Bank business card to give him confidence – if a bank could depend on me, the department should be fine. He offered me a seat and then asked me to drop my contacts. I did and left.

As I was going back, I saw a poster for NASA scholarship. I applied. Few days later, I got it. Also, I was offered a graduate teaching assistantship. The NASA scholarship became a turning point for me in America. It opened so many opportunities. I was working on modeling high frequency and high voltage in the space environment with direct support from NASA engineers in Huntsville, Alabama. I designed a transformer that could work in the space, with the help of the research team.

America is now paying the school fees. They will forever be doing because when I later moved to the Johns Hopkins University for my PhD, I got many multiples, in fellowships and scholarships.

The Reward from Diamond Bank

One afternoon, in Tuskegee, I received an email. The bank was looking how to send me some money and they needed a current account. I told them that I have none in Nigeria. The only bank account I maintained in Nigeria was a Union Bank Savings Account. They requested the details.

Two weeks later, they sent me DHL that they could not pay into the Savings Account (that time only the account owner could pay money into Savings). They now asked me for permission to use Money Market to send that money. Of course, I gave that via email.

But why send me money? Pascal Dozie, the Founder and then CEO of Diamond Bank, on reading my resignation letter, approved for the bank to allow me keep the upfront. A friend told me that he was very happy that he had trained a young Nigerian with the integrity Diamond Bank should be proud of. My GM, who was on vacation when I left, also sent his own goodwill.

Diamond Bank staff did all to give me the money

Connecting to my Executive Director

In 2015, my U.S. firm was invited to make a presentation in a Strategy Session. In that meeting was my former Executive Director in Diamond – Phillips Oduoza, then CEO of United Bank for Africa Plc. When I took the podium, I greeted him, and thanked him for a favour many years ago. He was the ED, Operations & Technology, when I was in Diamond Bank; he ran IT where I was one of the foot soldiers. He asked one question and quickly recollected that he got my letter and he pushed for me to keep the money. Seating not far from him was Mr. R. Awo-Osagie, my former Diamond Bank boss, now the CTO of UBA. Right there, they praised my integrity and all the Directors in UBA quickly had a positive view of my person. As I left that day, many came and commended that spirit for Nigeria. Needless to say that I received the consultancy job,despite the presence of many MNCs that competed along with me. I am truly honored.

Lessons in Life

Life revolves around. You cannot afford to lose your integrity despite any situation or condition. All my colleagues in bank trust me and they continue to assist my business. I walk into offices; people that knew me will say “If he says YES, believe it”. And to Lagos banker, Pascal Dozie, he is a legend to me. I pray for him. He built a generation of people through Diamond Bank. He taught me humility in life. He was a man so exalted, and yet humble. The Diamond Bank training school is the best training I have ever attended. The recommended books, including The Richest Man in Babylon, shaped the core of my personal financial strategy. He invested so much to have leaders in banking and community. I admire him. And in all, thank God.

Bank of ICT, Nigeria

By

Ndubuisi Ekekwe

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July 22, 2017

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In this video, I share how the Bank of ICT which the Nigerian government is establishing, could be structured. You can read the supporting text here.

The Exciting mVisa And Challenge for African Fintechs

By

Ndubuisi Ekekwe

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July 22, 2017

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Visa, the global payment processor, is deepening capabilities in Africa. It has pursued many strategies in the past, with varying levels of success, but the introduction of mVisa seems to be changing the game.

Simply, mVisa is offering what any decent fintech in Africa will promise to offer the banks. But Visa wants to do it by itself, making it harder for the fintechs to find an opening to “plug” into the banks as they currently do. As I have written that it is an illusion for any fintech to imagine the disruption of Nigerian banks, in the short-term, this new product makes that perspective even more on the money. There is no bank in Africa which will not like to connect into this mVisa ecosystem, simply because most are already Visa partners.

For the fintech to take down and disrupt Nigerian banks, they must change the basis of competition. At the moment, they are sustaining innovators which are fortunate the incumbents are not doing what they are doing.

That is the problem for fintechs: they have the most important global fintech ahead of them in the partnerships with local banks

What is mVisa?

mVisa is a way to pay and be paid with phone. No need to fumble for change or hand-over your card to the merchant or queue up at your bank/ATM to deposit and withdraw cash. It is simply Scan, Pay & Go. That simplicity is huge, because with this, the acquisition cost of Post of Sale (PoS) terminal is gone.

With mVisa, consumers can directly access all of the funds in their bank accounts to pay merchants (person-to-merchant or P2M) or individuals (person-to-person or P2P). Because the transaction runs through the Visa network, the consumers and merchants do not need to be customers of the same bank or mobile operator. …Consumers can also use mVisa agents for domestic remittances as well as to access their cash if there is no ATM machine nearby. These features are intended to accelerate financial inclusion

According to a report by the Guardian, mVisa has been launched, in Nigeria, and Diamond Bank, Fidelity and First Bank attended the launch, and already on-boarded.

The solution will allow consumers in any part of Nigeria make payments, digitally, regardless of whether they use a smartphone or feature phone, said, Andrew Torre, president for Visa Sub-Saharan Africa at the launch in Lagos on Wednesday. Torre said, “Small and medium merchants in particular, no longer have to invest in expensive point of sale infrastructure as mVisa gives them the freedom to accept payments in a convenient, secure and affordable manner that their customers trust.

Why this is Huge

This is mobile money without mobile license. If every bank connects to it and customers can effectively pay without regard to where the bank account is domiciled, you suddenly have a new huge infrastructure that goes through Visa network. It is not clear what a fintech will offer considering that Visa will get scale as banks will like to join the network to serve their customers especially when they are traveling abroad. The fact that it can work on feature phone is a huge innovation.

Any African startup must have to deal with three issues:

Provide a clear alternative, at scale, larger than Visa, locally and internationally. We know that this will not be easy considering the scale of Visa.
Find other ways to engage the banks on mobile since the fintechs continue to plug into banks. The banks will like to ascertain that a proposal is huge to buy into it.
Remember, that mVisa can be integrated into the banks’ apps which means the banks are offering this from their own apps. A startup must demonstrate why a bank will make its own solution muted for a similar solution from a fintech.

Watch out for more banks across the continent joining. Visa has made life easy for them as they can easily integrate this and get to market fast. Visa handles many technical things for them while they focus on getting customers. For the very simple fact that mVisa is agnostic of the bank the customer account is located, and also supports feature phones, it is a huge challenge for local fintechs across Africa to overcome. The startups must have to change their games because partnerships with banks will be harder, as they are going mobile through mVisa, and may not see a reason to anchor a startup for for a product which is already in their apps.

Practical Ideas for proposed ICT Bank of Nigeria

By

Ndubuisi Ekekwe

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July 22, 2017

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Barr Adebayo Shittu, Nigeria Minister of Communications

Good job Barr Adebayo Shittu, Minister of Communications, Federal Republic of Nigeria. The Honourable minister works really hard. He has so many ideas and he is working. While I do not like the smart city initiative, I am in for his plan to establish an ICT Bank, as reported by the Guardian.

Adebayo Shittu, minister of Communications, has said the Federal Government will soon establish a specialized bank to cater for the development of the Information and Communications Technology industry.

Shittu who stated this at the 13th International Conference of the Nigeria Computer Society (NCS) in Abuja on Tuesday also disclosed that the proposed ICT University would take off in September.

Justifying the decision to establish an ICT development bank, Shittu said the regular banks cannot cater for the needs of operators in the ICT industry because of the time it takes to develop ICT products and services, from conception to market.

The minister said the proposed bank was provided for in the ICT Roadmap which, he said, has been approved by the Federal Executive Council.He said, “I am happy to inform you today that the Information and Communications Technology Roadmap has been approved by the Federal Executive Council.

The fact is clear: the present funding institutions are not structured for funding startups. Startups can go for years, without a single revenue. This means the commercial banks and Bank of Industry cannot help. Hence, what the Honourable minister is planning is a good one.

Here, I offer some perspectives on how our Honourable minister can make this bank deliver on its mission. It has to be totally different from Bank of Industry (BOI), which requires entrepreneurs, to get sureties, and in some cases collateral. to access capital The fact is this: only those with means can have access to those documents or assets.So, at the end, the people who may need the funds, never get support from BOI.

ICT works on brainpower and that must be recognized. That one does not have rich family members for sureties, or parents that own assets like land, which can be used as collateral, must not limit the individual.

Also, it has to be totally different from the way commercial banks support companies today. The 20% interest rate will not work, when startups have to build businesses over years, before they start making money. We need a new model to build this bank which is certainly going to play a huge role in our future. This week, I made a call for African Union to take action to accelerate such funding mechanisms, across the continent.

This is huge [Y Combinator $1 billion planned fund] and this will ensure the next generation of companies, indeed future Dropbox, Facebook, and Google, will be seeded in America. America is such a blessed country that its private companies can drive such national agenda. It is simply unprecedented at the scale they do this. As their President tweets tonight, he knows that some people are holding up for America, irrespective of whatever he will do tomorrow

We present core pillars for considerations by the Honourable Minister and his team as they craft this new bank:

Make the bank a clearing house: This means the bank will not invest directly by itself. Rather, the bank will pool the funds and invest in venture capital firms with locations in the specific regions in Nigeria where they will be investing. Venture Capitalists (VCs) will be required to have presence in the regions where they will invest and they must have capabilities beyond writing cheques.
Allow VCs to compete for the funds/Local Presence: The VCs can be local or international, but they must be located in the specific region of Nigeria where they have to invest.This is important as Nigerian startup problem is not just money. They need many things like mentoring, networks, linkages etc to get ahead.
VCs must De-risk the Bank: VCs must provide collateral, in different forms, to protect government as the funds are provided to them. We want only funds which are sure they are coming to invest, to join this game. And only funds with at least 3 years prior-investing experience can participate. Banks can be allowed to also participate but they must run it separately from the way they run their current lending programs,
Offer Funds at 5% interest rate to VCs and Strategic Guarantee: VCs will take the loans at 5% interest rate with funds return due within 10 years. It is important the funds cost the VCs something so that they know they have to work. Government will also have to guarantee up to 75% of losses in seed funding phase, maximum of $20,000 and not more than 5 of such, pear year, for any VC. This is important to give them room to take more risks, instead of waiting for post-revenue startups. Other investments phases, above $20,000, will not have any government guarantee.
Tax Holiday: Every VC will have the opportunity to defer paying taxes from the profit arising from government fund for 10 years, provided those specific taxes are re-invested. That means if they make money from the government tax, they do not have to pay any tax on it provided they re-invest that waived tax into startups. For other funds, not connected to government support, government can also offer them the same. Please note that they can use the profits to do whatever they want. But only the taxes they could have paid to government is what I am proposing they avoid paying and put back to work
Investment Committee: VCs will have their investment committees and will run their businesses independently, but whenever they need to invest any money from the government-supported fund, they must inform the bank. Government will just record the transaction, nothing more. The VCs must be required to have independent investment committees, drawn from industry to ensure there is no corruption in the system.

The ICT Bank is a good idea, and must be managed to avoid bureaucratic mess. We have to structure it in such a way as to make it easier for our young people that need the funds to access the opportunities.

The Startup Incentive Construct

By

Ndubuisi Ekekwe

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July 21, 2017

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In this video piece, I explain why startups win, despite the efforts of older companies who challenge them in new areas they are pioneering. The older companies can come with money, experience and technology, but most times, they are solving problems, with the wrong incentives.

Consequently, they adjust the problems to accommodate their incentives and in the process, solve an entirely different problem, resulting in a loss. You read it from me: African and specifically Nigerian startups, you can win over the big players. Your incentives are different, and those are inherent advantages for you.

The established companies have what I have called Innovation Hangover which is an inertia to cannibalize existing revenue sources for new opportunities. See it this way: If you run a treasury operation in a bank which will yield $5,000 profit but your fintech unit (a subsidiary) can do the same for $200, would you dismantle that treasury unit, and allow the fintech unit to serve the public because one fintech startup has started offering the service for $200?

That is not what we do most times because of the revenue/profit hangover. So, what happens is this: to fix that problem, the bank has to create a new market friction, and try to solve it. Possibly, that new problem can yield for the bank $1,000 profit, and it can feel that it has innovated and has challenged the startup on pricing. Indeed, it could offer more features and services than what the fintech startup is offering for $200.

Yet, that is not the original friction which the standalone startup went for. Typically, over time, the startup can still win because the incumbent is hanging onto the established profits, and solving entirely new problems. I have called this Startup Incentive Construct.

*the GTBank Fintech in the video is just a way to explain the fintech effort of the bank. There is nothing official there.