Wema Bank is on a great mission: the bank wants you to know about ALAT, its digital (mobile) banking solution, even more than the bank itself. It does seem that the bank has decided on what its future will be, and that future is ALAT. If you drive through 3rd Mainland Bridge, Lagos, you will see the ALAT advertisements with barely noticeable logo of Wema Bank. They are positioning ALAT as the future, even providing a website for it, the alat.ng. The following notes are evident with regards to Wema Bank’s ALAT:
- Strong Promotion: Wema Bank is promoting ALAT more than the bank itself. I do think over time, the brand ALAT will become bigger than Wema Bank, and Wema Bank will fold into ALAT. Simply, Wema Bank wants the young people to know about ALAT, and not necessarily Wema Bank.
- Unique Domain: The bank is one of the few banks in Africa that created a unique domain for its mobile banking solution. This means that ALAT itself is expected to become a bank, but without the traditional branches.
- Strong Digital Future: Wema Bank is banking on a strong digital future. And ALAT will provide that to it. They have invested massively to create this product and are also doing more to make people know about it. It offers some of the best deals in African banking with 10% interest rate ( I noticed that one on 3rd Mainland Bridge). This is the future of Wema Bank.
Wema Bank is brilliant on what it is doing with ALAT. I have noted in the past that one of the ways of dealing with the heavy regulations banks face is to create separate fintech companies and run them to support the bank products. In other words, a bank creates a fintech company that markets its products, even when doing other things. The advantage is that the fintech can move fast, without the regulatory challenge. While a fintech can use a press release to be in 54 African countries at once, a bank has to work with the respective central banks before it can operate in the countries. That gives the fintech firms the advantage to move fast and corner the opportunities. But if a bank has its own fintech, sequestered from its operations, and complying with regulations, it can compete more fiercely with the fintechs.
ALAT is the first step for Wema Bank. In the next few years, depending on its progress, ALAT can be divested from Wema Bank, to allow it to compete more aggressively in the African market without being tethered to a bank and the associated regulation. The regulation is important and there is nothing wrong with that: banks like Wema Bank take customer deposits, unlike most fintechs, and should be regulated. So, ALAT can become an operational arm of Wema Bank while the bank remains a dumb pipeline, typical of most traditional banks today (i.e. not much intelligence due to lack of deep insights), to support what that modern banking named ALAT does. Perhaps in 10 years, Wema Bank may even simply change its name to ALAT if this new modern banking solution evolves into its future.
ALAT is a bank, and it can become a truly African banking institution, if it pursues new opportunities in Africa, with growth typical in most highly scalable businesses. I am expecting the management to make ALAT a pan-African “bank”, and use it to redesign the banking experience for young people which it continues to pursue. Wema Bank is working. It is on ALAT now and that is a good thing.---