Transaction bank profiles: Ecobank
Ecobank’s transaction banking business in Africa has risen lock-step with the progress of the bank over the last five years, shooting up Euromoney’s Africa rankings. Now it needs to make its network pay.
Ecobank is particularly well placed to support what is expected to be one of the main global trends over the next decade and beyond: rising foreign investment in Africa and African investment in the wider world.
As a pan-African bank with an extensive network in the continent’s main economies, it can offer foreign companies of all sizes the level of local knowledge and expertise they need on the ground, capabilities that few global banks can muster.
And with deepening relationships with some of Africa’s largest and fastest growing companies and an international network of banking partnerships, Ecobank can support their ambitions for foreign growth too.
Patrick Gutmann, group head of transaction services at Ecobank, says: “In the last few years we have built a lot of capability into the business and invested substantial time and resources in the platforms we need. So over the next couple of years, as a result of the investments we have made, we believe there will be a significant jump in the size and scale of business that we do in transaction banking.”
Gutmann is confident that this well help the bank continue to gain market share. “We do feel now we have the platforms, team and capabilities in place to take this business forward and support our clients as they grow. Our strength is not just in enabling cross-border capital flows in and out of Africa but also within Africa itself. The potential there in both directions is huge.”
In its own right
Ecobank has also invested heavily in its operations and platform. “At the end of 2012 the decision was taken to take out the transaction services business that had existed before in Ecobank’s corporate banking business and make it a standalone business in its own right within the bank,” says Gutmann. “There was a need to do this so that it could be transformed from being a product or support function to being a business in its own right and one actively managed at the highest level.”
It’s a decision that is paying off for the bank and winning it recognition among non-financial corporate clients. From being ranked 34th best cash manager in Africa in 2010, Ecobank has shot up the rankings in each of the following years, and this year is ranked eighth.
|There is a real desire
to bring the same level of services corporate clients
have outside of
Africa to Africa
Such progress, according to Gutmann, is largely down to Ecobank’s deep local knowledge of all the markets that it operates in.
“This gives us the ability to offer a solution across the network, as well as the ability to offer local insight, guidance and advisory in certain markets that other banks are simply not able to provide,” says Gutmann. “In addition, Ecobank is a full-franchise bank, which means we can support large corporates, international organizations, financial institutions, local corporates and SMEs in everything they may need in banking services.”
Ecobank has youth on its side too.
“Our technology platforms are also a strength because Ecobank is a relatively young bank – about 25 years old – and we have invested quite heavily in our IT infrastructure in recent years,” says Gutmann.
“We run everything from off a single, core banking platform, and we run a single corporate channel for clients, which we call Ecobank Omni.”
Gutmann adds: “That means our proposition and the interaction we have with our clients through these channels is consistent across our entire network. It also means our clients have full visibility and access to transact across the full network. Compared to older banks, which face huge challenges around their legacy IT infrastructure, we have a more simpler, more efficient and newer IT platform. This gives us an advantage and allows us to be more nimble and provide a more unified and consistent experience to our corporate clients and across multiple markets.”
Gutmann says mobile technology is a priority for Ecobank and its corporate clients, especially in enhancing “efficiencies for our corporate clients around payments and receivables”.
He adds that the bank has seen a big shift in the level of sophistication of its clients in Africa, especially around some of the services and solutions that are readily available in the US, Europe and Asia, such as host-to-host integration and liquidity management solutions, “although there are still quite a few regulatory hurdles to navigate here in Africa,” he says.
“These are the types of discussions that a few years ago were not as prevalent as they are today,” says Gutmann. “So there is a real desire to bring the same level of services corporate clients have outside of Africa to Africa. To a large extent the technology is now there and certainly the ability to implement these solutions is now very much in place.”