Bunna International Bank (BIB) announced the selection of Finacle core banking solution, from Infosys, last Thursday for an undisclosed sum. The software will enable the bank to integrate its front and back office operations by deploying a state-of-the-art loan organisation system.
This will include automating the credit check and loan approval processes for risk-free and efficient loan disbursement. This is the first time Infosys, an Indian financial service technology firm, won a bid to automate banking services in Ethiopia.
“The event is historic because the selection of a technology partner in banking is a make or break event. Some even liken it to a choice in marriage. One misstep has far reaching consequences on the growth of a bank,” said Eshetu Fantaye, President of BIB.
Infosys Finacle software is being used by more than 80 banks globally, out of which 25 are in Africa. Bunna will be the 25th bank to operate using this software. The core banking solution will ensure faster processing of front and back office requests by improving turnaround time of customers.
“In the present banking environment, core banking solution is no more a matter of competitive advantage. It is the quintessential platform all bank customers expect. In Ethiopia’s case, it has become a prerequisite by the regulatory body,” added Eshetu.
The National Bank of Ethiopia ordered banks in the country to automate their services. Part of the order calls for a National Payment System to facilitate automated settlements and inter-bank money transfers. The award to Infosys is meant to facilitate real-time processing of transactions and settlements of payments which sets the stage for future innovations like mobile wallets and agency banking.
“Our selection of Infosys goes beyond core banking solution. We are a small but very ambitious bank poised to fulfill our destiny; becoming the most accessible bank in Ethiopia. As we have found out, Infosys is the right partner in the steps we take to realize our destiny,” stated the president.
The decision to select Infosys was to ensure the bank’s ability to provide convenient and affordable service, an ambition to deliver cost effective, unique products and services to create a nimble and efficient bank by complying with the regulations set by the National Bank of Ethiopia, said the president.
“In the Journey we undertook in selecting a partner, we have found out that the solution to our ambitious endeavor was incorporated in the Infosys software, Finacle. Our wish is also to bring to our operation core banking services in less time, budget and pain which the banking sector has witnessed,” concluded the president.
Bunna officially commenced its operations in October 2009. It had a subscribed and paid up capital of birr 308 million and birr 156 million, respectively. It has more than 11,200 shareholders which makes the bank a broad-based one, when compared to other private banks in Ethiopia. In its successful three years service in the banking industry of the country, Bunna has reported a profit, after taxes, of 30.03 million birr in the 2011/12 fiscal year. This is a 54.7 percent increase from the 19.4 million birr it collected the previous year. Bunna’s registered assets are worth 1. 4 billion birr and its paid up capital had reached 252.5 million birr by the end of the last fiscal year. The bank plans to raise its capital by 75 million birr annually to reach 600 million in 2016, to pass the NBE’s minimum capital threshold of 500 million birr. It also plans on expanding its network to increase its branches to 35, which will almost double its present capacity, within this financial year.
“Being chosen as Bunna’s long-term technology partner is an exciting opportunity for us. As a forward-looking bank, it has rightly chosen technology as a lever or tool to power business transformation and growth. Finacle is the technology platform that can serve as an effective foundation for Bunna and other banks in Ethiopia as they find ways to engage more customers,” said Amit Dua, Associate Vice President and Head of Client Services at Infosys.
Forbes magazine placed Infosys in 19th place when ranked among the top 100 most innovative companies. As a provider of next-generation technology, consulting and outsourcing solutions, Infosys supports clients in more than 30 countries. Infosys partnered with MKTY IT Services Plc, a local IT company. MKTY has been active in delivering technology-driven business solutions for the banking and financial services industry in Ethiopia since 1994.