👨🏿‍🚀TechCabal Daily – Ride-Hailing Woes and Banking Trends

How do the rich stay rich? By shrewdly keeping an eye on costs and ruthlessly pruning anything that may become a drag on their finances later.

That’s the story of Nigeria’s biggest commercial banks which reported a combined ₦9.51 trillion ($5.7 million) in profits in 2023. Some tier-1 banks briefly hit ₦1 trillion (($608 million) in market capitalisation despite Nigeria’s macroeconomic conditions.

Nigeria’s big banks have perfected the art of eking out profits regardless of the economic conditions and USD-denominated costs are the current enemy of that goal. The decision to float the naira has significantly increased technology costs; think storage, software licensing, and even hardware. 

While banks are notoriously conservative businesses, we’re seeing some flexibility in how they’re thinking about technology costs. On Monday, Sterling Bank formally announced its move to SeaBaaS, a new core banking application. One person suggested that cost consideration may have played a part in the decision to have its custom software. 

Beyond software, local cloud players are also finding joy pitching to companies. With more competitive pricing than major cloud service providers, big organizations are trying new entities. 

Huawei, the Chinese enterprise company that went from upstart to a dominant player in the telecoms market, is also seeing and taking opportunities in the Nigerian banking space.

Here’s an excerpt about how Huawei sold some storage to United Bank for Africa (UBA), a tier-1 commercial bank; 

“They lure customers in with the option of a free-to-use one-year solution,” said one cloud engineer at another tier-1 bank, citing Huawei’s extended proof of concept that allowed banks to use specific solutions for free.

“No one else will offer you a one-year proof of concept,” another cloud engineer said. 

Read about it here.