8 | The Lion King
B
anking is generally about
following the money. But
sometimes, the money
trail gets cold in the chase for
bigger and bigger deals. Losing
the money trail can be costly,
so smart bankers have set up
special units to follow the money
trail. They are stylishly called the
Value-Chain bankers. In practice,
they are money dogs, who follow
the scent of money and ensure
they are able to provide financial
services to everyone on the
money trail.
Value chain bankers are only
driven by one question,
and one question
only “Where is the
money?” Their
business model is
captured in their
mission
statement
“Follow
the money
and
bank the
customer
of your
customers”
Kalu, a value
chain banker
with UBA
explains what
they do: “Our
job is to follow
the cash cycle.
For example,
my bank opens
an account for
an oil marketing
company. My job is to
immediately ask; who are
the dealers that deposit sales
proceeds and the transporters
that receive payment from the
oil marketing company? They
are on the value chain of the
oil marketing company. Others
are the employees. Where is
the salary accounts of the oil
company domiciled, how do
they and to whom in which bank
do they pay their statutory fees
like taxes and levies? My job is to
trace the value chain and bank
everyone on the value chain.”
The idea, says Gbenga, another
UBA staff who works in the Value
Chain unit of the bank is “to
trap low cost deposits and do
more ancillary businesses with
the main account holder. For
example, if we are able to help
the oil marketing company
manage all their collections
from their customers, we will
get more of their transactions,
since it will simplify their financial
operations.”
Value Chain banking is however
not just targeted at corporate
customers. Retail customers are
also included as the bank seeks
to capture all their transactions
and create a banking
convenience for all of them.
Kalu further explains how retail
customers fit into the value chain
model. “For retail customers, our
goal is to ensure that all their
payments to other accounts do
not go outside UBA. So, if they
have brothers, sisters, relatives
and friends that they seek to
transfer money to, then we
want all those people to have
an account with the bank.
We want everyone who has a
UBA account, to as much as
possible; do all his or her financial
transactions within the UBA
Group.”
“It is not just cash transfers to
other accounts that we target,”
explains Gbenga. “We also
want all our retail customers to
pay their bills, like cable TV bills,
energy bills, phone usage bills
and any other bills to accounts
domiciled with UBA. What we are
offering is a One-Stop banking
model.”
The value chain banking offers
many benefits to the bank and its
customers. For the bank, Value
Chain banking is a good avenue
to mobilize low cost deposits,
and also retain as much of its
mobilized deposits as possible
within its vaults. It also deepens
the bank’s relationship with its
customers, be they corporate or
retail customers as it establishes
a network of relationships that
support each other.
For customers, value chain
banking offers unrivalled
convenience. For a corporate
customer, value chain banking
may mean the ability to track
all collections from customers
and also make all payments
to all suppliers through a single
platform. This can produce
significant gains in corporate
cash flow management which
translates into efficiencies in the
production process.
Retail customers under the
value chain model also have
the advantage of being able
to manage all their financial
transactions on a single platform.
This enhances their budgeting
and cash management.
Value chain banking is all
about “meeting the entire
customer’s need. It is about
being a one-stop bank to your
customers” says Kalu.
Following the
scent of money
By Gbenga Alade & Kalu Uko
Theme Story
