Bob Diamond’s African banking outfit Atlas Mara is hoping to use cloud computing to integrate back office systems after buying up banks across the continent with funds from an IPO.
Ashish Thakkar, the British-Ugandan entrepreneur who co-founded the venture with the former Barclays chief executive in 2014, said cloud computing was a way to build an “integrated, scalable back office” without spending millions on a conventional technology centre.
“Traditionally a lot of banks have created their own technology infrastructure,” said Thakkar. “Technology has moved on.”
Thakkar, who founded his first IT business in Uganda at the age of 15, said the wider chance to use new technology in banking was a large part of why his own conglomerate, Mara Group, had joined forces with Bob Diamond´s Atlas merchant banking venture. He said providing financial services outside branches was a “huge opportunity” in a continent where only around 12% of people have a bank account, yet 80% have mobile phones.
But Thakkar said there was “a lot more that can be done” by using mobile phones for African retail and business financial services clients, beyond just mobile payments of the kind provided by the likes of Vodafone´s M-Pesa in Kenya. Mobile phone companies “have no desire” to get into lending businesses like mortgages, according to Thakkar.
“Smartphones in Africa are growing at a meteoric pace,” he said. Thakkar estimates a growth rate of around 100m smartphones a year in Africa, from 120m on the continent today. “You’ve got to position yourself for that market.”
Atlas Mara raised $325m in an IPO in London in late 2013. After raising a further $300m last year, it built up a 30% stake in Union Bank of Nigeria, spending $270m on a 20.9% stake last year after initially buying 9%. It has also announced investments in two Rwandan banks, and has made an acquisition of BancABC, a banking group spread across various parts of the Southern Africa Development Community.
Despite making its first half year profit this year, Atlas Mara is still trading at less than half its IPO value. Nevertheless, John Vitalo, the firm´s chief executive, said using cloud computing would help the group as it moved to the next stage after raising the equity and buying the banks. “We´re building a banking group; we´re not just a fund that’s investing in banks,” said Vitalo.
“We’re people that run banks. That means integrating them along a number of axes – governance, controls, financial control. Integration in technology is an important part of being an integrated banking group. Cloud computing makes integrating primarily standalone banks faster and more effective.”