Insight
Our solutions provide the flexibility needed for a gradual and targeted transformation for an economically viable time-to-market.

Abidjan, November 27, 2023 – With over 25 years of experience in developing and integrating innovative banking solutions, Capital Banking Solutions holds a prominent position in the international market, especially in Africa. This interview delves into the company’s journey and achievements, as well as its commitment to innovation and the transformation of the banking sector.

During this interview, Samer Hanna, the Chief Executive Officer of Capital Banking Solutions, will share his vision for the future of financial services, emphasizing the significance of the Greenfield approach in a dynamically evolving African market. He will also address the challenges and opportunities associated with expanding banks in Africa, along with the competitive advantages of the company in a highly competitive sector.

This interview provides a comprehensive insight into how Capital Banking Solutions is shaping the future of banking in Africa and beyond, providing flexible solutions tailored to the changing needs of financial institutions. It also explores the company’s development prospects in a changing financial landscape marked by the emergence of new players and the increasing demand for digital financial services.

Sika Finance: Can you briefly introduce Capital Banking Solutions, its journey, and its current position in the banking solutions market?

Since 1997, Capital Banking Solutions has been developing and integrating innovative banking solutions tailored to various international banks. Leveraging our expertise, years of experience, and continuous research and development, we offer a wide range of innovative products to address the needs and challenges of the banking market, serving over 200 banks and financial institutions globally, spanning North America, South America, Europe, Africa, the Middle East, and Asia.

As a leader in universal banking, retail banking, corporate banking, private banking, Islamic banking, postal banking, treasury banking, as well as microfinance, neo-banks, family offices, and intermediary companies, we develop open-architecture, modular software available on the cloud or on-premise.

With a team of 300 experts based in France, Monaco, Switzerland, Lebanon, Ivory Coast, Morocco, Dubai, and the USA, we maintain close relationships with our clients to best support them in their projects.

Sika Finance: How has Capital Banking Solutions evolved since its inception, and what is its current product catalog?

Capital Banking Solutions has made significant strides since its establishment 25 years ago as a market leader in Africa. We commit to leveraging our banking experience for innovation by connecting and integrating banking systems to provide a comprehensive view of operations while adapting to market developments.

Our flagship product, CapitalBanker, is a versatile and comprehensive core banking system suitable for all types of banks and financial institutions. Complementing this, we have developed a range of standalone solutions, including CapitalDigital for next-gen omnichannel online banking, CapitalPrivate for private banking activity management, CapitalLending for digitalizing credit processes, and CapitalCompliance for anti-money laundering, tax evasion prevention, and regulatory compliance tailored to each region.

The current catalog also includes solutions like CapitalClearing for automated clearing processes and check digitization, CapitalReconciliation for automatic bank reconciliation, BanksAnalytics for decision-making dashboards, and SwiftManager for generating and integrating payment messages in ISO20022 standards.

All our products rely on CapitalConnect, the middleware platform with open APIs, fostering synergy between products and third-party entities. These products are designed to easily adapt to various banking information systems, reinforcing our market positioning.

Sika Finance: Among your products, you mention the core banking solution ‘CapitalBanker.’ Could you elaborate on its key role and impact on the market, especially in Africa?

Core banking solutions are comprehensive software dedicated to banks and financial institutions, covering a wide range of functionalities (management of reference data, clients, accounting, products, and associated transactions while complying with banking regulations).

Over 70% of African banks have chosen this option due to its ability to facilitate a quick and secure start to their banking activities.

At Capital Banking Solutions, we have been supporting the African banking market with our dedicated ERP for 25 years. Originally known as Orion and successful in West Africa, our technology allowed banks to have configurable software, providing the ability to develop their screens and modules. It ensured a unique development flexibility at that time.

In the early 2010s, we observed the market evolution on the continent with the growth of pan-African banks adopting centralized management models. Their major focus was on platform mutualization, requiring integration capabilities with related solutions. The intrinsic flexibility of our banking ERP facilitated our ability to support clients not only in West Africa but also in other countries on the continent.

2020 marked a major evolution in our product strategy. The new version of our core banking, now known as CapitalBanker, was developed to address the challenges of digitization, going beyond the availability of a mobile application. CapitalBanker is a modular, configurable, and composable software allowing each module to provide digital-oriented features like customer onboarding, credit instruction, scoring, financial analysis, compliance, and payments. With its integration layer CapitalConnect, CapitalBanker provides additional flexibility in integrating digital ecosystems using APIs.

Our ‘Composable Banking’ strategy allows us to evolve our clients’ information systems without requiring a core banking update, unlike other solutions that demand upgrades every three years for new features.

Finally, CapitalBanker caters to the evolving needs of banks regardless of the level of banking penetration in the country and the maturity level of the financial institution.

Sika Finance: What does your Greenfield strategy involve, and why would it be prioritized over investments aimed at strengthening the existing IT system in a bank?

A ‘greenfield’ project involves deployment without data migration, making it particularly suitable for new establishments in the creation phase.

When banks or financial institutions expand into Africa through a ‘greenfield’ approach, it implies creating new operations, branches, or subsidiaries in markets where they are not yet established.

Several clients have opted for expansion in this territory through the ‘greenfield’ strategy to capitalize on growth opportunities. However, this model requires careful planning, a deep understanding of the local market, and the ability to address region-specific challenges.

To best assist our clients in these challenges, we have developed pre-configured solution and component models called ‘Capital Bank Master.’ Integrating all necessary products and services, they comply with local requirements imposed by central banks and regulators.

These models are intended for financial institutions like retail banks, payment institutions, and microfinance institutions in the creation phase. They rely on a specific approach, ensuring an industrialized deployment methodology that allows us to complete projects in less than 3 months. Therefore, our clients benefit from an innovative, secure, localized, and scalable platform.

It was imperative for us to engage in this approach. Our major goal is to offer a comprehensive and cost-effective solution to support our clients in managing their Total Cost of Ownership (TCO), reducing operational risks, and, most importantly, contributing to the success of their development strategy, especially by promoting financial inclusion.

Sika Finance: In the context of the African market where you are very active, is such an option of great necessity? Why?

In addition to individual establishments in formation, this approach is also adopted by large pan-African groups eager to expand their presence regionally or continentally in Africa more rapidly.

This strategy aligns with an overall desire to address the challenges of accelerating financial inclusion.

In a more general sense, this expansion can present several challenges for banks and financial institutions:

  • Local market knowledge: One of the primary challenges for a bank expanding in a «greenfield» manner in Africa is to understand the local market (regulations, consumer preferences, local banking practices, etc.). This knowledge is essential for success in a new environment.
  • Local competition: Expanding banks must contend with fierce competition from established local banks, as well as international banks that are also present in Africa. Developing effective strategies to compete with these players is crucial.
  • Risk management: «Greenfield» expansion involves numerous risks (political, economic, and operational). Banks need to establish robust risk management mechanisms to address these potential challenges.
  • Financial inclusion: In many African countries, a significant proportion of the population lacks access to banking services. Expanding banks have the opportunity to promote financial inclusion by offering services to previously underserved population segments.
  • Corporate social responsibility and sustainability: Banks must also consider their social and environmental impact during expansion. They can play a role in the sustainable development of local communities and the promotion of responsible banking practices.
  • Local partnerships: Establishing partnerships with local institutions, businesses, and governments can be essential for successful «greenfield» expansion in Africa. These partnerships can facilitate market access and understanding of local dynamics.
  • Technology and innovation: Adopting advanced technologies and innovations in banking services can be a major asset for attracting a young and tech-savvy clientele in Africa. Banks need to invest in technology solutions tailored to the local market.
  • Talent management: Finding and retaining qualified local talent is a crucial challenge for successful expansion. Training and developing personnel are often necessary to meet the specific needs of the market.

In addition to our role in the technological dimension, where we provide support, we position ourselves as a true strategic partner to help our clients address the challenges associated with implementing a financial institution in «greenfield» mode.

Sika Finance: Like any change, there may be concerns about internal adoption of new tools and continuity of customer service (during the transition to a new solution). What do you have to say in response to these concerns?

Through this comprehensive deployment approach of a pre-configured model that integrates best practices in products, services, and technological choices, we encourage our clients to adopt this approach and focus only on the adaptations required to meet their specific needs.

As an editor and integrator, we provide complete and pedagogical support. We assist our clients in embracing the choices integrated into our pre-configured models, leveraging our extensive experience and in-depth knowledge of the market.

As an editor and integrator, we provide pedagogical and comprehensive support in helping our clients understand and adopt the choices made in our pre-configured models, drawing on our extensive experience and market knowledge.

Furthermore, we tailor our support model to the operational needs and constraints of our clients by ensuring the maintenance of our solutions ourselves or by facilitating knowledge and skill transfer to the bank’s teams for total autonomy.

Finally, our recognized experience in the market, our end-to-end approach, agility, and geographical proximity of our teams enable the execution of these projects effectively, mastering the challenges of our clients and the markets in which we are engaged.

Sika Finance: What are the comparative advantages of Capital Banking Solutions in a highly competitive banking solutions sector?

Capital Banking Solutions has been a historical leader in West Africa, with a presence for 25 years in the region. Our solutions comply with regulatory requirements, and we have a model that allows standardized deployments.

The emergence of new players is prompting our clients to accelerate their digital transformation. As mentioned earlier, our solutions offer the necessary flexibility for a gradual and targeted transformation for an economically viable time to market.

For example, this is manifested in our support for NSIA in its account management activities, enabling them to win the BTCC (Bank of the Year in Côte d’Ivoire) award.

Moreover, regional groups have placed their trust in us to support their geographical growth, as seen in the recent acquisitions by the Sunu Group and BICICI.

In this region, we strive to assist banks in essential transformations around credit, mobile money, instant payments, and interoperability. Additionally, we aim to integrate the benefits of Artificial Intelligence into compliance, anti-money laundering, and decision-making aspects.

In Central Africa, we take a proactive approach with financial institutions in formation or those opting for an evolution of their information system by decomposing their core banking into composable solutions.

This progressive decomposition aims to address the challenges of banks without requiring the complete replacement of their core banking.

In East Africa, where Anglophone editors dominate the market, we are in the prospecting phase, emphasizing our expertise and know-how to offer solutions that comply with local standards. This is based on our successful deployment experience with major pan-African groups, such as the Bank of Africa group.

In the Indian Ocean region, we are in an accompanying approach with our historical clients. We aspire to play a significant role in the transformation of financial services in the region by promoting digitalization and offering solutions that strengthen financial inclusion capabilities.

In North Africa, for the local market, banks prefer internally developed platforms capable of supporting multiple specialized solutions. Some of them are also pan-African banks, and we collaborate with their IT center dedicated to Africa to co-create new use cases.

As you can see, the African market is fragmented with varying levels of maturity. Nevertheless, we believe that Software as a Service models and sovereign cloud present an opportunity for us to offer scalable, evolutionary solutions that can be deployed continentally without infrastructure constraints.

In the short term, our goal is to support fintech by adapting proven banking solutions to their specific economic needs, particularly in the areas of microfinance, mobile payments, and payment hubs using the ISO 20022 standard.

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