Every player in the banking and finance sector must contribute its quota, with significant leadership from the central bank, in rebuilding and regaining the trust and confidence of customers and the economy at large, Francis Wood, Bayport Savings and Loans’ new board chairman has said.
“Every economy, marketplace or industry is different from country to country, and it is only players who have been in that space who have the most expertise, experience and are market-savvy. To me, taking all theory into account, I think these players ought to be coming together, perhaps more frequently, and exchanging concrete and specific ideas that can be made public and come out in some kind of paper or document that goes into the banking regulation cycle.
“That is one way the customer or marketplace will begin to see the powers, authorities and players are taking this issue of building trust and confidence very seriously when it comes to the banking and finance sector,” he said.
As one of the leading payroll lenders, Bayport Savings and Loans recently restructured its board – which saw three board members retire and be replaced with new members to oversee the business’ transformational agenda with Mr. Wood – who is an astute investment banking professional with decades of experience in leadership, and professional qualifications in finance and architecture, appointed as the new Board Chairman.
Bayport has seen it all in the Ghanaian financial sector, and has for sixteen years revolutionised the payroll lending space by maintaining its number-one position, merged with its sister company CFC Savings and Loans, and survived the recent financial sector clean-up that saw 23 of its colleagues fall.
With such expertise, Mr. Wood believes that a more conscientious, collaborative and concerted communication plan is critical in restoring lost confidence to the sector; and while much is expected of the regulator, stakeholders in the sector cannot afford to wait. “We must be proactive, so a more periodic conference among the CEOs or leadership of these institutions needs to happen.”
Since the completion of reforms in the banks and special deposit-taking industry by the central bank, which saw the revocation of almost 400 licences and the expenditure of almost GH¢20billion to safeguard depositors, many Ghanaians have lost confidence in the sector and are unwilling to access financial products and services – and this is having adverse effects on the bottom-line of banks, finance houses, savings and loans and microfinance companies.
Several institutions, such as the Ghana Association of Savings & Loans Companies as well Association of Bankers, Chartered Institute of Bankers (CIB) Ghana, the central bank and other stakeholders in the special deposit-taking sector, are trying to fashion-out a way forward to regain the public’s trust; but that is happening at a rather slower than expected pace.
“The leadership of these institutions should be getting together with leadership of the central bank. There is need for a concerted agenda to rebuild trust and confidence. You cannot fast-track or rebuild confidence in the banking and financial sector quickly; there are some situations in which we all have to understand that fast-tracking is almost not an option.
“We are all players in the system – including providers of services of products, consumers, agents and lawyers, and so I would say that understanding the psychology/mindset of customers in the sector and improving communication flow amongst players in the system is crucial – because each of the players in the system have different psychologies as a function of their specific space,” he added.
How did Bayport survive the purge?
When asked how Bayport was able to withstand the stress in the system, stay afloat and survive the reforms, Mr. Wood explained that the company just stuck to its core competence of payroll lending, astute corporate governance structures, building experience over time, utilising technology efficiently and improving its engagement with customers.
“Our secret is that we have run a business over time that has stuck to its knitting. Bayport is a business that is over 90 percent payroll-lending; we know the payroll lending business very well and we have improved our services, internal structures, the application of technology and steadily improved the customer interface through IT.
“Therefore, in ‘sticking to our knitting’ we have built experience and expertise step by step. What we have done best is undertake steady improvements over time. If you look at our financials, you will see that our topline growth is a testament to that,” he said.
He added that Bayport has a strong foundation in its board, and continues to have a strong management and executive team. The company, under his tenure, will continue working to harmonise the board, management and executive teams. “The leadership structure at Bayport in Ghana is very strong. I think a combination of those things have helped safeguard us.
“Also, corporate governance at Bayport is extremely strong. Some of the things that convey trust and confidence to the market are metrics like the growth of our topline and balance sheet, and the fact that we have not defaulted on any borrowing in the market – i.e. bank to bank lending or customer deposit and others – has given us an unblemished scorecard.”