Mugwagwa: Digital to become real estate in business

NDAMU SANDU

Agrippa Mugwagwa, pictured,  considers himself as a “born marketer, banker by accident and digital by design”.

“As a result many might refer to me by any of those things, and they are correct — I’m a marketer, banker and digerati,” Mugwagwa told Business Times.

The executive was in May appointed as MD of Xarani (Private) Limited, the new strategic business unit of financial services group, FBC Holdings.

The unit is a digital ecosystem enabler with a solid footing in financial services.

Xarani’s mandate is to digitalise FBC into the fourth industrial revolution from the edge and is at liberty to create value in the wider market by serving the market of like-minded businesses that believe in the existential urgency of transformation, Mugwagwa said.

“The single-mindedness of focussed entities is a powerful force of change, especially in fast-changing environments such as the one we are going through. There are significant opportunities of transformation that exist within and beyond the Zimbabwean market,” he said, adding the company is already serving the wider market with its capabilities as originally planned and it views the market as an ecosystem which functions optimally when it is integrated.

Xarani, the banker said, would enable businesses to on-board their clients or employees real-time, securely and cost-effectively through different electronic channels using state-of-the-art technologies.

“We also help financial and other businesses mitigate fraud and identity-related risks as they migrate into the digital economy. We also enable traditional and emerging payments for different use cases in our fast changing market that is under pressure to adjust and innovate. We are also an enabler for innovators and fintechs in the market who are open to collaboration to provide new technology-based services in the market,” Mugwagwa said.

He said the Xarani model is novel locally, particularly devolving organically out of bank. In developed economies it is a more developed concept where established banks are investing in or partnering financial technology companies to accelerate transformation internally while offering services to the wider market, Mugwagwa said.

The executive is banking on his solid foundation. At the University of Zimbabwe, Mugwagwa was taught by Ernest Matienga and Doug Munatsi who would later establish NDH and Heritage Investment Bank respectively. It was the influence of the duo that saw him in the banking sector.

The executive would again learn at FBC from leading bankers Livingstone Gwata, John Mushayavanhu and industry captain and board chairman Herbert Nkala.

In the 90s, the banker took a keen interest in e-commerce.

“During my Masters programme in the late 90s I had also undertaken e-commerce for my thesis, right at the time mobile telephony was emerging, the dotcoms were starting and closing in frenzy. The Amazon vs Barnes & Nobles were slugging it out as mere book-sellers, and a favourite MBA case study,” he said.

The banker has worked in the e-commerce unit of the group for over 10 years.  The group, he said, observed the change in trends around 2009 and decided to commit to digital, particularly in its consumer banking business.

This saw Mugwagwa transitioning to e-commerce director, learning faster fuelled by his passion for tech and change in general. “I attended the first global mobile money conference in Barcelona in 2010 and my belief in the future of financial services was crystallised.  In 2011, I took over the Retail Banking portfolio as executive director, and this became an opportunity to deepen the digital agenda given the changes that were happening in the market,” he told Business Times.

“We had partnered with NetOne on launching the first mobile money product in 2009, and this came with its own tough lessons having happened less than two-years after the ground-breaking M-Pesa launch in Kenya in 2007. I was one of the early agitators for banks to collectively subscribe to ZIPIT when it launched, premised on my prior exposure on how ecosystems elsewhere had helped banks to mitigate potentially not-so-friendly non-banking or adjacent players that are emerging.”

ZIPIT came at a time banks were working on different mobile banking product of one form or another. In the end, all banks eventually converged around the ZIPIT ecosystem.

Mugwagwa said going digital enabled FBC to grow the issuance and acquiring business through the cash-lite environment engendered by monetary policy, and focussing on the customer.

The bank on-boarded SMEs onto POS network, which enabled them to sell more of their products and services.

“It took a lot of effort in hand-holding our customers onto digital channels to ensure they became comfortable with the cards, apps and even ATMs. Consequently, FBC is one of the top 2 most active banks by transaction volumes on the ZIPIT platform. 

In 2010, FBC headlined the re-entry of MasterCard into the Zimbabwean market post-dollarisation, and the signature MasterCard Prepaid product has been hugely successful both in travel, proximity and online payments locally,” the banker said.

Mugwagwa has been in the banking sector for 30 years after cutting his teeth as a graduate trainee at the then Zimbabwe Banking Corporation in 1992.

“My highlights are excelling in asset finance at ZB in the late 90s, rebranding then First Bank (to FBC) in 2005 and then undertaking the digital gig to date,” he said. 

“When we left college that way back it wasn’t as difficult to get a job in a bank. Amongst others banks would come to the career fair at the-then-sole university. One would fill in forms in their final year; ace the interview after which you would undergo a graduate training programme before substantive appointment.”

The executive’s discomfort with the status quo has constantly generated energy to learn and do new things, which has kept him going in an otherwise conservative industry.

“My stint as president of the Marketers Association of Zimbabwe (2016-18) was one of those exciting opportunities to serve in a domain of my passion,” he said.

The banking sector has seen transformation: from the pass books, cheque books, ATMs and now mobile banking. Mugwagwa said change in the banking sector is a confirmation that in this world change is the only constant thing, and the cycles thereof have become shorter.

He said bank clerks in the 1800s would criss-cross town to bilaterally clear and settle cheques; they subsequently decided in London to meet by the central Five Bells tavern and formal central clearing was borne out of this human innovation though it came 50 years later.

“Fast-forward 300 years later to 2001, there was a payment gridlock from the September 11 US terror attacks due to non-movement of cheques as planes were grounded. Some 10 years later instant payments through ZIPIT and mobile money became standard in Zimbabwe. I was privileged as a graduate trainee around 1992 to experience physical cheque clearing. 

“This evolution is just the beginning of the fourth industrial revolution, and technology is going to have a lot of say about the future. We have seen mobile money making a huge impact in emerging economies, facilitating the leap-frogging of developed ones even,”  the executive said, adding “I speak a lot in conferences and I don’t miss the opportunity to confirm what we all know: Zimbabwe is now one of the most cashless economies in the world”.

Mugwagwa believes banking will disappear “from our eyes as we know it, and get embedded in our daily lives through technology”.

“Everything will be connected in the next few years, and those business models that are not reconfiguring around that reality are unlikely to be around much longer. One of the biggest lessons from my journey in the industry is that technology is easier to implement than changing people, and to a large extent Covid-19 has shown that,” the banker said.

The executive said Covid-19 has been by far the most effective global digital enforcer over the last 10 years as it has brought forth digitalisation by 5 to 7 years.

“We are seeing many financial service and other companies moving at break-neck speed to digitise their processes and models end-to-end to survive as well remain competitive,” he said, adding that the uptake of digital insurance and banking products is growing at an impressive pace. 

Mugwagwa said a Xarani-driven digital on-boarding platform enabled FBC to launch the first full-KYC account opening service via their Mobile Moola app.

He said digitally-inclined companies were able to underwrite more business compared to their “analogue peers” over the last one-and-a-half years.

“For example, clothing retailer Primark in the UK lost sales amounting to £600 million in March 2020 when the UK went into full lockdown, they didn’t sell a dime because they weren’t online,” the executive said.

He said digital thought leaders have been shouting hoarse over the last 5 or so years that “we are at an inflection point, and I have been with them” but never imagined that a pandemic would be a game changer in implementing the digital and fintech discourse.

The executive said most of the artefacts in banking will disappear over the next decade if not less and with everything connected and there won’t be need for the many bank branches.

Consumers will be more informed and enabled by technology to do almost anything — from on-boarding or opening accounts to getting customised products and service support, the banker said.

“A lot more data will be available to businesses to make strategic and operational decisions that will separate the winners from the losers. Real estate in business will be more digital than physical, and the new oil is data in all this. Covid-19 will force a serious re-think for many businesses as to whether they need all the floor space they currently occupy,” Mugwagwa said.

The executive was born to teachers who had an affinity for learning and educating where he borrowed the “relentless desire to learn and teach as I so often do”.

The digerati’s philosophy is that knowledge is power and passion is the enabling steroid.

“I believe in applying and committing myself towards what I believe will make a difference. For me the burden of knowledge and experience is to share it. I totally submit to the triumph of the human spirit, and the sovereignty of God,” he said.

Mugwagwa draws inspiration from the proven potential of a human being to change their circumstances.

“My late grandfather and mother were such believers in me, reminiscing over their cheer-leading chants to me as a toddler is empowering,” he said.

Mugwagwa is currently writing his PhD thesis, poring over copious peer-reviewed journals in his domain of study. He has finished reading Digital Human by Chris Skinner which explores the digital evolution’s impact and offers clear insights on thriving in this new era.

The executive is reading Shoe Dog by Phil Knight which he was recently gifted by Phillip Mataranyika, one of the top business buccaneers. The executive finds listening to podcasts an effective and effortless way of consuming content as well.

Married to Eleanor, the couple has two kids.

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