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Industry and Market Analysis for Appzone Technologies

AppZone is a financial technology company (FinTech) focused on developing solutions for financial services business and the industry via cloud computing systems. It aims to enable the digitization ambitions of banks in Nigeria and across Africa through its homegrown solutions. The company was established in 2008 in Lagos, Nigeria.

It solutions currently services over 16 commercial banks, 300 commercial banks and has a staff strength of over 119 people. Its solutions manage about 20 billion in deposits from over 2 million accounts. Through its card management solutions, an approximate 30,000 cards have been issued and used in processing 100,000 transactions daily.

A brief description of AppZone current products and proposed products are highlighted below;

I. BankOne. It automates retail banking/microfinance operations and also enables electronic service delivery on a one-stop, central managed, pay-per use platform. Over 300 microfinance banks are enrolled on BankOne.

II. Teleios. This solution enables the optimization of financial operations in medium-to-large organizations through process automation and seamless interaction with Bank Systems.

III. CreditClub. This is a technology solution geared at improving financial inclusion to remote and financially excluded areas previously unbanked via branchless and agent banking.

IV. Tradeport. This solution enables small business (SMEs), medium sized organizations and retailers to integrate operations such as sales, inventory and accounting automation, e-banking and payment processing.

V. Prime. This solution is a card management platform-as-a-service enabling integration, hosting, transaction processing and end-to-end process automation for payment cards for major local and international schemes.

Proposed product;

I. Zone/ Zone switch. This solution works like a mobile app built to power the virtual bank of tomorrow. It has functionality for payment, commerce, and personal financial management.

II. Ace.

III. Recova.

AppZone is seeking to raise $7.5 million for further product development, working capital and product licensing. This industry and market analysis aims to verify the viability of its business structure and model.

Market Analysis.

Market Characteristics and Trends. High Costs and Risks of IT Upgrades.

Traditional financial institutions own legacy systems that are mostly centralized. This systems are inefficient in meeting the dynamic banking needs of millennials as well as members of rising Generation Z age class. Replacing this legacy systems can be expensive and risky as well. A McKinsey study reveals that less than 30 percent2 of legacy systems were successful over the last decade. Despite this costs and risks, the study also revealed that successful upgrades will lead to over 50 percent reduction in operational costs.

Artificial Intelligence.

Artificial intelligence is capable of driving process automation, marketing, customer relationship management and improving the customer experience in financial institutions. By optimizing and understanding the data of its customers, banks have the capability to create products, services and experiences tailoured for each customer. Implementation of artificial intelligence systems would be dependent on enabling competencies in data mining and analytics for engagement with customers. Artificial intelligence may also be applied to other areas in chatbots to have conversational banking with customers, initiate transactions for and behalf of the customer with little need for human oversight for immaterial transactions.

Increasing API Access.

According to IDC4, by the end of 2018, 50 percent of global Tier 1 and Tier 2 banks will offer at least five external APIs. API’s are fast becoming an opportunity for banks and insurance companies within financial services industry to efficiently acquire more customers, streamline service delivery to existing customers and reduce overall operational costs. Banks are increasingly partnering with financial technology companies via open APIs.

Cloud Solutions

There are just a number of current technologies in the business space that do not require some form of cloud solution for business support and solutions. Financial services business is no exemption as well. Many banks have been previously reluctant to host secure processes on public cloud mainly due to fears of breaches and regulatory sanctions in such cases. With increasing improvements in cybersecurity resources, banks are becoming more willing to expand to public cloud services. A critical driver of these decisions are the inability of private cloud services (which are mostly bespoke development for the bank) do not support cross platform transactions and transfer.


A report by Greenwich Associates in 2016 estimates spend on blockchain technology by Global Financial Institutions at over $1 billion5. Directions of these spending were invested in technology solutions that will enable banks better understand blockchain technology and generate use cases for implementation within financial institutions. This describes the biggest challenge facing the industry today where there is scarcity of blockchain talent, not only from an application development perspective, but also from a domain expertise angle. However, there are significant rising solutions from startups such as Ripples, Circle, TransferWise among others. Also, some banks in India such as ICICI Bank, YES Bank, Kotak Mahindra Bank and Axis Bank have built similar blockchain solutions for money transfer.

Demand Drivers. Financial inclusion.

Financial exclusion rates in Nigeria are high. The EFinA estimates about 42 percent of Nigeria’s adult population to be financially excluded. This creates opportunities for extension of financial services to underserved population of about 40 million people.

IT service Infrastructure

Financial institutions are continually seeking innovative and cost efficient technological solutions to deliver its services to customers, private and corporate clients. This solutions are powered by Information Technology Infrastructures from servers to card management, to other core banking systems. This system must be capable of delivering seamless and integrated banking experience to financial services users.


Nigeria’s population is largely uninsured. According to National Health Insurance Scheme, just about 4 percent of Nigeria are covered by insurance7. Insuretech companies are poised to take advantage of this market due to their ability to provide basic insurance solutions that will target core insurance needs such as insurance for a specific common ailment. They will require technology to enhance this solutions for which the business can develop for business operation or sell to insurance companies (and insuretechs) on pay per use basis or any other sustainable revenue model.

Data Analytics and Credit Ratings.

Financial services institutions, including banks, insurance companies, and the technology companies offering financial services may achieve accelerated solution delivery by understanding the individual customers. Financial technology companies in particular can boycott the traditional credit rating process for the use of customer data from financial transactions and other sources to calculate credit scores. Further insight may be generated for application to other aspect of product development for these financial services companies.

Business-to-Customer Portfolio Investing.

Financial services companies offering savings, asset management, and direct capital market investing capabilities have a unique need for technological solutions that meet global best practices. One of such practice is the Global Investment Performance Standards (GIPSs). This standards highlights how fees must be structured, reporting of investment performance and ensuring transparency in transactions which are critical for trust by end users.

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