# 61 - Selling to Banks 1 - Navigating the Game of Thrones

Like the Game of Thrones, Selling to Banks requires a deep understanding of the different forces and personalities shaping the Kingdom of Banking

Illustrated by Mary Mogoi - Website

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Sponsored by Skaleet

Global Platform, Local Solutions: Pioneering Simplicity in Complex Banking Tech

First implemented in 2014, Skaleet’s core banking technology was built on the idea that digital financial services were necessary for the growing African market. Geographic dispersion and a youth driven demography showed the founders that digital propositions based on Mobile and Agent networks were going to be the primary mode of delivering financial services in Africa. They built for this reality with the aim of helping banks quickly launch digital propositions. They have the chops to show for it with Trust Merchant Bank (TMB), BMCI and Interbank Burundi all launching quick digital propositions in their respective markets (Masvri digital bank launched in 4 months during the pandemic !). TMB and BMCI both have over 800,000 customers transacting on the Skaleet platform and grew exponentially over the past years.

These learnings were then exported to Europe whilst the continent was witnessing its own Neobank boom in the middle of the last decade. Skaleet is therefore a Global Next Gen Core Banking platform built on the back of hard won insights from launching in the continent. They know how the continent works and have built for it. With a single code base and one platform, Skaleet’s extreme level of configurability combined with an in-market solutioning approach drives predictable localized success. Since December 2020, Skaleet has raised nearly $ 50 million from Long Arc Capital, a NY-based growth equity fund and has grown to a team of over 130 people, giving them the scale and chops to successfully manage both large and small digital propositions. Contact Brice for Partnerships and Beatrice for Sales;

For Sponsorships like above or Partner Pieces reach out to me via email on samora@frontierfintech.io

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Introduction

Selling to banks is never easy and many companies have died on the journey towards closing a bank deal. Many more are still on the journey comforting themselves with ideas such as “it takes time, but once we close one we’ll be good to go”. Little do they know like many before them, the remnants of their businesses will be strewn upon the path of closing a bank deal. This stark reality is something that I have experienced personally and I’ve seen many people experience it. Some have been successful, many have failed and I figured it’s important to write about this insofar as it could help a business either shape their strategy or move closer towards closing that coveted bank partnership or contract. From my experience, partnering with banks is complex and failure comes in the form of not understanding the complexity and not having empathy with the people you’re trying to partner with.

To provide meaningful guidance, I've split the discussion into two parts. The first article will focus on understanding the bank's world—the economic and regulatory context, the nature of banks as risk management organisations, and the personalities you’ll encounter. Over time, I've come to realise that business is fundamentally about people and relationships. Whenever I hear talk of processes without a focus on the human element, I find it misses the essence of how things truly get done. Therefore, discussing how to sell to banks necessitates a deep dive into understanding the personal contexts of those involved.

The second article next week will go into practical sales approaches, including structuring meetings, managing pipelines, and effective tactics I've found valuable. While I've faced my share of mistakes, the insights gained have been instrumental in navigating the complexities of selling to banks.

The Game of Thrones

A great number of us spent way too much time binge-watching Game of Thrones just to be utterly disappointed by the last season. I’m still recovering from it. Nonetheless, what I loved about Game of Thrones was its realness. Despite its fictional setting, it perfectly encapsulated the complexities of the human condition. It portrayed gifted yet flawed individuals, dynamic relationships that shifted from strong bonds to fragile alliances, and ever-changing interests. In much the same way, selling to banks and assisting them with digital transformation is a game of strategy and navigation.

As a vendor, you have to navigate external threats like the economy while understanding the complexity of personal circumstances. Trust me, it's a complex endeavour, and trying to simplify it won't lead to the results you want. The great vendors who have grown multi-billion-dollar businesses by selling to banks understand this complexity and embrace it.

Let me invite you to understand the Bank of Westeros, which, just like the Houses of Westeros, has to navigate both external and internal pressures. The economic climate is represented by the changing seasons. Regulatory requirements are like the Crown's decrees, dictating the moves that the bank makes. And the emerging threat of fintechs? They're the White Walkers beyond the Wall. While the Wall is currently protecting the bank, the White Walkers pose a potentially existential threat.

The team navigating this complexity consists of:

• Margaret, the CEO: She's trying to walk the tightrope of balancing her legacy, her future financial status, and the shareholders' demands for digital transformation.

• David, the CIO: He loves technology and the idea of innovation but is jaded from managing so much technical debt.

• Susan, the CRO: She's played it safe throughout her life and isn't about to rock the boat. Besides, she's suspicious of anything new.

• Peter, the Director of Corporate Banking: He's built his entire career on relationships; what people say on the golf course about him is his north star.

• Esther, the CFO: Like Susan, she's cautious, particularly about things that are difficult to define on a spreadsheet.

• James, the Product Owner: He wants to make his mark but is facing his own existential dread about being a middle manager all his life.

The External Environment

Banks are facing many challenges. Sometimes the regulators can be overbearing when it comes to product approvals. Cybersecurity and data concerns loom large over them and this is something that keeps many awake. However, these concepts have been spoken about ad nauseam. There’s little of value I can add here.

There’s one aspect of the overall external environment that I feel hasn’t gotten the attention it deserves and that’s the economic environment particularly as it relates to B2B sales. In the African tech circles, one concept that has become conventional wisdom and almost dogma is the idea that it’s better to build a B2B business as opposed to a B2C business. The idea behind this is that Africans generally have low GDP per capita. This has been proven out by studies. For instance, Piggyvest recently released a report showing that over one-third of Nigerians earn less US$ 60 per month. Moreover, over 70% of respondents from the Piggyvest study stated that they paid black tax i.e. spending money on relatives out of obligation. More importantly, over 87% of Nigerians spent less than US$ 120 per month. These figures are representative of the typical African consumer.

Given this reality, the conventional wisdom is that it makes more sense to build a business that sells to Businesses rather than consumers. In theory it may seem to make sense but upon closer scrutiny, this logic falls apart. My experience is that this idea is flawed and that consumer spending heavily influences business spending. An example would suffice. Whilst at Sote, we sold a world class logistics experience to manufacturers based in Kenya. Our promise was that we’d give manufacturers end to end visibility over their supply chain culminating in lower costs and a more resilient supply chain. Our promise was real and we grew the logistics business. In fact, it was the first ever logistics business that customers truly loved. Even when we were winding it down, many of our clients were giving us suggestions on how we can continue working together. Nonetheless the challenge was that we couldn’t charge extra for this brilliance. The market rate for clearing and forwarding services was US$ 100 per container and this wasn’t going to change regardless of how amazing your service is. A number of our clients were manufacturers and their markets were defined by the realities shared through Piggyvest’s report. Their income was constrained by the African consumer and therefore many of them run low margin businesses given that market is price conscious.

The questions for these manufacturers to us was simple; Where am I going to get the extra money to pay for your amazing services? It was a difficult question to answer. This is a reality that’s prevalent across the continent. There’s no producer surplus across a number of industries due to intense price competition. Businesses are therefore forced to compete on two critical pieces of leverage. Either, you are the lowest cost producer by cutting all the fat in your business or you control a chokepoint in the business thus generating above normal profits. This latter approach is common amongst most large businesses such as Dangote, a number of the breweries across the continent which benefit from both high barriers to entry and unique behind the scenes approaches to protecting their turf.

In the face of such economic realities, technology is rarely the provider of leverage in most traditional businesses and even if it is, monetisation is ultimately constrained by the economic circumstances of the African consumer.

What does this have to do with banks? Well, they are economic participants in this same economy. How this manifests is that as a vendor your product ultimately has to be monetised and monetisation ultimately will come from charging a customer either a business or an individual. Both are constrained by the available spending power. Similarly for banks in Africa, when they look at their P&L and ask where the leverage is going to come from i.e. which activities will produce the most revenue, it’s often not digitising or transforming a process. It’s often simply just closing a large corporate customer or getting a large government agency. This is where CEOs spend most of their time.

To succeed as a vendor requires that either your product is a regulatory requirement, is mission critical, can actually produce real leverage or can make the bank look good. If you’re selling something on the basis of making them more efficient or more money, you’re skating on thin ice. This insight is what led companies like Cellulant and Moniepoint to go directly to the consumer rather than attempting to improve banks from within.

This somewhat pessimistic overview is not based on a deep seated pessimism about digital transformation in Africa. It’s meant as a forcing function to make tech start-ups and tech vendors think deeper about their value proposition. Don’t skim through your analysis and come up with flimsy value propositions such as unique customer experience. You need to solve real problems that add long-term strategic value. We’ll talk about some of these in next week’s article.

Understanding the Bank as a Risk Machine

I've often said that I became a banker by mistake. Colleagues used to refer to me as an entrepreneur who happened to work in a bank. Banks are unique institutions that can't be modelled against typical businesses. A friend once suggested we could learn from Kenyan banks' regional expansions. My counterpoint was that banks operate under circumstances vastly different from other businesses and there’s little to learn.

Take, for example, Dangote's attempted expansion into Kenya. It wasn't a lack of business acumen that hindered them but rather non-tariff barriers and deep-seated commercial interests blocking intra-African trade. Conversely, when GT Bank expands into Kenya, regulators have a duty to protect it—as they do all banks—because banks hold depositors' money. Even in challenging environments like Burundi, where a local oil businessman colluded with the Central Bank to deny companies access to foreign exchange, leading to their closure, the Central Bank would never conspire to collapse a bank like KCB. Banks are safeguarded because they are integral to the economy's stability.

The point is, banks function almost like public-private partnerships, with a primary objective of avoiding loss rather than chasing big wins. Over the long arc of a bank's existence, its success is more about the mistakes it didn't make than the groundbreaking initiatives it launched. This mindset stems from the nature of credit risk—you aren't rewarded for making exceptional loans; you're rewarded for avoiding bad ones.

I've seen many entrepreneurs approach banks with pitches like, "You can win big if you adopt this technology." While that might be true, banks are more concerned with what could go wrong if they adopt it. Potential risks often carry more weight than potential gains, especially in banks where owners aren't directly involved and less willing to stomach risk. New technologies, while exciting, are scrutinised for potential vulnerabilities—cybersecurity threats, compliance breaches, operational disruptions. Regulatory oversight amplifies this cautious approach; any failure could lead to sanctions, fines, or loss of licence.

Consequently, banks may seem slow to adopt change—not due to a lack of capability but because the cost of a misstep far outweighs the benefits of experimentation. For vendors, this means positioning offerings not just as innovative but as safe, compliant, and essential for minimizing risks—a message that aligns deeply with the bank's core mission.

Meet the Players

As I said at the start, people buy from other people and it's important to understand the motivations behind the players. Of course, the people you’ll be dealing with will be shaped by the organisations they’re working in. Political banks will attract political people for instance. For our sake we’ll focus on a privately held bank that’s large enough to be a tier 1 bank but small enough to be agile and innovative. We’ll introduce the characters that you’re dealing with when selling a digital banking platform aimed at improving the corporate banking digital experience. They’re part of a global multi-national bank but the Group CEO has made it clear that the local subsidiaries have autonomy and can pursue their own digital efforts. The bank has been in the market for a long time and are well regarded both as a bank and as an employer. All characters are completely fictional.

Margaret - The CEO

Meet Margaret, she’s spent the last three decades carefully building her resume. She knew from the time she was 10 that she wanted to be a top banker in the continent. This was a level of focus that was not normal amongst her peers. She carefully built her career brick by brick, going to the right schools, studying the right courses and taking the right jobs. She meticulously built out her networks being careful not to offend anyone that she may need down the line from a career growth perspective. She’s now reached the peak and deservedly so. Now at the peak of her career, she sees herself as the bank’s protector, carefully balancing every decision to safeguard her legacy and the institution’s stability. The stakes are high; each step toward digital transformation feels like a gamble with hundreds of employees’ livelihoods, the bank’s reputation, and her career. Although Margaret recognises the need to innovate, she is haunted by the thought of destabilising the bank’s trusted processes with untested technologies. Her primary fear is a legacy tarnished by an avoidable failure, and she feels the weight of appeasing both the board’s ambitions and her own instinct for security. Besides, she probably has 5 more years left of being a CEO before moving either into a senior government role or leading the Rockefeller Foundation.

Margaret's structured and organised nature has sometimes come at the expense of creativity. The inherent chaos of technological disruption makes her uncomfortable. She's acutely aware of her gaps in digital knowledge, which affects her confidence in leading tech-driven changes. The banking world is evolving into something she feels less in control of—a far cry from the traditional landscape she mastered. She fears that one misstep in the bank's digital strategy could define her career negatively. Like Catelyn Stark, she understands that she needs to maintain a strong sense of duty and responsibility whilst also understanding the costs of not adopting to change given the fate that befell Ned Stark.

On a more personal level, she’s also a victim to the tough economic circumstances that have ravaged the middle class. Her seniors were able to build comfortable lifestyles as middle management bankers but now even on her CEO salary she fears she may not have saved enough to see her kids through both prep school and an Ivy league education. Deep inside, she knows that she needs to make as much money before she leaves her role. She’s also aware that if tech continues to play such a critical role in banking, she may not have the skillset to sunset into board memberships when she retires.

Dealing with Margaret will require a careful combination of;

1. Empathy;

2. Developing a relationship as a consigliere where you teach her about tech and give her confidence;

3. Make her feel secure and smart;

4. Make her feel good;

5. Chiefly, de-risk digital transformation for her;

David - The Chief Information Officer

David is in his late 40s and one of the smartest technical minds in the country. In his youth, Silicon Valley was not an option and therefore he did the best alternative path he could pursue, building a career in the banking sector, initially as a database engineer and slowly as a senior manager in the IT department as it was called then. Whereas his peers worked hard to build their CVs, David was just smart and the industry pursued him. In his spare time he tinkers with new tech from wearables to the newest AI apps. Despite his brilliance he has spent the last 15 years not only fighting technical debt but also fighting the insider politics that is instigated by his colleagues in business. The battle is simple, David sees the bank as a technology company but his colleagues on the business side fear that this may make them irrelevant.