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FINTRAK URGES MORTGAGE BANKS ON INDIGENOUS PROVIDERS OF IFRS 9 SOFTWARE

As Mortage banks and financial institutions prepare for migration to IFRS9 financial reporting tool which is to be effective from January 1, 2018, FinTrak, Indigenous financial software developer urges the institutions to look inwards for indigenous software providers, instead of the rush for foreign financial software.

Bimbo Abioye, group managing director, FinTrak Software who made this plea, recently stated that: “Nigerian mortgage banks and financial houses should avoid the mistake that they made when they rushed for foreign financial software that didn’t work for them back in 2012 only for them to look inwards for an indigenous software provider.”

Abioye affirmed that FinTrak IFRS 9 software is easily adaptable to any institution and with a robust after sales support which most of the over the shelf foreign software lack.

“We have over 120 hundred engineers that are on the ground that will give our clients the support and after sales services required. In some cases, we give advisory services to the clients as part of our value added service. We just don’t dump software to the clients, we always do follow up,” he highlighted. One of the high points of FinTrak IFRS9 software, he said is to minimize human input by full automation, adding that “Our team has been able to provide a financial reporting tool that has a high degree of transparency, accuracy and timeliness with the ability to explain any movement to the lowest level.”

On his part, Steve Ongharaka, executive director, Technical Services, FinTrak, explained that FinTrak IFRS 9 solution is not an option for most banks, mortgage banks and financial houses to monitor their credit manually.

“With the IFRS9 software, everything is automated. With this software, the system is scheduled and reports are delivered at a particular time, thereby increasing productivity and reducing wastage of man hours,” Ongharaka said.

According to him, FinTrak IFRS 9 is developed in line with the International Financial Reporting Standard (IFRS) specification, stressing that the software addresses the accounting for financial instruments.

“It has three main areas: classification and measurement of financial instruments, impairment of financial assets and hedge accounting. It will replace the earlier IFRS for financial instruments, IAS 39, when it becomes effective in 2018,” he added.

Tony Nwakaegho.

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Pantami, NITDA’s Boss, Says Agency Will Enhance Value Of Local Content Policy

By Amole Olatunde

The Director General/CEO of the National Information and Technology Development Agency (NITDA) Dr. Isa Ali Ibrahim Pantami, said the  government’s IT clearinghouse would enhance the value of local content promotion and development in the country’s ICT sector.

Dr. Pantami, at a recent public function in Abuja, said the NITDA, under his watch, would close leakages for waste of the country’s FOREX on ICT imports which have strong local substitutes and ensure strict adherence by the public sector on the local content policy.

Nigeria loses about $2.8 billion annually from the importation of ICT goods and services, including a whooping $1 billion spent annually on software imports. The NITDA’s boss said under dependency on software import hurts local skill development and the country’s financial health.

He lamented that a situation where locally assembled ICT devices represent less than 8% of all the devices used in the country is unacceptable, if Nigeria desires to grow.

“ICT provides veritable option for diversifying the economy because it has the added advantage of being able to improve efficiency and enhance productivity in all the other sectors of the economy.”

“We will collaborate with industry leaders and put policies in place to support young Nigerians to develop world-class ICT products. This was actually the plan that informed our decision to invite several startups to e-Nigeria and sponsored 16 to GITEX in October 2016. We also need to strongly plead with our international manufacturers to domesticate their products in order to achieve a win-win relationship.

“Within the limits of the mandate that set us up, we at NITDA are repositioning ourselves to filter the IT gadgets being imported to the country in the overall interest of the nation. It is a clarion call to all citizenry to transform NITDA into IT-driven and knowledge0based agency,” said Pantami.

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FinTrak Argues For Local Content In IFRS 9 Software Implementation

 

 

As the global race for the adoption of the new International Financial Reporting Standard (IFRS 9) gathers momentum, FinTrak Software Co Ltd, an indigenous financial software firm, based in Lagos, with physical presence in most African countries, has advised on the need to ensure that the IFRS 9 software is purchased locally, to save cost and make the software adapts to the needs of individual customers.

 

By Anthony Nwosu

While the financial regulators work at compliance by financial institutions (FIs) to the IFRS 9 migration deadline, the Group Managing Director of FinTrak Software Co. Ltd. Bimbo Abioye said the IT regulator, National Information Technology Development Agency (NITDA) should ensure that the IT Local Content Policy is fully complied with in the implementation of the IFRS 9 by local financial organizations.

“Nigerian banks should learn from mistakes of the past and avoid the booby trap of investing heavily in foreign financial instruments calculation engines that are not easily adaptable to our local business needs, and with a very low probability of success,” said Bimbo Abioye.

IFRS 9, which was issued on 24 July 2014 replaces IAS 39 standard.  Across the world, financial institutions have been mandated to migrate to the more robust and reliable IFRS 9 financial reporting software on or before January, 1st 2018. For rookies, according to Wikipedia, “the International Financial Reporting Standards, usually called the IFRS Standards, are standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB) to provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.

“They are a consequence of growing international shareholding and trade and are particularly important for companies that have dealings in several countries. They are progressively replacing the many different national accounting standards. They are the rules to be followed by accountants to maintain books of accounts which are comparable, understandable, reliable and relevant as per the users internal or external.”

A report by Uthman Saheed, an accountant on ‘Adoption of IFRS in Nigeria and Implementation Challenges’ states that: “In Nigeria, implementation of IFRS was launched in September 2010, but the successful adoption and implementation of these standards remain a mirage in Nigeria. The adoption was organized such that all the stakeholders will use the IFRS by January 2014. The adoption was scheduled to start with public listed entities and significant public interest entities who are expected to adopt the IFRS by January 2012.

“All other public interest entities are expected to mandatorily adopt the IFRS for statutory purposes by January 2013 and small and medium-sized entities shall mandatorily adopt IFRS by January 2014, (Jubril and Michael, 2010). The light of this, therefore, this study focused on the process of adopting the IFRS in Nigeria as a developing economy, the benefits and the challenges of IFRS, bearing in mind the prevailing domestic legal and regulatory framework.”

But as it stands today, most Nigerian banks and allied financial institutions appear unfazed by the deadline to globally migrate to the IFRS 9.  Saheed thinks regulatory authorities that include the Central Bank of Nigeria’s (CBN), Institute of Chartered Accountants of Nigeria (ICAN), Securities and Exchange Commission (SEC), the Nigerian Stock Exchange (NSE) and Federal Inland Revenue Service (FIRS) should work jointly to design an awareness programme on the importance of compliance with accounting requirements of IFRS.

The new IFRS 9 will review how the FIs especially banks, are rated, the banks will be rated in terms of financial outlook, banking customer’s solvency and risk assessment. This is what the new financial reporting tool has fine tuned. In the words of Patrick Obianwa of Financial Services Leader Nigeria: “The requirements of IFRS 9 offer FIs an opportunity to improve on the level of sophistication of valuation models that are being used. In our view, there are challenges we envisage that financial reporters would have to grapple with as Nigeria moves closer to the IFRS 9 adoption deadline,” he said

Industry watchers are worried that Nigerian FIs might fail to meet the deadline to migrate, a situation that will see the ratings of the local FIs nosedive due to inappropriate practice. “Inability to migrate to this software means our banking system will run on obsolete software and this portends danger to the banking public,” said, the Executive Director, Technical Services at FinTrak, Steve Ongharaka.

The industry regulators such as the National Insurance Commission (NIC), CBN, SEC and others have sent guidelines but are put pressures on the FIs to ensure compliance. The CBN specifically issued guidelines as at December 2016 for banks and discount houses on the implementation of IFRS 9, but implementation has been slow on the side of banks Equally worrisome, according to some experts, is that the regulators have not also put into consideration the local content part of the IFRS 9 migration. The local content factor is as important as the migration deadline for the new reporting tool, argued Abioye.

Agnes Lutukai who heads the Department of Professional Practice, West Africa of KPMG Professional Services Nigeria said the enormous work that would be done in the country to ensure that FIs migrate require an early, aggressive and committed process.  In her words: “half of the financial institutions in Europe are unprepared for the transition to IFRS 9 and the extent of work that may be required to achieve IFRS 9-compliant reporting will be significant for banks in Nigeria… banks, insurance companies and other financial institutions should start IFRS 9 implementation in earnest, so as to effectively manage regulatory and business surprises.”