Yele Okeremi, DBA - CEO, Precise Financial Systems

Welcome to another CEO Wisdom podcast. We have Yele Okereemi with us today. Yele is a CEO at Precise Financial System in Nigeria. Today he's in the US, but basically has a bunch of banks in Africa and was quite intrigued by how he scaled his company. Actually, he's banking software. He serves a bunch of banks in Africa through his banking software company. I'm just curious of how this happened. How do you scale in Africa? It's not so easy climate, right? The banking system is not as well developed as other parts in the world. And I think it's very impressive what you achieved, Yele. So welcome to the podcast. Tell us a bit more about yourself and what you've been up to.

Yeah, very great pleasure to be with you, Charles. Hi to everyone on the podcast. My name is Yele, as I've been introduced by, you know, Charles. And yes, I, I run a software house, Precise Financial Systems, and I've led this company for about 32 years. The headquarters is in Nigeria, in Lagos, Nigeria. I mean, although we have offices in London and then now in the US, but we, we started the business about 30 2 and a half years ago, um, in Nigeria. And when we started, just like Charles said, our world was Nigeria. We didn't see a world outside of Nigeria at that time. But you must remember that those were, uh, that was a long time ago, and the idea of globalization was there then but wasn't as pronounced as it is today. And you have to keep in mind that there was nothing like social media. at that time. And even telephony in Nigeria was still in the days of analog lines. So, um, there were no— the way it is today where we have our mobile phones and mobile phones do everything. So if you wanted to communicate with everybody, you had to write a snail mail and post it, you know. That's the way it was. However, um, the bottom line is I had worked as the CIO of a bank in Nigeria at that time. And I was also fortunate to have joined the bank as a startup bank. The bank was starting up when I joined, and that was a rare privilege. But my background is in computer science.

I had—

I have a degree in computer science with economics. So 2 double majors, computer science with economics. And of course, I I hold an MBA, but much later in life I hold a doctorate degree in business admin. But now, but at the time we started, I was only armed with an MBA and a bachelor's degree.

And $60 USD.

And $60, oh yes, and very importantly. So I want to talk about that. Charles, now that you mentioned that, let me speak about that. Yes, that was all we had, uh, at that time. It was less than $60. Today, um, the— it should be— today it will be about $5 or so, or thereabouts, or probably less. It was ₦8,000 at that time, so ₦8,000 today Uh, will probably be worth $2 or thereabout. Yes, $2, $3 today. Yes, to be worth $2, $3 today. But you see, AMP with a very sound, um, idea. And here was the idea. Remember I said I had served as— I was working as the CIO of a bank, and it was a startup bank. And it's important that I say that it was a startup bank. And serendipity again, Well, maybe not 100% serendipity. One of the things I decided as a young engineer when I graduated was I wasn't going to work anywhere. In fact, I said I didn't want to work in a user environment. So what we call user environment are the environments where people do not develop their own applications. So I made up my mind from the beginning that I wanted to work in a developer environment because I considered myself at that time to be smart and talented. So it was one of the conditions for accepting to join the bank that they were building their own in-house banking application at that time. So, um, I joined the bank and we were building a banking application, and at the same time we were benchmarking at that time world-class banking applications. At that time, uh, the big ones were, uh, Capiti, uh, Equation. You know, that's— I don't know whether that company still exists. No, it still exists as Mysis. At that time it was Capiti. And then there was BankMaster by Kindle, which was an Irish company. So we were benchmarking those applications. They were quite popular in the Nigerian banking systems. Many established banks had acquired those applications, so we were benchmarking them and building ours. And after a while, I felt that yes, we had more than sufficient capability to build an application that could compete with those foreign applications. And that's why my co-founder and I, Philip, and I were working in the same bank, decided that Let's do it. We suggested it to the bank that, okay, we wanted the bank at that time to spin off the IT department, you know, make us become a company since the bank was already a client, so to speak. They were already paying our salaries. Let's go do this for other banks. But some managers didn't quite agree with the idea, but I couldn't sleep anymore. So we said, let's go do it for ourselves. That's what we are doing today.

And why did you choose a banking sector back then, specifically also software? I guess in '94, right, in Africa, Nigeria, like the banking system wasn't too advanced and on a software level it was even less advanced, right? So why did you pick these sector? Was it for money purposes? Because you can make lots of money in that sector. Tell me a bit more.

Now, you have asked a very pertinent question and you are correct. In 1994, our banking system in Nigeria wasn't nearly as sophisticated as it is today. By the way, Nigerian banking system, particularly our payment system, is clearly one of the most sophisticated in the world today. But at that time, it wasn't anywhere near this sophisticated. However, it was like I said, in those days, if you studied computer science, you were going to try to gravitate to where you could earn the highest salaries. All right. And at that time, it was either you worked in the oil and gas sector or you worked in, at that time, the burgeoning, the growing, the emerging banking system. Because at that time, in 1986, was when Nigeria— 1986 to 1990, Nigeria had a liberalization policy. So they licensed more banks at that time, and many young entrepreneurs emerged. Young ambitious bankers emerged as young CEOs, and they were trying to change the landscape of banking. And of course, this is one of the reasons why banking in Nigeria has become as sophisticated as it is. At that time, it was nearly not this sophisticated at all. So at that time, they were able to pay reasonably good salaries. And remember, I had a choice. If I'd gone into oil and gas, I would have had to work in an environment where I couldn't develop software. I had to run applications. But like I said, when I was coming out of university, I mean, I graduated top of my class. And I knew that I felt I was talented, you know, to build software. So it was one of the conditions that I put on the table and I didn't work for just any bank. I wanted a bank that was building applications. And so you can say some serendipity, but some deliberate and specific choices took place at that time.

And how has the company scaled? Because I guess it started slow and it's long sell cycle. And in Africa, it's relationships, I guess, right? It's this wealthy guy or this prominent powerful person and then getting to the others. So how fast did the company grow? Like, did you struggle for, I don't know, 5, 10 years till you made it? What was the story?

Ah, and that's a big one. Now, so I was speaking to some younger persons a couple of days ago, and I said to them, um, guys, keep at what you are doing, uh, because the road may be rough, but I have a feeling that you are treading a path that's similar to mine. And in saying that, I meant that when I started I thought at that time that all I needed to succeed was being very smart. All I needed to succeed was being able to solve specific problems, and merely because you had the capacity to solve those problems, everybody would accept it. But today, having gone through the kind of exposures that I've had, both in experience and both in education and exposures, I appreciate that Perception and reality sometimes, at least on the short run, are sometimes diametrically far away. So at that time, we didn't have— nobody knew us other than the people that had worked with us before. So, and then you remember, just like you said, Charles, at that time, nobody was used to, you know, somebody that had my color. Doing the kind of things we were trying to do. So when we said to people, listen, we can build a solution to this problem, people just started laughing at us. People looked at us and said, look at— and they called us fly-by-night operators. They called us, you know, some people felt that the reason why we had gone into the business was because we were jobless. And only some people knew that, no, these are not jobless people. By the time we were starting, I had options of working in— in fact, every bank in Nigeria wanted to hire me at that time. The oil and gas sector, I remember at that time, also wanted to hire me, but not many people knew that. So people thought that I was an entrepreneur by accident.

No.

So it was extremely difficult to be accepted, even though we had the stuff that the market needed. But perception was a real big issue. But you know what I found out about life? Again, I talk about serendipity. Is that whilst we were struggling trying to get people listen, I mean, why don't you even try us? Why don't you even listen to what we are saying? We had some few friends. They didn't have a lot of cash, but they knew what we could do, who encouraged us. And at that time, some of them had also become CEOs of very small firms, and then who would call us and say, come and solve the problem for us. And that's how we started. So at that time, what we were just happy with was just showing our capabilities and what I would call the giftings of God in our lives. And we were even prepared to do it for free, just as long as we could eat and we could pay our rent and I could still wear a good shirt and tie. I was happy.

And to where did the business scale today? You have a couple of employees nowadays, team of what, I think. How did the company grow since the first time you started? I think it was like 30 years ago. Where's the company today?

Now, so there are some interesting milestones and turning points. So like I said, we came into the market, not many people believed we could do what we promised to do, but some small firms began to trust us because they also needed solutions that were not expensive, and we were there to be the underdog, to, to do the dirty job. So, but as everything in life, if you hold on persistently enough and you also follow the right trend, and again you have grace of God following you, then many things can happen. So a few things happened. So some of the people who are working in some of those very small banks, small finance companies at that time, started getting jobs in bigger banks. And when they got jobs in those bigger banks that were faced with the problems that they had solved in their smaller banks. Some of them were surprised that, hey, listen, what are you talking about? What are you struggling with here? We know some guys who solved this problem for us. So some of them would invite us to come and meet their bosses because these people couldn't take decisions. They were too young, they were too junior in the ladder to take decisions, but they were our friends. Some of them took us like mentors, even though some of them were, you know, not too young, much younger than us, but they took us as mentors. So they would introduce us to their bosses, and then when we spoke to their bosses, their bosses recognized that these are extremely intelligent people, these are extremely exposed people, and they started giving us opportunities even though we again had to work with small banks. You see, the transition at that time was you go from one level of banking, the lowest, to the next level. So we started getting into real banks by about 1996, 1997. All right. And then the same thing began. So people moved from those smaller banks to the bigger banks and then the same cycle. However, something interesting happened in Nigeria in 2005, and that was either for us a make or break. And what it was was a government policy of banking reforms. In 2005, just like you've noticed, Charles, about the banking system in Nigeria not being very sophisticated at that time, the government of the day at that time had brought in the Harvard-trained economics economist as the central bank governor who was very well exposed and who wanted to get the Nigerian banking system to be very, very global. And so he came up with the idea of consolidation of banks. Now, what that meant was that he said there were too many fragmented banks, too many small banks, you know, who couldn't really move the needle, that let us set up banks that are capable of competing globally. And so he then came up with a new capital requirement for banks to remain in business, and any bank that couldn't meet that capital requirement would have its banking license revoked. As you know, banking is highly regulated. And so there were about 89 banks at that time, and the government proposed that there would not be more than 25 banks after that consolidation exercise. Because what then happened was there was a lot of mergers of banks because they just needed to become bigger banks. Now, the meaning of that, if you understand where we were coming from, was We were working with extremely small banks, and now they had to be consolidated. And the meaning is that all the small banks we were working for were going to be subsumed and absorbed by bigger banks, some of whom we never had the reach to speak to senior people. And that meant that our business was virtually going to die because Um, it meant that our guaranteed income— in fact, I remember that year I had 4 board meetings, and all the board meetings were only specific about how is this business going to respond to these imminent death threats. Because clearly, all— it was very glaring that all our clients were going to become inexistent. And so the response that we had, the debate at the board at that time was Uh, we needed to scale down. How do you scale down a very small company? A company where you have perhaps about— at that time, maybe we had about 10 employees or so. How much down do you want to scale? So you want to become 2, or you want to become 1, a one-man shop? That's imminent death. So, but then that was the realistic thing to do by the eyes of many people, understanding that your income was going to shrink. Therefore, you have to also shrink your expenditure. But we— the board, in its wisdom at that time, decided that no, there are 2 approaches. It's either you shrink and die, because once you start shrinking, you have 10 employees, you're gonna die, or you expand and try, try fighting. And so in 2005, there were very many small companies like mine in the economy in Nigeria. All of us were struggling. Majority of them did the conventional wisdom thing. They, they They shrank, but we expanded. And what we did was we decided that rather than shrink, we would go world-class. And then we started doing things. We, rather than even reduce staff, we expanded staff. We began to talk more. We began to advertise more. I began to speak out more publicly about what we were doing and what we could do. And you know what happened that year? I would say that that was the year that I met— at that time, you know, if you— at that time, the way it was, it was a hierarchical system of sorts. There were certain bank CEOs that, you know, they were like God, you know, if you understand what I mean. So we didn't even think we would ever be able to meet such people, but that year, 2005, I met all of them. Because all of them had heard about our statements about what we were doing. And incidentally, they all had the kind of challenges that we had solutions to. So that was what happened. Then by that year, when we just looked at the skyline and just realized that we didn't have competitors anymore locally, all our competitors were now global competitors. And then what happened? Our revenues began to increase much more than we thought it will happen. So that was a very major turning point for us. Then one of the things we then did subsequently to that— it was good fortune, but then we understood one thing, and I said that to every young entrepreneur: don't eat your seed. So we had made some good money, and at that time we could have done anything we wanted to do with the money. But we decided to invest the money much more in knowledge. We decided to invest the money much more in structure because I believe that companies do not run based on what you have in your head. Smart and world-class companies run on systems, on processes that are well documented and are repeatable. So we invested a lot more in that, invested a lot more in structure. Then that year I began to send people. I said, if that was how— that was when I also thought about going to Harvard myself. So I went to Harvard Business School. I mean, sent my other colleagues to Yale. And, you know, we invested a lot more in ourselves, and that gave us a lot more confidence. And that confidence made us begin to know that we could do a lot more. Because then you go internationally, you go for trade fairs, you go for conferences and all this kind of trade shows. And you take a look at the problems that are being solved globally and you look at them and you know, yes, you can actually play in this field. And that's where we are today.

What are your goals for this year? What do you want to achieve?

I know this year is very straightforward. We are almost at the end of the year, but one of the things that we have to do before the end of this year, we are opening 7 new international offices this year. Did you say 7? 7, yes. 7 international offices this year.

Why is that? Why not stay in Nigeria?

Oh well, I mean, everybody comes to Nigeria to extract money. Why don't we also go there? Take the— I mean, look, listen, it's a global world now, and if you are solving a problem that's a global problem, then you might as well understand that the world is your market. So that's what's going on. By the way, by today, today, even though we don't have those offices, we have clients in about 48 or so countries all over the world that we have clients in. So again, that's already, you know, going on. We have clients here and there, you know, but now we want to really become, you know, begin to play like a global company. That's my view, that's my vision, and we will become global. Um, but again, we start regionally, so we are opening 7 new offices this year.

And what's the challenge in doing that so far?

Well, a lot of things. The biggest being resource allocation. You know, when you are running a company like mine where you are bootstrapping, so just like we started, when we started, we started the company with about $60. All right. Which today is like I said, this, that's much less than that. It's about $2 today. Look, the bottom line is if you start a business, Uh, like that. And we have never raised capital. We have never raised money from anybody. And today the company is completely debt-free. Uh, so we— is— well, I'm not saying whether that's a smart thing to do or not. That's a different conversation. So the biggest challenge you have is resource allocation because you have— you are trying to do this much, uh, things and you have just this much, uh, resources. You know, and then you still keep juggling, juggling the balls in the air. That's the biggest challenge. The market is there now. Of course, the talents are also there. And again, look at it, the talent is there globally. So, you know, the problems are there to be solved. So there's nothing stopping us other than resource allocation.

Right. What kind of trust do you need to earn before someone trusts you with their code in their banking system? Especially in the US, right? When there's local competitors that are established, what's— how do you deal with that?

Now, so it's challenging to get into somebody's territory. Even the good book says it, that nobody gets into a strongman's house except to first of all bind the strongman. It's nearly impossible to do that. And if you look at the way PFS has grown. We've grown kind of organically in a way that— so what happens is that a lot of times you do a good job and your client sees it and then it takes you somewhere else. You know, that's what's happened to us, uh, you know, very, very, uh, significantly. However, uh, we understand that marketing is marketing. How did we get into Nigeria? Because you have asked the fundamental question. Even though we are Nigerians in Nigeria, it's even more difficult to do it in Nigeria because you know why? They would rather believe someone like you, Charles. A lot more people will believe someone like you, someone of your color in Nigeria, rather than believe in me. And that's the way we are wired as a people. But that's fine. So even in Nigeria, when I said— well, in the past, when I said we could do many things, people would just laugh. But today it's impossible for them to do that because there's a track record and because we have solved the kind of problems that people never imagined that we could, and kind of problems that global companies have attempted to solve for us as a nation and didn't quite work. And we did it. So today, I mean, we are doing extremely comfortably in, in Nigeria. Absolutely. I mean, market leaders, well recognized. And okay, we then want to leverage that goodwill because I mean, you cannot just go and start saying to somebody to entrust anything significant to you without a track record. So today, yes, you know, today we go to the central banks of many of the countries and we speak to their governors and then many of them are actually surprised. Oh yes, we heard about your company. Really? So you are the CEO? And when I say I'm the global CEO and some of them look, I mean, when they look at me, I actually still look very young, but many of them don't know my age, which is fine. You know, so that surprises them. But again, it's a booster for us. At least we do have very good track record.

Yeah, yeah. Well, Dr. Yele, thanks for being on. Where can people find out more about you?

Yes. So yes, I'm on social media, on X. It's @yeleukidemi, as my name is spelled, Y-E-L-E-U-K-I-D-E-M-I-A-S. O-K-E-R-E-M-I. And of course, I'm active on LinkedIn as well, and my LinkedIn is Okereemi, just the, the, the way my name is spelled as well.