The Proposal

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Executive Summary:

FinTech (Financial Technology) is an economic industry composed of companies that

use technology to make financial services online and therefore more efficient. A

massive improvement from the traditional (manual) banking means of rendering

financial services. Fintechs provide financial services such as basic banking, lending,

money transfer, online payments digitally.

The net value of fintechs have shown massive growth in the past few years and is

statistically predicted to grow even more in the coming years, which provides a very

lucrative business opportunity.

Below shows the growth of the global net value of fintechs by year;

 2018 ($91 B)

 2021 ($155 B)

 2025 ($300 B)

Source: Statista.

As seen above, the fintech sector grows exponentially each year due to the rapid

adaptation of the internet especially within the financial sector.

Virgo™ will be a financial technology that offers financial services to the public (end

users and institutions).

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Background:

A large amount of the world’s population today prefers to do their banking activities

online, in fact statistics shows that 68% of the world’s population that are dependent

on banking and technology purchases and to do their banking online. And 68% is a

very value, thus an opportunity arises for making business profit by rendering

financial services.

Objective:

This project/application generally aims to provide financial/banking services to end

users and institutions, breaking the limitations of traditional, manual banking. Some of

these services will be:

 Electronic fund transfer

 Bill and merchant online payment
 Cryptocurrency transfers and transactions
 Electronic/Online Piggybank saving and stashing
 Foreign currency accounts
 Personal smart finance and asset manager
 An online payment gateway service
 Debit cards for ATM & online payments
 Hotel, flight and tourism bookings and recommendation

Others are payment requests/invites, payment with QR codes, blockchain technology

integration, a native cryptocurrency etc. the special aspect of the application is its

integration of regular online banking and cryptocurrency services, This can enable

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users transfers funds to anywhere in the world, which is practically one of a first of its

kind within the country or continent.

Project Work-plan and Architecture:

The project (Virgo) will be an online bank, so basically it will be online and available

in cross and native platforms in the form of mobile and or web application, hosted by

a proficient online server. This will be advantageous because it means very little

dependence on geographical location and redundant human resource.

The software system will be developed and deployed by a team of software

contractors and then will be managed, and maintained by the owners with very

minimal but essential number of human resources.

The software system will consist of a front end (the user interface) which will be

interactive and user friendly and the back end (the server side) which will be secure,

fast and responsive with a proper data and database management system.

Proper licensing and regulatory compliance which include EFCC, CAC, CBN, FDIC

will be established to avoid unnecessary fees criminal consequences.

There will also be a necessary collaboration with traditional banks (like UBA, Fidelity

etc) because the CBN does not grant banking services license to basic Fintechs as of

now and to also to be able to insure user deposits with the FDIC.

Human Resources:

The banking software system (Virgo) due to its nature (being online) would only

require minimal but very efficient and specialized workforce. The workforce will be

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responsible for its management and maintenance. This workforce is completely

different from the contractors of the project.

Some of the important employees that would be required to manage the business

(Virgo) are listed:

 Manager/CEO
 Banking & finance expert
 Customer service
 Software system maintenance and upgrade
 Database and data management expert
 Cyber security expert

Other personnel which will be based on contractorship are marketing, risk

management and lawyers.

Business Case:

The goal of any business or venture is to acquire profit. The Fintech business poses

one of the most obvious businesses within the tech sector to acquire serious profits

because it deals directly with money. The number most obvious source of revenue is

from charging commissions for rendering outstanding financial services, as plenty as

the profit from charging of commission will be, it is only a mere tip of the iceberg.

Below is an explanatory list of sources of revenue in this business;

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 a) Charging of commission;

These charges are levied when users simply use the application for their

financial needs and are deducted from their accounts directly. Examples of

these charges are;

 Account maintenance fee

 Debit card maintenance fee
 Debit card purchasing charge
 Electronic transfer charge
 Bill or merchant payment charge
 Crypto currency transaction charge
 Payment gateway fees and charges
 Commission from referring customers to hotels, flights etc.

Other main sources of acquiring revenue from this business venture are;

b) Sales of Bonds and Investments:

Bonds are financial instruments or debt security (money) that banks or

government bodies lend to investors (which can be us, the owners of the bank)

or institutions within a period of time, which will be returned with agreed

interest.

Banks and other financial institutions are by law required to keep at least 25%

of their total user deposits within the Central Bank for economic and intra-

banking purposes, leaving the remaining 75% to the mercy of the owners of the

bank. The 75% is then sold as a bond to investors or institutions for

development and investment purposes, which when the bond matures (lend

time period elapses) yield profits of up to 20% from interests, so technically,

the more user-deposits a bank has, the more profit they gain from interests from

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 bonds sold. For example, a bank has a total of $200,000,000 total user deposits

at least $60,000,000 (which is 25%) stays with the CBN, while $140,000,000

can either be sold as a bond, or invested directly by the bank owners which

with proper risk management and investment strategies should return at least

20% ($28,000,000) by a quarter of the year (every four months), that is how

long the bond sold or investment should last to avoid the bank becoming

insolvent or suffer from funds mismanagement (which is a financial crime).

Bonds can be sold two or three times a year.

c) Selling User Financial Data:

Data is a resource of insurmountable importance to businesses of any nature. It

helps in proper decision making which a business cannot hope to survive

without. Companies collect and share these data, which when analyzed can

show the behaviors of individuals/customers which a company’s decisions will

be based on. While these data are beneficial to us, they can also be sold for a

fortune to other financial or any kind of company as long as user privacy and

compliancy is observed. No business today can survive without data. The level

of demand of these data is determined by the market and the kind of data.

Most tech companies that offer free services today mostly feed off user data

that they sell; this will become their main source of revenue.

Budget:

The budget will be determined by the entire factors that are required to get the

software system up and running, along with marketing and licensing. These factors are

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the project contractors, server hosting, human resources (only 3-5 workers will be

required at the launch of the application), testing, licensing and “aggressive”

marketing. Licensing include CAC, CBN, FDIC compliance etc.

These are examples of some of the initial budget for some of the most prominent

fintech start-ups within the United States (these amounts may mean higher today due

to inflation);

 Revolut ($175,000)
 Acorns ($60,000)
 Finch ($80,000)
 ZestFinance ($90,000)

Note that starting up a fintech in the United States is far more expensive than in West

African countries like Nigeria.

A calculated estimate of about $35,000 will be required to kick start the application at

the initial and most important phases, and will even cover part of the marketing.

Conclusion:

There is obvious opportunity in the Fintech market with very high profitability. We

could be realizing 30% - 60% net profit per annum and even more, as long as the

system works, and is efficient, easy to use, fast, secure, reliable and proper risk

management is observed when handling user deposits.

Ingenious and aggressive marketing is a key factor in the success of the Virgo™

application.