Banks told to digitise, build resilience as Corona bites

Monday, June 8th, 2020 00:00 |
Cabinet Secretaries Public Services & Gender Margaret Kobia (second left), Labour and Social Protection Simeon Chelugui (centre) and ICT, Innovation and Youth Affairs Joe Mucheru listen to Ahadi Kenya Chief executive officer Stanley Kamau (right) when they flagged off hand washing stations, face masks and girl’s kits to six counties at Kenyatta International Convention Centre (KICC) in Nairobi. Photo/PD/Alice Mburu

Sub-Saharan Africa’s banking sector has been urged to fully digitise in order to build resilience and sustainable growth post Covid-19.

Lenders at the Huawei Sub-Saharan Africa Financial Services Industry Online Summit 2020 agreed that digitisation of the sector would give it resilience against the current Covid-19 pandemic and spur sustained growth in the post corona era.

Held under the theme “Accelerating Digital Transformation, Enable Business Growth Again”, the conference was attended by 1,200 delegates from  banks, telco operators, fintech and ICT services companies. 

Vice president of Huawei Southern Africa Region Liao Yong said advances in ICT presented unique opportunities for the banking sector, especially when almost 70 per cent of the region’s population don’t have a bank account. 

“All of these ICT advances will be critical enablers to a thriving banking sector in sub-Saharan Africa.

As we can see, the merging of these two curves of ICT and banking services is powerful,” he said.

“But how much we can unleash the power depends on how much and how soon banking sector goes digital,” Liao added.

There has been a rapid uptake of mobile technologies in the region with strong economic growth in the past two decades. 

According to statistics by GSMA, 4G, mobile broadband technology, adoption will overtake 2G in 2023 and the total of unique subscribers in sub-Saharan Africa will reach 600 million by 2025, representing half the region’s population.

Brett King, author of Bank 4.0, a New York-based mobile banking startup, said the behavioural changes that come with coronavirus further underpins the need for digital transformation in banking sector.

The declining use of physical branches, he added, was likely to remain a permanent feature for many customers, and accelerate a multi-decade trend that has already been seen towards digitisation. 

“So when we look at the architecture of banking moving forward and the real elements that have been accelerated during the coronavirus period, you can see that that shift to digital is creating much more aligned, some digital experience,” King added.

“This basically brings us to a new model of banking…we moved to this low friction banking embedded in the world around us”.

Chen Kunte, former Chief Information Officer of China Merchants Bank and current Chief Digital Transformation Officer of Global Financial Services in Huawei’s Enterprise Business Group said digitisation will give the banking sector the resilience it needs in the public health crisis. 

Banking everywhere, he added, can’t come true without leveraging cloud, AI and Big Data.

Legacy architecture

“We need to restructure banks’ ICT platforms from legacy architecture to cloud-based, open architecture by building AI-Powered and Data-Driven platforms to expand the way financial institutions engage and interact with their customers, and accommodate more innovative business models and service scenarios,” Chen said.

Banks from the region shared some case studies on digitisation in banking services in the region.

Lucille De Kock, Head of Data Analysis and Product Management at FNB, South Africa, introduced FNB’s fundamental shifts across all dimensions to transform the bank into a helpful, trusted and people-centric money manager leveraging digital and data platforms.

 Alex Siboe Wekunda, head of DFS, KCB, said 97 per cent of all transactions were digital, which led to substantial growth during the pandemic. 

Chief Executive Officer at KCB Group, Joshua Oigara said the bank would continue to accelerate that investment beyond just lending platform, which has been very successful.

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