Bankers urged to go digital for sustainable growth

Bankers from Sub Saharan Africa and China unanimously agree that digitisation of the sector will give it resilience against the current Covid-19 pandemic and enable sustained growth after.

Speaking during a virtual financial services industry summit, Liao Yong, vice president of Huawei Southern Africa Region, said advances in ICT present 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. But how much we can unleash the power, depends on how much and how soon banking sector goes digital.” Liao said. 

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. 

Speaking at the online event, 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 needs for digital transformation in banking sector. 

 “The declining use of physical branches is likely for many customers to remain a permanent feature of their lives. The reality is this is likely to accelerate a multi-decade trend we have already 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. This basically brings us to a new model of banking…we moved to this low friction banking embedded in the world around us,” said King. 

In China, bucking the decline in the first quarter GDP, the financial sector recorded a 6 per cent year-on-year growth. Analysts attribute the growth to the sector’s years of unremitting efforts in digital transformation.

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 can’t come true without leveraging cloud, Artificial Intelligence (AI) and Big Data. 

“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.  

According to Alex Siboe Wekunda, head of DFS, KCB, said 97 per cent of all transactions are done digitally which lead to substantial growth during the pandemic. Luckily enough, we had invested well in our platform, so we are able to handle the traffic that comes through this ecosystem. And Joshua Oigara, CEO and MD, KCB Group PLC, said KCB will continue to accelerate that investment beyond just lending platform, which has been very successful.