African banks in digital race rollout
African banks are outperforming each other as the transition to digital services rolls out although a new report has found there is still more work to do when it comes to robotic process automation, QR code payments and blockchain technologies all of which are impacting the financial and insurance industries.The continents leading banks are offering retail customers a wider range of account products online compared to their local counterparts.The report whose copy your blogger has, looked at the capability of 50 of the largest banks in Africa to acquire customers over digital channels and evaluated their progress since 2015.Most of the banks are focusing on transferring its traditional services to mobile banking with the aim to reach millions of active mobile banking accounts or users. They are also setting up millions of dollars in investment for financial technology solutions with the diverse technologies that are popular for banks that will employ them to develop new services to support their customers. When QR Code technology was launched in South Africa recently, it has allowed the bank offering it to facilitate money transfers by their customers via e-payment.The use of software with artificial intelligence and machine-learning capabilities to handle high-volume, repeatable tasks that previously required a human to perform, will be a boon for the insurance and banking industries in Africa for decades to come. However, advances in digital and mobile service were not uniform across the industry or in different countries.The biggest surprise was the amount of progress that a few big banks have made and there were some notable exceptions, most banks in Nigeria in particular who showed very significant improvements over the 2015 numbers.Digital technology was adopted early in Nigerian banking and that was a possible factor in the results.
Maybe it’s an attitude of the Nigerian banks that they wanted to be early adopters.African big banks market is a bit smaller, it’s a bit less of a risk and maybe easier to implement and so they’ve been further ahead.In Kenya, a developed superannuation industry has forced the Kenyan financial services industry and consumers into a digital mindset earlier than you hardly see in other countries.The report found that there had been major improvements in customer acquisition for personal banking products, with a big increase in the banks’ ability to offer products via mobile platforms.The number of personal banking products that could be set up using a mobile device jumped 22 per cent in Kenya, compared with eleven and seven per cent rises in South Africa and Nigeria, respectively.According to the report, African Banks have primarily focused their efforts on the consumer and personal banking segment instead of the business and wealth management segments, which is more complicated and requires more documentation.To retain their edge, leading banks need to keep ahead of the disruptors coming from the fintech market.The challenge is going to come from non-banks, who offer great customer experience, who offer new products, and if the traditional banks don’t keep up, they will face an uphill battle to survive. Banks will in particular need blockchain technology, which is an advanced solution for the financial and banking industries to facilitate payment between various areas such as logistics, transportation, cash management and cross-border transactions between banks and non-banks. To boost digital transactions, regulators in Africa, the Insurance sector and Broadcasting, Telecommunications industries need to work together so that their regulations run the same direction. Then African businesses can provide new services in the digital era to suit the demands and lifestyles of their customers.Countries like South Africa, Nigeria and Kenya will be leading in digital payment in Africa since banks and regulators work together to provide new payment channels.