How technology is changing Africa’s banking landscape

Innovation and transformation will be key themes in the African banking sector as we move into 2019.

Many of those who previously lacked access to financial services are now able to set up accounts and make transactions thanks to the advent of new digital banking channels, primarily driven by the availability of mobiles. According to the ICC Banking Commission, growth is afoot, with nearly 9 in ten (89%) of bankers in Africa saying they believe growth in the sector will accelerate over the next 12-months.

A changing consumer landscape

Motivated by a desire to reduce costs while improving customer convenience, we can expect to see banks in Africa chase innovation and new ideas as the socioeconomic benefits of alternative payment channels become increasingly realised.

Changes in demographics, combined with economic development and better availability of cloud technology are catalysts. They are now allowing banks not only to explore but to implement new ways of engaging customers – albeit with a greater sense of urgency than in previous years as competition stiffens and the margin for miscalculation diminishes.

African banks now aim to go beyond mundane cash-withdrawal transactions and engrain financial inclusion achieved through technological innovation into their offering. Reaching rural and unbanked areas using technology is no longer as ‘nice to have’ but more of a ‘must have’.

Carefully managed change

With this change, however, comes a responsibility to ensure the process is managed properly. This will be a key focus throughout 2019; mitigating risk.

Banks must aim to be vigilant and guarantee service quality, competitiveness and continuity as these changes take place, meticulously testing systems properly and seeking to identify potential issues that are beyond the conventional. It is no longer a case of being responsive to fixing problems but more of pre-emptive operational excellence to circumvent any potential issue before occurring to minimise any service interruption.

As is heavily reported in the press, outages and other IT issues bear significant consequences – and not good ones. Negative social media and press won’t only act as a blockade to on-boarding new customers, existing ones might leave and confidence will be shaken. After all, banking access isn’t the only thing technology is democratising, so is access to 24-hour news. Recently, a number of service outage incidents have associated few banks with reputations ranging from unreliability to a lack of ability to cope up with technology challenges.

Trusted transformation

The caveat in the race to innovate is that it is tempting decision makers in banks to unwittingly compete in a tortoise versus the hare contest, and we all know who wins that race.

Change and the move toward alternative channels needs to be facilitated through cloud-native technology, test automation and the right team. Transformation is, of course, crucial but let us hope that banks approach and manage it sensibly by choosing technology partners with the right expertise who can deliver the revolution banks and consumers want.