The digitalization of banks is an opportunity across Africa has the potential of addressing the challenges of financial inclusion and the rapid scaling up that is needed across the continent. This was the main discussion during a recently held webinar discussion hosted by TagPay and moderated by Omar Ben Yedder from African Banker; Yves Eonnet (TagPay), Djiba Diallo (Ecobank Group), Obinna Ukwuani (Bank of Kigali) and Carl Manlan (VISA).
Despite the rise and accessibility of digital technology, cash currently leads the way in the majority of Africa, but to increase financial inclusion, which is increasing already through financial technology, digital banking will need to have continued growth.
“The time we are entering is very exciting for us [FinTech’s] and for you [banks]. The expertise that we have opens up banks to new ventures and new capabilities, especially due to the low cost and speed of deployment,” said Yves Eonnet, Chairman of TagPay.
Banks have to be equipped with the tools that enable them to pre-empt the market and respond quickly to customer demands in a secure and cost-effective way. For the banks to stay relevant Djiba Diallo, Senior Fintech Advisor, Ecobank Group said that it is important to understand fintech companies and leverage the opportunities. Banks are still there and still needed but need to adapt to what is happening on the continent and partnering with fintech companies is key to doing that.
Many banks are partnering with fintech startups to help them digitalize, enabling them to expand their services and reach more customers at the same time.
“Systems are designed to target new customers, financial inclusion, or new sectors that are poorly served. This is exciting in Africa because this for me, is the beginning of a new era for banks, and all banks in the world are looking at what is happening in Africa. Because in Africa you have this situation, which is unique, with the financial inclusion issue where banks need to attract new customers, therefore you have customers to serve, have the technology to do it, have the dynamism of the culture that makes it possible and that is where we are to build the bank of the future. I often say the Silicon Valley of banking is not in California but in Africa, it is where it is happening," added Eonnet.
Banks are going into a new world and need new platforms, new technology, and new architecture, the old core banking system is being surpassed and a new core banking system is needed. FinTech’s will help banks provide a better service to customers, working together and within the same regulatory framework. Digital banking helps with financial inclusion and formalizing the economy and banks, globally, need to react to the digital revolution and customer demand.
Financial inclusion also enables banks to feed new businesses and entrepreneurs, and hence builds the economy at the same time. Using the technology of mobile telephones, digital banking will have a significant role to play now and in the future.
“Because we are cash dependent the opportunity to introduce digital payments to help promote financial inclusion is critical and to that we need to ensure that there is adequate financial literacy and skills building along the way to make it work for more people,” said Carl Manlan, Vice President, Head of Social Impact, CEMEA, VISA.
A partnership between banks and fintech startups will not only help reach more customers but also build financial literacy amongst consumers. In addition, the industry will need to develop talent and skills, and this can be done across Africa ensuring the industry continues to grow.
Subscribe to our Daily Brief newsletterShare this via:
Insights and analysis into how business and technology impact Africa. We promise to leave you smarter and asking the right questions every time after you read it. Sent out every Monday to Friday.