As countries prepare for easing of movement restrictions and resumption of normal operations in most sectors of their economies, many are convinced that some of the changes put in place within business operations due to the pandemic will force many businesses to transform and reinvent themselves going forward.
Africa’s banking and financial services have been amongst those whose operations have been deeply impacted during the COVID-19 crisis.
According to Mr. Polys Hadjikyriacos, the Chief Business Development Officer at NETinfo, a company that offers digital banking products, after the current crisis, banks will need to redefine their vision and consider a new digital strategy, whilst re-evaluating their competition.
“The financial environment is changing, and banks need to co-exist with the fintechs and telcos. Banks will need to find synergies between themselves, their environments and fintech companies,” said Mr Hadjikyriacos during a recent webinar with African bank executives and the media.
“They will need to create new eco-environments built over Open Banking secure API services. They will also need to ensure they have the right tools and partners in place in an agile environment. Use of AI tools will become commonplace and omnichannel will be a necessity.”
The virtual session was hosted on Wednesday May 27, 2020 to discuss how banks can accelerate digital transformation to meet customer demands for seamless digital solutions that are consistent across all channels during the COVID-19 pandemic.
The technology generation gap between older and more youthful customers continues to shrink, with those who were not previously digitally engaged being forced to do so, while demanding prompt and direct access to their funds, irrespective of age.
Thomas Yieke, the Business Development Manager and Kenya Country Manager of NETinfo said that the use of internet banking has become very crucial for corporate customers while individual customers prefer mobile app-enabled services. Some corporates, he added, are also keen on how they integrate their systems with fintechs via APIs for better service provision.
Yieke cited the example of KCB currently handles over 90% of its transactions via digital and online digital platforms saying this has been enabled by consistent onboarding of customers and a secure authentication process that takes care of data and information security concerns of customers”.
“However, amidst this transformation, various challenges still exist. One of the challenges we see is that of onboarding, where the challenge is two-fold – one is from legislation and the other is of technology. We have seen a huge demand for remote customer onboarding, with technologies such as face matching and liveness test with banks addressing the requirements of their central banks.” stated Mr. Hadjikyriacos.
“Within Europe and USA for example, we see very stringent regulations in place for new customers. Within Africa, we have seen both flexibility and an embrace of technology from some central banks. As NETinfo, we have supported banks to use either fully automated or semi-automated onboarding processes depending on the central bank regulations,” noted Mr. Hadjikyriacos.
“We also see a growing importance of the personal account manager or PAM, which has been extended from private banking to all types of banking customers. Video conferencing has also become a requirement to facilitate virtual face to face interaction.”
The COVID-19 crisis has led to a change not only in the way financial institutions conduct business and engage with their customers, but how employees work and the way consumers manage their finances.
This tranformation, adds Mr. Hadjikyriacos, will also affect the overall future of financial inclusion in Africa.
“Banks need to work proactively with their customers and have a better understanding about their needs and offer this as a value-add to them, proactively. Personal financial management (PFM) tools enabled with Artificial Intelligence (AI) will become commonplace, with PFM tools able to provide detailed information on their current and future financial activities-combining forecasts with real data. These tools will provide customers the option for real-time decision-making on recommended services such as credit facilities or a microloan based on their cash predilect flow in the next quarter,” he noted.
Banks, added, can offer their customers unique customer experience based on user’s real-time activity, such as next best screens and actions. This, he noted, would result in increased user engagement and interactions enabling the bank to offer personalized marketing messages during product and service campaigns.
On the future of cash, cheques and cards, Mr. Hadjikyriacos projected that “cards will coexist for some time with more innovative ways of payments such as mobile wallets and e-accounts” while the industry would see a reduction on card transactional charges.
“Even with cheaper rates, card usage is expected to drop significantly. We expect a huge increase in fintech institutions providing more tailored digital services to their customers,” he projected.
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