Digital transformation ranks alongside changing demographics, increasing customer expectations and industry consolidation as one of the major factors that will shape the future of African banking.
While cash is still dominant, the shift to digital banking increasingly is becoming the driving force across our continent. It is no secret that Africa’s high mobile phone penetration, expected to rise to 85% by 2020 (when there will be 498m smartphones in use), is enabling banks to connect with millions of new customers, while the breakneck pace of innovation from fintech start-ups shows little sign of slowing.
The high number of unbanked and underserved customers, together with still growing economies and rising demand for more sophisticated financial services, represents a significant opportunity for Africa’s banking industry to provide new and innovative ways to access financial services beyond the reach of traditional branch and ATM networks.
Digitalisation also has the potential to alleviate some of Africa’s greatest economic and structural challenges. Digital collections, such as payments for utilities, will contribute to combining enterprise with the passion and ingenuity of the individual.
If these anticipated benefits are to be fully realised, building the capacity of end users to adopt technology, as well as creating an enabling regulatory environment, will be as important as the solutions themselves.
This presents a number of challenges, including improving financial literacy, ensuring that regulation keeps pace with innovation and maintaining trust with every digital transaction, especially in the light of growing cybersecurity threats.
Nevertheless, the rapid uptake of mobile wallets indicates that African consumers more readily accept digital technologies than their Western counterparts, so they represent a key weapon in a bank’s armoury to maintain competitive advantage.
Ecobank was in the vanguard of African banks to recognise the need to harness technology to unleash the full potential of our unparalleled pan-African platform. Utilising technology to automate internal processes, improve compliance and monitor performance, we are increasing efficiency and achieving considerable cost savings.