‘Digital Technology Will Build Resilience in Banking Sector’

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By Emma Okonji

Bankers from sub-Saharan Africa and China who attended the recent Huawei sub-Saharan Africa Financial Services Industry Online Summit 2020, have agreed that digitisation of the sector will give it resilience against the current Covid-19 pandemic and enable sustained growth in the post Covid era.

The pan-African conference with the theme, “Accelerating Digital Transformation, Enable Business Growth Again,” was attended by delegates from banking, telecoms operators, fintech and Information and Communications Technology (ICT) sectors, urged the banking sector to embrace digital technology in order to build resilience and sustainability.

Speaking at the opening ceremony, Vice President of Huawei Southern Africa Region, Liao Yong, said advances in ICT would present unique opportunities for the banking sector, especially when almost 70 per cent of the region’s population don’t have a bank account.

“All of these ICT advances will be critical enablers to a thriving banking sector in sub-Saharan Africa. As we can see, the merging of these two curves of ICT and banking services is powerful. But how much we can unleash the power, depends on how much and how soon banking sector goes digital.” Yong said.

The summit agreed to the fact that there had been a rapid uptake of mobile technologies in the sub-Saharan region with strong economic growth in the past two decades.

According to statistics by GSMA, 4G, mobile broadband technology, adoption would overtake 2G in 2023 and the total of unique subscribers in sub-Saharan Africa would reach 600 million by 2025, representing half the region’s population.

Also speaking at the event, Author of Bank 4.0, a New York-based mobile banking startup, Brett King, said the behavioural changes that came with coronavirus further underpins the needs for digital transformation in banking sector.

“The declining use of physical branches is likely for many customers to remain a permanent feature of their lives.

“The reality is that this is likely to accelerate a multi-decade trend that we have already seen towards digitisation.

“So when we look at the architecture of banking moving forward and the real elements that have been accelerated during the coronavirus period, you can see that that shift to digital is creating much more aligned, some digital experience.

“This basically brings us to a new model of banking, where we moved to this low friction banking embedded in the world around us,” King said.
Giving details of China’s activities with the banking sector, participants from China, home of Huawei Technologies, said in China, despite the decline in Q1 GDP, the financial sector recorded a six per cent year-on-year growth.

They claimed that analysts attributed the growth to the sector’s years of unremitting efforts in digital transformation.

The former Chief Information Officer of China Merchants Bank and current Chief Digital Transformation Officer of Global Financial Services in Huawei’s Enterprise Business Group, Chen Kunte, said digitisation would give the banking sector the resilience it needed in the public health crisis, adding that banking everywhere can’t come true without leveraging Cloud Technology, Artificial Intelligence (AI) and Big Data.

“We need to restructure banks’ ICT platforms from legacy architecture to cloud-based, open architecture by building AI-Powered and Data-Driven platforms to expand the way financial institutions engage and interact with their customers, and accommodate more innovative business models and service scenarios,” Kunte said.

Banks from the region shared some case studies on digitisation in banking services in the region.

Head of Data Analysis and Product Management at FNB, South Africa, Lucille De Kock, introduced FNB’s fundamental shifts across all dimensions to transform the bank into a helpful, trusted and people centric money manager, leveraging digital and data platforms.

According to the Head of DFS, Alex Siboe Wekunda, 97 per cent of all transactions were done digitally, which led to substantial growth during the pandemic. “Luckily enough, we had invested well in our platform, so we are able to handle the traffic that comes through this ecosystem,” Wekunda said.