Bankers should start planning now how to work from home and get used to it for that is the future of the banking industry as digitisation continues to challenge the very way they operate, Geoffrey Shimanyula, Chief Commercial Officer, Liquid Telecom has said.
Flanked by Andy Haggins, the Liquid Telecom Group Managing Executive, Solutions & Innovation, Shimanyula underscored the fact that banks and now the Savings and Credit Cooperatives (SACCOs) in Kenya are fast realising the challenges and opportunities of fintech revolution.
“Quite a number of banks have already announced a number of digital banking initiatives, ranging from separate digital-only banking platforms to strengthening of existing mobile banking services, aspects that will significantly reduce existence of bank branches as the fraternity will largely refocus on staff on value-added services rather than repetitive and less-profitable operations,” said Shimanyula.
As this fundamental changes happen Internet of Things will becoming a reality, Shimanyula further projected during a panel discussion at CIO East Africa Breakfast Series lined to connect solution providers and varied sectors players.
Haggins noted that the future of banking is already on the wall based on today’s customer behavioural patterns which significantly amount to time they spend on their smart phones and demand for convenience. “It is the customers who will bring down those bank branches as they become more active on social media, make purchase decisions based on recommendations while on-the-go, and need for flexibility,” added Haggins.
Shimanyula projected that since digitisation promises to automate and improve many banking processes, the East African fraternities in the financial sector, more especially the banks should start bracing the fact that internet penetration to homes in larger capacities such as five gigabytes will be a feature in homes.
“Several homes shall have access to the Internet with a five-gig capacity and this is a factor that should lead the banks to start reviewing about their branches now,” said Shimanyula.
Concurring with Shimanyula both Samuel Nyambu and Adan Abdulrazak, CIOs of Mwalimu National and Stima SACCO respectively noted that owing to customer demands and expectations as well as increasing technology that is fuelling emergence of significant new competitors, several branches of banks will decimate and the value of entities like Liquid Telecom which are committed to offering a digital play is today making more sense.
Thomas Yieke,NETinfo’s Business Development Manager – Africa in partnership with Liquid Telecom, said the whole spectrum of going to the big branch is inappropriate.
“Several financial businesses are becoming smaller as the whole aspect of banks going to the big branch environment drifts,” said Yieke adding “Today’s financial services with the lending platforms emerged as start-ups and are now on the digital play environment.”
Going forward as companies begin to look at the investment they want to make in the financial digital space, it would be prudent to avoid investing on massive capex that would involve buying licenses, working hard on their implementation then managing them and ultimatley going through the rigours of of the annual process of maintaining those licenses said Yeike.
“Through partnership, Liquid Telecom offers financial institutions that include the banks and SACCOs the option to circumvent the strenuous challenge of securing licenses by offering an interface which would configure a digital play, which would include for mobile money configured to client services and availed to run on the client’s infrastructure,” said Yieke.
Netinfo has signed a long term contract with Kenya Commercial Bank for internet banking, ABC Bank, Family Bank in Kenya and CRB Bank in Tanzania.
Andy Higgins who delivered a keynote presentation during the session asserted that banking entities and SACCOs have an opportunity to discard branches in an effort to commit their expertise in growing their customer portfolio and letting technology partners to render appropriate customised solutions.
Commenting about about the future banking, Higgins said: “Will the branches of the banks be as important as they are today? Absolutely not. They will be significantly less important. Most of them will whittle while a few will play different roles, including being a destination for complex advice and problem resolution.
Already some banking establishments are experimenting with very large showcase, highly tech-enabled hub branches that are surrounded by much smaller branches in different formats, some ATM-only, some with a few or even no tellers. Some have had quite a lot of success with those. There are others that are thinking that the branch of the future may be a very different model, where they have six to ten strategically located branches in a city that supports a very strong digital presence.
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