BANKING
‘ How to Win in an Era of Mobile Money ’, confirms that banking executives in West Africa are feeling the impact of mobile money on their business . It goes on to relay that the major threats emanate from the potential for telecommunication companies to inject themselves into the consumer banking space . According to the survey , mobile money is threatening payment solutions offered by West African banks – a threat that applies to both bill payment services and point of sale ( POS ) payment offerings .
Serve or be served
It remains to be seen which bank is going to proactively grab the opportunity . Or are they going to wait for someone else to seize it ? And the most significant question remains : why isn ’ t there greater success with traditional banks offering mobile money in West Africa ?
A need to overhaul
Banks have to realise mobile is the future . It ’ s here now , today . It has to be top priority . Or , as has happened in East Africa , MNOs will become the dominant player in financial inclusion and payments – traditionally the domain of the banks . MNO ’ s today have extended their service offering beyond payments and money transfers to offering savings and loans products .
Once customers are serviced with new offerings from MNOs , it ’ s going to be horrendously expensive for banks to ever get them back . In fact , no amount of money may be enough to reclaim lost customers . There ’ s an urgent need for strategic review to ensure mobile is at the top of the banks ’ strategic agenda . All too often , the reason given by banks as to why they haven ’ t capitalized on the opportunity is that they have other priorities . What can be more important than protecting and growing your customer base and market ? Banks in other parts of Africa are successfully and profitably reaching the unbanked and under-banked segments and benefitting from cost reductions and efficiencies in technology – particularly where mobile is concerned . It ’ s widely recognised that regulation favours financial inclusion in Ghana , and that it ’ s one of the most ‘ ready ’ for digital financial services : 92 % of the population has the required IDs for KYC purposes ; 95 % have basic numeracy skills ; 91 % own a phone ; and there ’ s 99 % awareness of mobile banking . Very few countries are as fortunate as Ghana to have all these basic ingredients in place for success .
Despite this , penetration rates are nowhere close to what they are in other parts of East
OF ALL FINANCIAL ACTIVITY IN GHANA , 98 % IS STILL IN CASH – COSTING THE ECONOMY , INDIVIDUALS AND BANKS MILLIONS EACH YEAR . and Southern Africa . Of all financial activity in Ghana , 98 % is still in cash – costing the economy , individuals and banks millions each year . A recent article in Ghana Business News explained how Stephen Abban , Group Head of Personal Banking at Access Bank , has gone as far as to call on stakeholders at banks to develop a national ‘ cashless ’ strategic plan because of the benefits it yields . In spite of these prophetic plans , it seems to be all talk and very little action .
The dangers of dawdling
With all the ingredients in place – what could be holding banks back ? In the last 12 years , WIZZIT International has partnered with banks in 14 countries ( primarily in Africa ) and proved that every one of these partner banks is profitable with their mobile banking channel . So the business case is proven and in place . Regulation is supportive , the market is ready , skills and technology are available – and there ’ s awareness . All that ’ s required is an innovative bank with a committed management team .
Banks cannot and should not go it alone in this space . Banks that are successful in financial inclusion recognise the value of partnerships in expanding access to new customers , making a wider range of products available , and sharing costs and risk . WIZZIT International has supported this view and sees banks as key drivers in this space .
Banks play a crucial role in enabling growth and progress in the economies in which they operate . At the heart of it all , banks must do real things for real people and work to fuel inclusive economies from the centre , to enrich lives and transform societies .
2016 | Business Times Africa 31