August-2019

46 / TREND / Consumer banking
TREND / 47
Stocksy
13
The volume of cashless transactions in
Africa grew by 13% per annum
between 2014 and 2016
86
Africa’s banking market earns approx.
US$86 billion in revenue
100
In Africa today, there are 100 million active
mobile money accounts
129
The revenue from consumer banking in
Africa is expected to reach US$129 billion
in a recent interview with Techmoran. It’s a sign that international
banks are jumping on the bandwagon; in this case, with the help
of YUP, another mobile alternative to the traditional banking
model. “We want to be part of this revolution by offering a simple
transactional tool that’s accessible to all citizens, including the
80 percent who don’t have bank accounts.”
HOT ON THEIR HEELS
A number of the continent’s leading banks have been making
progress through end-to-end digital transformation, sales
productivity and back-office optimisation. A few others have
even launched fully digital banks, such as ALAT bank in Nigeria,
which targets younger customers who are an underserved
segment in Africa’s largest economy, where more than half of
the population is under 30. Some international banks are also
going digital in Africa. The UK’s Standard Chartered Bank, for
example, has opened digital banks in Côte d’Ivoire, Uganda,
Tanzania, Ghana and Kenya. The freshly introduced, fully
digital online banking solution enables customers to open their
own accounts in 15 minutes without ever having to step into a
banking hall.
With fierce competition from non-bank lenders – think
smartphone apps like Saida in Kenya and Aella Credit in Nigeria
– there’s no doubt that the banks still have work to do. This is
good news for African consumers who are finally getting access
to a wide variety of affordable and easily accessible mobile and
digital financial products, not only in payments and deposits,
but across the full spectrum of financial services. It’s fair to
conclude – as Managing Executive, Consumer Banking at Nedbank
Mutsa Chironga does – that today, “Africa’s banking
markets are among the most exciting in the world.”
“In Kenya, international banks were the leading players in
the market for a long time,” says Jared Osoro, Director of the
Kenya Bankers Association Centre for Research on Financial
Markets and Policy. “They used an international lens to simultaneously
look at local and economic dynamics therefore missing
crucial opportunities.”
Yet, in the last 15 years, the local banks have made a comeback.
“They better understand the behaviour of local people,
are quick to embrace mobile money technology [an area in
which Africa is a global leader] and are never short of clever
solutions that fit the market,” adds Osoro, before pointing to a
telling example: the partnership between Kenya’s Commercial
Bank of Africa (CBA) and Safaricom.
MOBILE LOANS
One of the country’s top performing banks in recent years,
CBA knows where the business opportunities lie. By joining
forces with the Nairobi-based telecom giant, the CBA was able
to roll out M-Shwari: a low-cost mobile phone service for micro
loans and savings. Made possible via Safaricom’s ubiquitous
mobile money service M-PESA, customers can borrow between
US$1 and US$500 at a flat rate of 7.5 percent. CBA offers
better interest rates – and higher credits – to customers who
exhibit good savings and loan repayment behaviour. And how
do they keep track of all of this? Through nifty telecommunications
data, of course.
In response, other banks are launching mobile solutions in
cooperation with Mobile Network Operators, such as KCB
Mobi loan from Kenya Commercial Bank (KCB), Eazzy
Loans from Equity Bank, Y’ello from Nigeria’s Diamond
Bank, MoMo Kash from Bridge Bank in Côte d’Ivoire, and
Pan-African banking leader Ecobank, which offers mobile
“Africa is inventing
the future of banking”
– Alexandre Maymat –
Société Générale
banking in many African countries through an arrangement
with the French telco, Orange. “Thanks to the sharp rise of
mobile financial services, millions of low-income, previously
un-banked Africans are suddenly getting access to affordable
banking products, and they’re starting to appreciate the essence
of acting in the financial market,” says Osoro.
THE FUTURE IS DIGITAL
Off the back of M-Shwari and other digital services, CBA
has rapidly expanded its customer base while launching comparable
mobile banking platforms in Tanzania, Uganda, Rwanda
and Côte d’Ivoire. KCB Group – a banking institution turned
holding company – has attracted more than 10 million new
customers through its mobile banking platforms in the past five
years, with an 84 percent growth in mobile loans and advances.
“Africa is inventing the future of banking,” said Head of
Africa International Retail Banking for Africa, the Mediterranean
Basin & Overseas at Société Générale Alexandre Maymat
by 2022
282
Over half of the 282 mobile money
services operating worldwide are located in
Sub-Saharan Africa
300
The number of people becoming
banked grew by from 170 million in 2012
to 300 million in 2017
450
By 2022, 450 million Africans will be
banked, which will be close to half the
population of Africa
“What if these same weak
spots could reveal the answer
to the problem?”
ANP