ZIMBABWE INDEPENDENT BANKS AND BANK SURVEY 2020 MAGAZINE

Reimagining Banking Beyond Survival.
Banks also
need to show
commitment
in service
delivery in order
to enhance
customer
confidence
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maturities of Treasury and RBZ bills and thus
exacerbated the negative real interest rates being
earned.
Prior dollarisation
Initially, dollarisation had severe negative effects
on banking business. Due to the low confi dence
in the banking sector, the public kept their foreign
currency transactions outside the formal banking
system.
This led to a sharp decline of bank revenues
as the banks’ traditional sources of income such
as interest income, Treasury Bills and government
bonds, as well as sources of funding or liquidity
including inter-bank funding, RBZ liquidity support,
customers’ deposits and the use of Treasury Bills as
trading assets, were no longer available.
Confidence creation
There is a need for the banking authorities to
come up with policies and structures that can help
boost transparency of the banking system. If the
banking authorities are able to enhance banking
structures thereby making them more transparent,
confi dence can be restored by a substantial margin.
One of the major challenges that have always
existed is the principle agent problem. As long
customers are not convinced of banking system
commitment in serving their emotional needs,
trust will remain a pie in the sky.
The kind of relationship that exists between
banks and customers is vague in that one leaves
their deposits in the custody of another in
exchange for a document or certifi cate.
Trust is what holds the relationship. It is
therefore necessary for the banking sector to
enhance that relationship by showing enhanced
commitment.
There is also a need for regulators to come
up with policies that discourage unscrupulous
banking practices and develop deterrent punitive
measures.
Economic headwinds are major fundamentals
that diminish banking confi dence and pragmatic
commitment on these structures is crucial.
Individual expectations about the general
economic conditions and other economic
indicators are likely to improve if there is realisation
that authorities are seriously taking measures to
improve economic conditions.
Good expectations lead to good confidence
Banks have to make deliberate efforts to make
their structures transparent and gain committed
customers. For example, banks may explain
how charges are accumulated thereby creating
knowledge of reasons thereof. If customers
understand banking processes and challenges,
confi dence can be gained easily.
Banks also need to show commitment in
service delivery in order to enhance customer
confi dence.
Poor service delivery may mean the bank is
struggling to speak to the less informed customers
who usually constitute the majority.
Management should ensure that service
delivery is in line with the overall strategy of the
bank that seeks to improve the image of the
organisation.
Rukarwa is a Research and Investments Analyst at
FBC Securities. Email: Enock.rukarwa@fbc.co.zw/
website www.fbc.co.zw Mobile: 26377719053
16 BANKS& BANKING SURVEY 2020
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