How banks can be more financially inclusive in Africa
The symbiosis between the telecoms and finance industry is stronger than ever in Africa, and as technology evolves, many banks are being left behind.
One bank in the region that is staying ahead of the curve is Zambia National Commercial Bank (Zanaco), which in 2018, was on the cusp of an accelerated digital transformation set for completion in 2020. Sharing the bank's success since then is a Chief Digital Officer who understands the relationship between finance and telecommunications better than most, Wane Ng'ambi.
"I love a challenge!" exclaims Ng'ambi when asked what drew him to his current role. "I'm not a traditional banker. To me, one of the slowest-changing industries has been banking and financial services. With Zanaco, the whole agenda of taking a very mature, traditional industry and moulding it into a very tech-savvy future-focused one is a fantastic opportunity." When Ng'ambi joined Zanaco in 2018, he brought 15 years of experience in the telecommunications industry with him. Specialising in creating telecommunications and digital solutions from an IT engineering perspective, he previously looked after mobile financial services for MTN in Zambia.
"There's a big drive across Africa that is pivoting mobile telecommunication companies from predominantly providing voice and data services to providing financial services by using the existing technology infrastructure," he says. "Mobile money is a big phenomena in regions like Kenya, Tanzania and Uganda. Zambia is the latest country to embark on this journey."
"The heart of Zanaco’s strategy focuses around the use of technology in order to enable customer fulfillment for different products and services," he summarises. Over the years, banking has evolved considerably, but Ng'ambi reflects that telecommunications engineering has always remained embedded in the lives of customers. "This is the move banks need to make. They need to ask themselves: How do we migrate from the traditional branch servicing of customers and into the digital age?" He is cognizant that Africa comprises a largely young population that will pilot a remarkable technological shift in the continent in the next five to 20 years, and it is essential that banks like Zanaco keep the pace in order to remain relevant.
Zambia National Bank has met the challenges of this ever-shifting landscape head-on and has achieved an astonishing 115% growth across digital channels in the last 18 months, with defining weight placed on mobile channels. Other streams that have contributed to this exponential growth include QR Code, which has acted as a replacement channel to the original postal one & cost inhibitive POS channel, and the Express “Agent Banking” Channel.
"We're at almost 110% growth year-on-year, effectively doubling our traffic through our digital channels." This is the result of what Ng'ambi would describe as a very "aggressive" campaign: "Africa has a very interesting dynamic; the financial inclusion rate is relatively low, with the exception of some successful markets like Kenya, Tanzania and Uganda. Zambia sits at around 59% of the total financial inclusion. This inclusion includes regulated and non-regulated channels."
By non-regulated channels, Ng'ambi refers to the phenomena of 'Chilimbas' – village banking – where groups in rural communities invest collectively. This forms up to 20% of the total financial inclusion and often goes missed by banks. "Now, this is not regulated formally in Zambia, so it's unregulated financial inclusion, which is pretty much a conventional-type financial inclusion,” he explains. “But when you look at formal financial inclusion, through regulated entities such as Zanaco, we're somewhere around 38-39%. That's relatively low if you look at the population." This totals to around 6-9mn individuals who are currently excluded from regulated financial services. This makes Zanaco's growth all the more impressive, but it also creates a number of challenges to overcome.
"Things are looking very, very exciting for us in the future. We are continuing to drive toward mobile interoperability." Ng'ambi shares. "We're looking to build a whole ecosystem by adding everyone into one interoperable environment where everyone can play and trade with everyone.”
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