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Yaza Kara on digital banking’s opportunity to shape the future

By Yaza Kara, Stanbic Bank Zambia Head Digital Transformation and Innovation

The introduction of digital technology led to rapid changes within several industries, from banking and finance to retail. However, with a new player in town – one that which we can’t see – threatening our way of life, the up-take of digital technology is sky-rocketing like we have ever seen it before.

Unlike any time in the past, the ability for consumers and service providers to conduct most banking activities digitally is not just about innovation and efficiency but may be a matter of life and death.

COVID-19 has brought closures, cancellations, travel bans and restrictions. While staying at home is necessary to curb the outbreak in the immediate term, stepping away from business tasks and goals is not an option.

As the virus continues to spread, government may impose stricter quarantine restrictions in a bid to contain the virus. The fear and anxiety brought on by the rapid spread of COVID-19 is resulting in a change in overall consumer behaviour. Social distancing and the awareness of disease vulnerability could change the way consumers who previously visited branches regularly conduct business, forever.

As the impact from the virus intensifies, banks and other financial service providers need to be able to provide all banking services without the usual need for branches. Despite all this, the need for banking services will not cease. In fact, there will be an increased demand for credit availability, new savings and investment accounts, new or replacement of debit and credit cards, as well as general financial advice.

Trends on the ground

The new quarantine restrictions have seen restaurants, hotels and bars closed down, in the case of restaurants those that are still running have switched to take-away and food delivery services. All this has led to a sharp increase in demand for digital banking services. According to estimates by Statistica, the global digital payments market will jump to a record $4.7 trillion transaction value this year, with a 15.3 percent year-on-year growth rate.

In March, the Bank of Zambia called on all Zambians to embrace cashless transactions. The move comes as governments worldwide encourage social distancing and heighten awareness of the risk of infection from touching objects. There are concerns that COVID-9 could be spread by paper money and coins, for example. This has further pushed banks to scale-up their online digital payment platforms.

However, the onus of this digital payment adoption depends on consumers’ willingness to embrace this new way of transacting. It also depends on the reliability of the digital services provided and the consistent delivery of instant gratification that consumers expect.

Customers at the centre of digital banking adoption

Financial institutions that have built seamless digital products and services, are seeing the benefits of their foresight, as customers recognise the advantages of digital options and adapt to new ways of banking.

Stanbic Bank recognised the future a while time ago, and integrated digital literacy and awareness campaigns in its digital banking services, knowing this had the potential to transform banking. Digital transactability was positioned, ensuring that our customers could transact electronically and securely.

In the last three years, Stanbic has invested over K600 million in digital platforms as a way of contributing to the country’s cashless economy. With our digital capabilities, we provide clients with instant remote account opening. We have also launched an ‘Online Top up’ system that allows our clients to get a loan top up via their online banking platform. We continue to provide consistently efficient service through our  digital channels such as Internet Banking, the Standard Bank App, Mobile Banking, Business Online, Enterprise Online and ATMs.

Meeting expectations

At a time of this health and economic crisis, consumers are looking for options to stay safe. Most financial institutions have done little on consumer education around the benefits and process of remote deposit, digital account opening and online bill payments. That time may have come now; it is imperative for banks and other players in the market to reach out to customers and educate them on digital services of offer and how to use them.

If clients cannot perform simple transactions from their homes during this time, their banks are likely to lose market share. Financial service providers should implement their services with this in mind; reduce the need for physical banking, improve consumer education and increase security and fraud prevention.

It is worth noting that digitisation in many industries has been their making – or at least the key to their survival – over the years, but now more than ever, digital consumption and fulfilment must rise to the occasion during this pandemic. COVID-19 should be a catalyst for change and digital innovation that propels the banking system to be ready to face challenges now and into the future.

Challenge or opportunity?

With great power comes great responsibility. With great trouble comes great opportunity.
In the case of the COVID-19 outbreak, new digital products and services are needed to work around its challenges and stabilise the banking sector and other industries that serve as the main supporting pillars of our economy. It’s a joint effort, where every initiative is welcomed and every new idea can become a game-changer.

Source: Langmead & Baker