By Kariuki Ngari, CEO & Managing Director, Standard Chartered, Kenya & East Africa
COVID-19 has upended the social and economic systems and many sectors have experienced major operational and tactical shifts. The pandemic has accelerated digital integration in many sectors; Financial Services and Banking wasn’t left behind with clients demanding to see a level of technological integration that will allow them to continue operating by accessing their accounts uninterrupted. This shift is likely to drive expectations going forward. The change, though rapid, has been easier on agile Organisations that had already incorporated technology in their processes; allowing them to quickly scale up to meet client demand for tech led solutions.Conversely, institutions that were slow adopters of technology have had their digitization process accelerated in the past year. In the banking sector for example, the traditional legacy banking model status quo has been challenged by consumer bias towards digital solutions coupled with the safety measures imposed by the government. This has led to an increase in clients transacting digitally as opposed to transactions in traditional platforms like the branch.
Feeding into this digital shift, is the upsurge of Fintechs in the Kenyan market, on the back of increased adoption of mobile money services. The Fintech revolution in the country has challenged and transformed the banking ecosystem allowing for greater innovation in payments, credit and savings products. Further grounded by an enabling environment, Fintechs have found a fertile environment for growth, supported by a growing digitally savvy and financially literate middleclass. It is clear that Fintechs will play a significant role in advancing economic growth and enhancing financial inclusion in the region.
Many arguments have been made regarding the role of Fintechs and Banks; whether they are competing or collaborating. At Standard Chartered we believe collaboration is the only way to go. SC Ventures – an innovation hub that serves as a platform to collaborate with Fintechs in Kenya and the broader African region, has helped us develop new business models and services that meet the needs of our current and future clients. By allowing FinTech’s to undertake a Proof of concept( POC) in a controlled environment, we can be able to test ideas before launching to the wider consumers – This platform has allowed the Fintechs with good ideas to compete and have a platform to test them and also importantly for the Bank to learn more about innovation.
It is clear that tech innovation in the Financial Sector has numerous advantages; we also need to be cognizant of the challenges it poses. Tech provides transactional ease but also carries the risk of depleting the human touch and increased cyber in-security. To mitigate this, we in the Financial Sector need to utilize technology to optimize customer engagement and satisfaction. We should also use the most up to date security technologies to protect client and users of digital services for it is only when clients and customers are confident on the security of their funds or access will they continue adopting technology for everyday use.
By leveraging tech to gather data and derive insights, banks are better placed to provide a customized experience that caters to specific client’s need. When clients feel that we understand them, they are less likely to demand a human interaction all the time but only for the most complex of financial matters.
As Financial institutions build agile systems for digital innovation, transitioning into new ways of working will be an integral part of the digital transformation journey. COVID-19 has seen most banks transition their employees to remote working – a move that has unearthed the need for effective collaboration tools, improved network capacity and strong security solutions.
A critical part of this being data security. In the age of big data, brand trust is hedged upon high data privacy and security. With large amounts of client data, Financial Institutions must invest in the right infrastructure to protect the organization’s assets. With internet fraud on the rise, strict monitoring systems are a non-negotiable. This will have to be complemented with absorption of the right talent and implementation of strict security protocols to ensure ongoing cyber security.
As economies gradually open up, it is expected that the number of transactions will increase, albeit slowly. More than ever there will be increased demand for convenient and efficient banking solutions. To meet this demand, organizations that invest in digital technologies will be better positioned for growth.
Further, innovation will be central to growth and strategic collaborations and partnerships in the sector will help advance an integrated digital banking ecosystem.
At Standard Chartered, we’ve seen an increased appetite for banks with diversified and integrated networks backed by efficient digital platforms. Since 2018, the Bank has heavily invested digital solutions a cross Retail, Commercial and Corporate Banking. Our award winning fully digital retail bank, now operational in 9 countries across the Africa continent, allow our clients to open an account, transact, invest and protect their wealth. With over 70 services available on the platform, our clients are also able to buy insurance, trade in government bonds and invest in some of the most competitive mutual funds across the globe. By continuously incorporating client feedback in product development and aligning with different partners to solve for client needs, we have seen a huge uptake and utilization of our digital platforms, a clear indication that integration is fundamental for consumers across the continent.
COVID-19 brought about an unprecedented crisis and shook up most business continuity plans. Banks that will thrive will be those that will set up new systems and structures that are consumer led. Local banks have the capacity and resources to build innovative and sustainable economies- all we have to do is adapt and disrupt.