Retail banking consumer trends in Sub-Saharan Africa

The retail industry in Sub-Saharan Africa is currently facing a myriad of challenges, including weakened consumer demand, high inflation rates, and power outages that disrupt operations and impose significant costs on businesses. However, amidst these challenges, there are also key trends and opportunities emerging in the sector. Philani Potwana, CEO of Retail at FNB Broader Africa, recently sat down with CNBC Africa to discuss the retail trends in the Sub-Saharan Africa region. One of the key trends highlighted by Potwana is the high number of unbanked and underbanked individuals in Africa. A significant portion of the population still lacks access to basic banking services, presenting an opportunity for retail businesses to create value propositions that resonate with these individuals. Potwana emphasized the importance of being a trusted financial partner to clients, their families, and side hustles, and the need to include the unbanked population in the broader financial system. Another critical trend in the retail sector is the challenge of consumer financial health. Many consumers struggle to make ends meet, lack savings for emergencies, and do not adequately plan for retirement. To address these issues, Potwana shared that FNB is implementing initiatives around financial literacy and integrated advice to help clients manage cash flow, reduce debt, and build savings and investments. By responding to these challenges, the bank aims to support its clients in achieving financial stability. Despite the economic pressures facing the retail industry, Potwana believes that there is room for growth and opportunity in the sector. He emphasized the importance of banks moving away from a product-centric approach towards offering integrated financial solutions that meet customer needs. By understanding the financial literacy challenges that many consumers face, banks can better educate their clients and help them make informed financial decisions. Artificial intelligence (AI) is also a key focus area for FNB, with the bank leveraging AI to enhance customer service, data analysis, and operational efficiency. Potwana highlighted the potential economic impact of AI and the bank's efforts to incorporate AI technology into its services to improve customer experiences and streamline operations. Looking ahead, Potwana expressed optimism about the growth prospects for the retail banking sector in Sub-Saharan Africa. Despite the challenges, he mentioned that FNB is bullish about the growth potential in markets like Mozambique, Ghana, and Zambia. By engaging with clients on the ground and tailoring solutions to their specific needs, the bank aims to drive growth and create value for its customers across the region. In conclusion, while the retail industry in Sub-Saharan Africa faces significant challenges, there are also opportunities for innovation and growth. By addressing the unbanked population, supporting consumer financial health, and embracing technologies like AI, retail banks can position themselves for success in a rapidly evolving market.