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Turning buzzwords into reality

Publishing Date : 05 August, 2019

Author : KEABETSWE PHEKO- MOSHAGANE

Those working in the financial industry in Botswana must hear the words ‘digital’ and ‘innovation’ more than five times a day. These terms have become buzzwords, and are routinely dropped into PowerPoint presentations, meetings, and general business parlance.


There is a reason for this: every bank is now trying to figure out how to turn buzzwords into reality in their business. Yet, many of these efforts have met with only mixed success. Digital innovation is, after all, one of the ways in which all banks seek growth. It’s about being fit for the future and being agile enough to respond to the needs of our customers. It’s also fundamentally about making processes faster and more reliable.


Some say that the banking industry’s quest to become more digital and innovative is a matter of necessity: to catch up with non-traditional players in the fintech space, embracing innovation and a digital focus is imperative. This is not far off – these fintech companies are, increasingly, becoming serious competitors in what was a traditional banking business space.


In Africa, this trend has been fuelled by the accelerating rate of mobile telephony penetration. According to GSM Association figures, sub-Saharan Africa currently has 420 million unique mobile subscribers, with a 43% penetration rate. By 2020, this is expected to reach over half a billion unique subscribers, making Africa the fastest growing mobile market.


Yet, many financial institutions’ approach to digital innovation is about transferring an existing process or service on to a self-service channel of sorts, without redesigning the offering or service. This approach often does not deal with, or improve, the underlying weaknesses in systems and results in channels that customers are not willing to use. Often, improving the user experience, or the simplicity and reliability of the channel is a simple solution that makes a world of difference.


As Absa Group, we aim to double our share of banking revenue across the continent; we firmly believe that a focus on digital offerings will play a key role in achieving this ambition.However, being ‘digitally-led’ does not necessarily refer to building an entirely digital bank. It is about digitising our enterprise, end-to-end, to improve the customer experience. We aim to get closer to the customer, and become more agile in all areas, including decision-making. We are focused on using the digital, technological developments of the 21st century to deliver on our growth.


In fact, we are leading this charge, given several of our industry-leading initiatives in which we realised an increase in the adoption of our digital banking channels. Based on our understanding of our clients and their need for convenience, we launched Dynamic Currency Conversion (DCC), a first to market solution which enables foreign travellers to pay for goods and services at merchant outlets in Botswana with their Visa or MasterCard in their home currency. We also enhanced user security on the Barclays Mobile Banking App with the addition of fingerprint identification on both Android and iOS devices as a way of improving security and the customer experience. The enhancement also provides face recognition on some smartphones’ models.   


These are just a few examples of the innovations we have introduced, and we will continue to deliver product and serviced which are inclusive and will delight our valued customers. Yet, we recognise there are challenges to overcome, one being legacy systems. This is a challenge that all banks will grapple with. These systems tend to have little flexibility and room for innovation, and limited interoperability with other ecosystems.


When we negotiated a separation agreement from Barclays PLC, the terms of that agreement included a £765 million contribution towards us becoming a standalone, proudly African bank. While we cannot disclose actual figures, we can say that a fair portion of that amount will go towards new technology investments, which includes replacing the old with new, fit for future, technology. We recognise that our customers’ needs are changing, and we are investing in digital platforms to offer more convenience.


As we seek to be a banking group Africa can be proud of, we are exploring ways to build world-leading new capabilities – bringing the best thinking, skills, design, and digital capabilities to create a differentiated business. Many institutions fail to innovate successfully simply because of their lack of speed and agility. Digital innovation is about quick and short cycles, as well as constantly improving the customer experience. By the time slow institutions bring something to market or fruition, the market has already moved on, rendering obsolete their proud, but not-up-to-date, innovations.


We recognise these challenges and are actively working towards mitigating them. That is why we are building a Bank that is not only fit for the future, but also for the customer of the future. A Bank that is digitally-led, entrepreneurial, and driven by the needs of the customer.
Keabetswe Pheko- Moshagane is Managing Director, Barclays Bank of Botswana

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