The banking market in Africa is growing significantly, with consumers eager to adopt alternative technologies. Jaydeep Gupta, regional head of retail banking for Africa and the Middle East at Standard Chartered Bank, shares his thoughts on how digitisation is leading the way in the continent. Briony Richter reports
The African banking market is unique and filled with potential. By combining digital solutions and alternative technologies, banks can create a powerful user experience that meets everchanging customer demands.
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By GlobalDataDigital banking is transforming bricks-andmortar banks into more modern and efficient places in which to operate. There are also a plethora of ways in which people can choose how to bank.
Use of data enables Standard Chartered and other banks to gain more knowledge about their customer base and how to improve on products and services they offer. Standard Chartered has a long history in Africa, opening its first branch there more than 150 years ago. It is continually investing across the continent, and in recent years has been accelerating its digital banking strategy.
Standard Chartered has already successfully launched its first retail digital bank in Côte d’Ivoire. The fully end-to-end digital bank only had one branch to test out the model and services provided. Bringing digital to Africa, it allowed customers to access all the usual banking activities from their mobile device
. Furthermore, customers for the first time could open an account through their phones in under 15 minutes. Digitising Africa remains a key priority for the bank, and Standard Chartered is now moving forward quickly with the second phase of its digital banking roll-out, with plans to launch in Uganda, Tanzania, Ghana and Kenya.
Speaking to RBI, Standard Chartered’s regional head of retail banking for Africa and the Middle East, Jaydeep Gupta, says consumers are keen for digital banking options.
“In my opinion, customers in today’s market want two things: convenience and error-free operation,” he says.
“Consumers expect flawless banking services at the click of a button; in turn, they also want the experience to be seamless. This is why, at Standard Chartered, we are responding to the needs of our customers.” He continues: “In 2018, we launched the first digital bank of its kind in Cote d’Ivoire that only relies on digital transaction. This transformed our digital banking capabilities, and we now offer customers access to over 70 self-service requests, making banking accessible, hassle-free and convenient.
“The launch also allowed us to learn more about our customers’ needs. Therefore, we have become more agile when listening to our customers’ feedback to continue strengthening our products and services.”
The African market
According to Standard Chartered, Africa is the second-fastest-growing market for banking, and the second most profitable on a global basis.
The retail banking sector in Africa is innovative and – given the lack of banking penetration and heavy reliance on cash – surprisingly eager for alternative banking methods.
The African banking landscape is evolving rapidly, and this is indicative of how digital banking is becoming more mainstream.
The way consumers bank and connect with their providers is becoming more digitally interactive, and this offers Standard Chartered a chance to transform the overall experience. The capabilities of its new banks aim to mirror Standard Chartered’s success in Côte d’Ivoire.
“Our clients will be able to open an account in less than 15 minutes, and then use an app on their mobile devices to carry out all their banking activities,” Gupta notes.
“A client can open a new account entirely through our SC Mobile app any time, anywhere – from the comfort of their own home or while on the road – thanks to the accessibility and ease of our solution.”
He continues: “Additionally, in response to growing consumer demand for innovative banking services on the continent, our updated digital bank provides enhanced services including QR code and P2P payments, loan and overdraft facilities, and instant fixed deposits.
“In some of our key markets, we are also enabling access to general insurance products through the mobile application. Clients will be able to enjoy the convenience of banking on the go, any time and anywhere, along with a consistent online experience.”
Despite the strong emphasis on digital, Gupta highlights that there remains a need for human interaction. As customers become more digitally connected, banks must balance the digital channels with a human touch in order to meet all customer needs.
Digital capabilities can, however, support developing countries that are looking to raise levels of financial inclusion, and increase consumer access to a greater number of financial services, such as credit.
Gupta points to a recent report by Boston Consulting Group that states that the majority of customers find consistency to be the most important factor in banking, regardless of the channel used.
“Interestingly enough, nearly half of those surveyed reported that they preferred a hybrid banking experience where digital capabilities can be complemented with in-person advice when required,” he notes.
Tackling reliance on cash
While it is true that Africa has been swift to advance into the world of financial digital technology, it is hardly a secret that cash remains king.
Digital banking technology will, however, continue to have a massive impact on Africa’s reliance on cash, which is one of the biggest hurdles that Standard Chartered has come across while expanding across the continent.
“Although competition is heightening and regulation is tightening, there is still much room to grow. In fact, according to a recent report by management consulting firm McKinsey and Company, Africa’s retail banking revenue pool is expected to grow 8.5% per annum between 2017 and 2022, up from $35bn to $53bn,” Gupta states. “Of course, the market is facing slight growth pains as well. For example, the banking sector has low income levels in many countries, widespread use of cash in most economies, and poor coverage of credit bureaux.
“However, some banks are already tapping the opportunities inherent in these challenges. They are harnessing Africa’s widespread mobile phone coverage to create low-price offerings and innovative distribution models. Driven by such innovation, African retail banking’s revenue growth could accelerate significantly in the next five years.”
Cashless ways to pay are growing in popularity, and Standard Chartered is fully committed to boosting the adoption of digital technology.
Gupta explains that the number of Africans with bank accounts grew rapidly from 170 million in 2012 to nearly 300 million in 2017; according to McKinsey, the figure is expected to rise to 450 million in the next five years. Gupta adds that 40% of African banking customers opt for digital channels to conduct transactions.
“Additionally, digital remittances can reduce the costs associated with the transfer of money using traditional channels, in addition to adding increased security, which a large proportion of users are starting to realise.”
Evolving needs
The growing trend directly correlates with customers’ evolving needs. Mobile banking across Africa is increasing as customers demand more convenient and cost-efficient ways to pay.
It is also an important tool in the battle against financial exclusion through financial education, with many consumers across the continent unaware of the opportunities available to them.
Standard Chartered aims to be the digital bank with a human touch. As well as launches in the four planned markets, the bank will also run a marketing campaign, titled //BEUNSTOPPABLE, Bank on the go!, using traditional and social media platforms to encourage customers to choose the banking methods that best suit their needs.
Outlining how it will continue to boost acceptance of digital banking, Gupta concludes:
“Digitising Africa continues to be an integral component of our strategic transformation, and we have been steadily expanding our footprint across the Sub- Saharan continent over the years.
“Many customers that are used to traditional banking services may be apprehensive towards using new technology, especially when their hard-earned money is involved. However, adding a digital element intertwined with a human touch provides our customers with the perfect combination for a user-friendly, trustworthy and convenient experience for the customer.”
