African Banker magazine’s African Digital Banking Transformation Report published earlier this year provides some interesting insights into how the African banking sector is adopting digital.

One key finding: The pace of digital change has been accelerated due to the impact of the COVID-19 pandemic and related restrictions – with around 80% of respondents indicating that they have either been forced to begin digital implementations or have accelerated existing programs to deal with lockdown restrictions that saw large numbers of branches closed for extended periods.

Data key to digital implementation

The digitisation process is completely transforming the African banking sector but big questions remain over the speed of that transformation and the nature of the changes.

The report shows that African banks see technology investments– including cyber security, big data, artificial intelligence and cloud computing – as critical to enabling digital transformation.

A key theme is recognition that the better use of data is critical to digital transformation as, without trusted data, investments in advanced analytics may not deliver the anticipated results. As discussed last week, trusted data comes through transparency provided by intelligence about data backed by enrichment to provide context and deliver integrity.

For African banks, the drive to digital is being driven, primarily, by customer demand and satisfaction. This was also a driver for Norway’s DNB Bank, whose digital journey we profiled back in 2018.

The challenge of digital banking is to stay connected to the customer

For DNB Bank in Norway, the shift to digital was exploited as an opportunity to reinvent themselves as a customer-centric digital bank. Of course, enhanced analytics were important, but the operational challenges of dealing with the large volume of interaction that digital channels create is central to DNB’s data strategy.

DNB invested in data integrity to enable its digital transformation, and to underpin investments in advanced analytics and other platforms. Core to their focus was to ensure an enhanced customer experience. IDC research shows that CX is one of the areas that shows the biggest improvement from a focus on data integrity.

Digital banking also creates opportunities for new entrants – such as digital-only banks, mobile operators and retailers. Again, for those established operators that have long-standing customer relationships, and the data that comes with that, the ability to exploit trusted data to better understand customers, develop new products, and identify new digital opportunities is highly dependent on trusted data.

Four coming trends

Four big technology trends will shape the digital transformation over the next two years: data management, cyber security, greater digital adoption; and the development of omnichannel strategies,
said CEO of Banco de Fomento Angola (BFA), Dr. Luís Gonçalves in the African banking report.

“However, trends and technologies don’t exist in isolation: they build on and reinforce one another, so we consider a better approach is to focus on the strategy, on having a clear vision of the future and selecting the best set of technologies to help us on the way, instead of trying to surf the last tech trend”, he added.

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