Windhoek
“Digital transformation in the modern banking era simply means changing the way banks view and interact with their clients and changing the way their clients view and interact with us. This change will be driven by technology. In fact, this transformation is already taking place,” says Sergio de Sousa, Head: Digital Transformation at FNB Namibia.
According to de Sousa, banking was once focused on attracting customer or investor funds in order to extend loans to other customers at higher rates than what it cost them to attract the funds. Over the years, however, there has been a dramatic growth in banks offering non-conventional banking services such as the ability to make and receive payments using channel mechanisms such as cards, electronic funds transfer and cheques. “This has now become a standard part of the banking experience and in fact is often the primary driver for why people actually open up a bank account in the first place,” adds de Sousa.
The emergence of the internet and mobile phone has also changed the way in which customers interact with their bank. Realising the benefits (both to customers and themselves) of using such technology, banks have been actively encouraging customers to rather interact with them through electronic channels as opposed to coming to a branch. “Banks work very hard at building trust around the use of these new modes of interaction which are paying off in the dramatic rise we see in internet, mobile and ATM transactions. The FNB Holdings Annual Report for instance showed that the highest percentage growth in terms of the number of transactions was found in the eWallet (128 percent), Point of Sale (21 percent) and then cellphone banking (19 percent). This is also supported by the Bank of Namibia Annual Report 2015 which notes an overall 39 percent increase in the number of interbank card transactions in Namibia,” advises de Sousa.
He continued by saying that Namibia, faced other challenges such as the vast areas and thin spread of the population. “This sparse distribution meant a lack of infrastructure and services to many areas, particularly the rural ones, and some basic requirements for setting up branches such as water, electricity and internet are not in place. Due to the absence of these basic services, setting up a branch can be very costly and therefore unsustainable.” De Sousa said, however, that these were not new challenges and the onus was on banks to find new and innovative ways of reaching the Namibian population such as the FNB eWallet which has been a major boost for Namibians in terms of financial inclusion.
“It is a well-accepted prediction that if banks do not change the way they do business they might not be around in the next 10 years. There are a few things to consider on the journey toward digital transformation in the modern banking era such as efficient business process and customer centricity,” says de Sousa. By efficiency I mean ensuring our business processes are as efficient as possible before throwing technology in. This simply means that we have to ensure that our internal business processes are efficient so that we can maximise the potential benefits of new technologies and innovations. So the question we have to ask ourselves is: are our business processes efficient.”
The second consideration de Sousa says is customer centricity. “This means that whatever technology or innovations we utilize has to ultimately benefit the consumer. The 2015 North America Consumer Digital Banking Survey Report by Accenture showed that 86 percent of consumers trust their bank over all other institutions to securely manage their personal data. While Namibia is a very different country compared to North American countries one can safely assume that a similar result may be evident among Namibians. This means that banks have a great opportunity to leverage this trust and use customer data to better personalize customer’s experiences. With technology evolving with concepts of big data, data mining and data analytics which allow an institution to gain personal insight into a customer’s needs, banks can make a greater move from mass marketing towards personalized marketing. The possibilities of using such technology means we can provide customers with the right solutions at the right time at the right price…before they even ask.”
In conclusion de Sousa said that digital transformation is only just beginning. “The way we understand banking, the way branches are set-up, the way products are developed will all look very different in the next five years.”