Digitalisation key to strengthening banking sector post-pandemic

Digitalisation key to strengthening banking sector post-pandemic

Mobile banking has been one of the great success stories in emerging markets - particularly within Africa - and in the wake of Covid-19, many in the financial sector are calling for further digitalisation to ensure resilience and growth.

This viewpoint was espoused by many at Huawei’s recent Sub-Saharan Africa Financial Services Industry Online Summit 2020, which was attended by delegates from the financial, telecoms and ICT sectors.

“ICT advances will be critical enablers to a thriving banking sector in Sub Saharan Africa”, said Liao Yong, vice president of Huawei Southern Africa Region. He noted that in a region where almost 70% of the population does not have access to a bank account, the development of the financial and ICT sectors is intertwined.

The past two decades have seen rapid uptake of mobile technologies in Sub-Saharan Africa, fuelling strong economic growth. GSMA forecasts anticipate 4G adoption surpassing 2G by 2023, with 600 million unique subscribers in the region by 2025.

Brett King of New York-based mobile banking startup Bank 4.0 noted that the behavioural changes necessitated as a response to Covid-19 would accelerate a shift towards digital financial services, saying: “the declining use of physical branches is likely for many customers to remain a permanent feature of their lives.”

While many sectors saw a decline throughout Q1 in China, the financial sector recorded 6% year-on-year growth. Chen Kunte, Chief Digital Transformation Officer of Global Financial Services in Huawei’s Enterprise Business Group, claimed that this would strengthen the banking sector during the current pandemic.

Chen, who was formerly the Chief Information Officer of China Merchants Bank, said: “We need to restructure banks’ ICT platforms from legacy architecture to cloud-based, open architecture by building AI-Powered and Data-Driven platforms to expand the way financial institutions engage and interact with their customers, and accommodate more innovative business models and service scenarios.”

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