Financial institutions are
striving to adopt omnichannel capabilities post-pandemic as part of
their digital strategy plans, a new report has stated.
Omnichannel
banking entails making the same set of services available to customers
across all the channels, both digital and offline.
Therefore,
clients can perform the same banking operations, whether they use a
website, a mobile app, a call centre, a brick-and-mortar branch, or any
other available channels.
The technology builds on Big
Data allowing clients to transact or shop with the bank through multiple
channels including desktop or mobile device, telephone or in a
brick-and-mortar store.
A survey conducted by NETinfo,
an innovative technology company, has shown that about 93 percent of the
institutions plan to adopt the omnichannel technologies after their
experience with coronavirus crisis.
“Omnichannel makes
sense on so many levels and it is true to say that financial
institutions that do not embrace this motion will be left behind.
Digital onboarding is joint second and this technology has shown just
how important it is to obtain new customers without having them visit a
branch,” the report stated.
“Open banking is the other second-place technology and further proves how forward-thinking African banks are.”
The banking industry and customers’ interaction with financial
organizations have been shaken to the core as a result of Covid-19.
The
pandemic has made people visit bank branches less frequently and hence
shift on apps, reducing traffic, especially in April and May.
But
even as Kenya lead in the use of mobile phone technology at 91 percent
penetration and in turn resulting in mobile banking spike, there is
still a huge gap between tier-one banks and other financial
institutions.
Globally, Kenya is also placed with the highest share of internet usage with mobile phones compared to desktops.
OPEN BANKING
NETinfo
business development manager Thomas Yieke said in the past two months,
their absence in the digital space had affected most of these financial
institutions.
“However, most tier-one institutions and
banks have adopted the online and open banking and therefore have been
advantaged because they were able to offer same banking services to
their customers,” he says.
The Cyprus-based company is
already reporting an influx of interest in online banking and the need
for transfer of services to digital platforms by governmental agencies.
The
survey on embracing change and banks’ digital transformation released
early in June has shown that only 54 percent of financial institutions
in Africa had been able to adopt the omnichannel solution in the past,
providing 360 degrees customer visibility.
About 46 percent were still using silos, with separate systems for internet banking and mobile banking.
“This
shows us that from our participant banks while many have embraced the
omnichannel motion there are still those running silos.
“We
believe omnichannel will become a necessity going forward and it seems
some African banks must re-think their current silo approach,” the
report stated.
The poll has shown that most banks have
set out different digital channels as part of their omnichannel strategy
plans following their recent experience with the coronavirus crisis.
Mobile banking channel app forms the largest channel out in the plans at 92 percent.
Internet and open banking (open APIs) followed at 77 percent and 69 percent respectively.
About
the other 54 percent, 38 percent, 23 percent and 15 percent of the
institutions plan to add automated teller machines (ATMs), agency
banking, kiosk and wearables technology channels respectively.
The
pandemic has also seen most employees’ engagements, training and
information sharing conducted through virtual meetings on apps like
Zoom, GoToWebinar and Google Hangouts, among others.
As a result, about 54 percent of the institutions in the poll set to include chat or video conferencing in their plans.
“As expected, financial institutions in Africa are planning to embrace the full set of digital channels going forward.
“In
a world where the mobile phone is king it is not surprising that most
banks plan to have mobile as part of their strategy going forward with
Internet banking a close second,” the report stated.
“Forward-thinking
banks in Africa are also trying to replicate the success of open
banking in other parts of the world and see the motion as an opportunity
to be grasped early, without the need for legislation to impose this.”
Evidently,
over the past few years, banking consumers have already become
accustomed to the changes that have been put in place by some of
transforming banks.
COST REDUCTION
Equity
Group’s investor briefing for the financial year ended December 2019,
for instance, shows 97 percent of all transactions happen outside the
branch while 93 percent of all loan transactions are via the mobile
channel.
The bank’s business model has continued to
leverage on cost reduction measures principally through the use of
mobile, Internet, agency and merchant banking infrastructure.
On the other hand, KCB Group reported 97 percent digital transactions up from 88 percent registered in 2018.
The
bank that recently acquired National Bank of Kenya, a former tier-two
lender, said it is revamping the subsidiary’s digital banking
proposition in line with the lender’s strategic objective of becoming a
digital leader.
“This is aimed at delivering
competitive financial solutions as well as meeting the changing needs of
customers who are increasingly using the digital platform,” reads KCB
Group’s 2019 financial statement.
“In this regard, a renewed focus is being laid on mobile banking, Internet banking, and agency banking channels.
“This
is in addition to optimising the branch network bolstered by the
opening of four new branches post-acquisition, as guided by an ongoing
mapping and audit exercise.”
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