Digital Banking Services Are Changing Africa

The digital revolution is transforming the banking industry. Every bank is eager to evolve, using secure and compliant technology to fundamentally reimagine its business. This is true innovation: changing customer expectations, meeting complex regulations, dealing with new competitors, combating cyber threats, and inspiring a productive workforce.

Maintaining a competitive advantage and differentiation entails understanding customer needs and adapting to market trends while reaching the underserved and unbanked. Every financial services organisation’s goal is to create loyal fans, not just customers, by providing true value through personalised experiences.

Financial service organisations must focus on driving and empowering digital transformation across their organisations end-to-end with a holistic perspective, embracing tech intensity rather than focusing on specific digital products and tools.

A number of key trends are driving the evolution of the financial services sector. The growing power of FinTechs and big tech, as well as changing customer experience expectations, are two important trends, while increased regulation is limiting growth and adding costs. Legacy systems are impeding innovation and transformation, while the growing threat of cybercrime is a challenge the industry must face head-on.

Customers are utilising digital engagement channels more than ever before, and as a result, financial services organisations are attempting to deliver differentiated customer experiences. The increased adoption of digital banking products during the pandemic has prompted banks to accelerate their digital transformation agendas.

FinTechs have taken an agile approach to digitalisation, which is now influencing how enterprise organisations approach digitalisation. Many financial institutions want to grow responsibly and deepen their customer relationships by providing differentiated customer experiences. When it comes to investing in digital experiences for offerings such as lending, digital-forward banks are setting the standard. Transforming the financial services landscape will help drive economic prosperity across the continent and make financial services more accessible to the underbanked and previously unbanked.

The pandemic has accelerated digital adoption, addressing immediate needs while balancing long-term goals. Because of their ability to accelerate deployment, reduce complexity, and manage upfront investment, financial services organisations have chosen cloud services to drive digital transformation. Without a doubt, the ability to accelerate innovation in order to reduce costs is critical to success.

As part of the need to differentiate new experiences, risk management, and compliance, the financial services industry is shifting toward open and interconnected ecosystems via modernisation of core platforms such as payments and core banking systems. Banking and payments are becoming more open than ever, with customers benefiting from a plethora of new and useful products.

Banking as a Service (BaaS) enables this by providing an ecosystem in which licensed financial institutions integrate their banking services directly into the products of non-bank businesses. Connected BaaS allows you to manage an ecosystem of partners, including recruitment, licensing, partnering, and referrals.

Security, compliance, and governance are fully enabled, integrated, and automated across the entire services platform when built in the cloud. BaaS removes many of the barriers that businesses previously faced when attempting to launch or integrate financial products, thereby enabling banking to flourish.

The foundation for running financial services in the cloud is a trusted platform, and organisations that continuously develop to stay at the forefront of technology will become the digital leaders of the future and maintain their competitiveness.

The industry is facing unprecedented levels of regulatory scrutiny. Financial institutions that best manage their regulatory and compliance data will be on the path to better risk management and operational efficiency. And, while financial institutions want new innovations to provide better value to customers, they will not make the cut unless they operate within appropriate compliance frameworks.

To create a safer world enabled by digital transformation, Microsoft adheres to the industry’s strictest security and privacy standards, allowing the financial sector to manage its data footprint and create its own governance. Microsoft’s cybersecurity strategy makes extensive use of machine learning and data analytics to detect and respond to anomalous behaviour both inside and outside the organisation.

To enable a modern banking ecosystem with a focus on reducing end-to-end and capital expenditure while leveraging technology, financial institutions require a mature provider of financial service platforms. These institutions benefit from having a partner who can provide industry advice, digital advice, and will work with them to transition from a legacy traditional financial services organization to a digitally focused one.

Microsoft’s commitment is to ensure that every organisation has the digital capability needed to succeed in the future, and we are committed to assisting our financial services customers in improving time to value, lowering costs, increasing agility, and accelerating innovation for long-term growth.

Phyllis Migwi is the Country Manager, Microsoft Kenya