African Banker magazine and Backbase, the leading Engagement Banking Platform, have partnered to produce the 2nd edition of a report on African Digital Banking.
African Banker’s editorial team surveyed more than 100 banks through interviews, asking how they rank digitization among their main priorities, their expenditure on digital development, the impact of Covid, their digital offerings for SME customers and their preferences within the digital space.
The magazine’s editorial team surveyed more than 100 banks.
African Banker Magazine Survey Key Findings
A massive 49% of African banks said that they had significantly increased the speed of implementation because of the pandemic.
The survey shows that banks were already attempting to shift from the traditional model before the pandemic, a trend informed by competition from fintechs and digital players.
Almost 81% of respondents described themselves as being open to change.
There is now an overwhelming consensus over how crucial digital transformation is to the future of African banking.
About 60% described it as the single most crucial factor, and another 34% stated it was among their top three priorities.
Since the last survey, there has also been an increase in the size of budgets allocated by banks to digital development.
A total of 39% of respondent banks now ringfence at least $3m per year for digital transformation and innovation.
Another challenge highlighted in this report is the lack of inclusion of African small and medium enterprises in the new digital platforms and the banking system in general.
Indeed, SMEs are often afraid of banks’ enormous fees for digital services. On the other hand, banks have missed the opportunity as The new fintechs lure SMEs.
Fortunately, some lenders have adopted strategies to address these issues, and their efforts could inspire the industry.
The survey also found that banks lack a skilled workforce, with 465 of those interviewed regarding this as the biggest threat.