Banks must digitize and rethink their modes of operation, says a report by Deloitte on East Africa Banking Industry Trends 2021/2022, themed ‘Fortifying Resilience’.
Prior to COVID-19, the financial services industry was evolving at a steady pace, driven mainly by changing consumer expectations, heightened competition, evolving regulations, and advancements in technology.
Within a short time, this report says COVID-19 has forced radical changes in customer behaviour, moving significant portions of the economy online and increasing customers’ willingness to engage digitally.
Banks have faced significant headwinds in recent past
Deloitte East Africa Financial Institutions Services Team (FIST) Leader Charles Luo said the global and regional banking Industry has faced momentous headwinds over the recent past.
Banking business leaders have had to navigate their institutions through substantial financial, operational, and talent challenges as a result of a once in a lifetime pandemic.
Regionally, this has necessitated accelerated digitization in an industry that is almost always undergoing digital transformation.
“Our report highlights in greater detail the major trends our regional and global banking specialists consider to be key in ensuring banks strengthen their financial and operational resilience and thrive going forward in a still highly unpredictable environment,” said Luo.
The report dives into the key banking industry’s trends, which include accelerating digital transformation, strengthening operational resilience, recovering credit loss, mitigating the rise of cyber-crimes, adapting to the evolving regulatory environment, and the emergence of inorganic growth.
It has used available historical data to assess the banking industry performance in Kenya, Uganda, and Tanzania, and to give insights on how bankers can change the trajectory going forward.
Timothy Machira, Deloitte East Africa FIST Senior Manager said that in a constantly evolving environment, banking institutions that take advantage of the opportunities that arise from such change and plan for any attendant financial and operational challenges will most likely thrive and outperform their peers.
“Banks’ strategic focus should be on taking advantage of these opportunities and having in place, measures to mitigate adverse consequences of the anticipated challenges. We hope that the key trends highlighted in our report will provide insights to Banks’ decision makers in these areas,” said Machira.