The Covid-19 pandemic has upended the social and economic systems, and many sectors have experienced major operational and tactical shifts.
The pandemic has accelerated digital integration in many sectors; financial services and banking haven’t been left behind, with clients demanding to see a level of technological integration that allows them to continue accessing their money uninterrupted.
This shift is likely to drive expectations going forward. The change, though rapid, has been easier on agile organisations that had already incorporated technology in their processes, allowing them to quickly scale up to meet clients’ demand for tech-led solutions.
Conversely, institutions that were slow adopters of technology have had to accelerate their digitisation processes.
In the banking sector, for example, the traditional legacy banking model status quo has been challenged by consumer bias towards digital solutions coupled with the safety measures imposed by the government.
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This has led to an increase in clients transacting digitally as opposed to visiting their branches.
Feeding into this digital shift is the upsurge of fintechs (financial technologies) in the Kenyan market on the back of increased adoption of mobile money services.
The fintech revolution in the country has challenged and transformed the banking ecosystem, allowing for greater innovation in payments, credit and savings products.
Further grounded by an enabling environment, fintechs have found a fertile environment for growth, supported by a growing digitally savvy and financially literate middle class.
It is clear that fintechs will play a significant role in advancing economic growth and enhancing financial inclusion in the region.
Many arguments have been made regarding the role of fintechs and banks as to whether they are competing or collaborating. At Standard Chartered we believe collaboration is the only way to go.
Depleted human touch
SC Ventures - an innovation hub that serves as a platform to collaborate with fintechs in Kenya and the broader African region, has helped us develop new business models and services that meet the needs of our current and future clients.
By allowing fintech to undertake a proof of concept (POC) in a controlled environment, we can be able to test ideas before launching to the wider consumers.
More importantly, the platform has allowed us to learn more about innovation.
It is clear that tech innovation in the financial sector has numerous advantages, but we also need to be cognizant of the challenges it poses.
Tech provides transactional ease but also carries the risk of depleting the human touch and increased cyberattacks.
To mitigate this, we in the financial sector need to utilise technology to optimise customer engagement and satisfaction.
We should also use the most up-to-date security technologies to protect client and users of digital services for it is only when clients and customers are confident of the security of their funds or access will they continue adopting technology for everyday use.
By leveraging technology to gather data and derive insights, banks are better placed to provide a customised experience that caters to specific client’s need.
When clients feel that we understand them, they are less likely to demand human interaction all the time, but only for the most complex of financial matters.
Covid-19 brought about an unprecedented crisis and shook up most business continuity plans. Banks that will thrive will be those that will set up new systems and structures that are consumer-led.
Local banks have the capacity and resources to build innovative and sustainable economies; we have to adapt and disrupt.
- The writer is the Chief Executive, Standard Chartered Bank