Experts say banking, as we know it, may become extinct by 2030 as innovative services like mobile money and e-payment solutions continue to see increasing patronage from Africans. Speculators and experts alike believe this innovative trend will gradually replace tradition banking.
African banks have now been urged to embrace technology and tweak their business and operational models in order to remain relevant in the evolving environment characterized by sharp demographic and social changes.
According to the experts, which comprised bankers, financial analysts, risk analysts and financial technologists, the sheer speed of this evolution in customer behaviour, market dynamics and aggressive non-bank competitors such as tech companies and telcos clearly demonstrate the need to move along with the tide since banking as usual would no longer be accepted.
This disclosure was made at the eNNovators Breakfast Series (EBS) 10, organized by Financial Technology Magazine, with the additional recommendation that banks invest heavily in technology, rediscover and assert their roles in society and connect intimately with the millenial generation. Another emerging insight from the summit was the need for Central Banks to move beyond being banking regulators focused on tactical responses and objectives tinted with political expediency.
Themed “2025: The End of Banking as We Know it,” the key message of the summit was clear; banks are facing rapid and irreversible changes of which the current models will no longer be sustainable, going forward.
“The challenges and dilemmas posed by the parallel changes in technology, customers and revolution are not confined to the incumbent banks or even the non-bank pretenders. Banking policy and regulatory community would face its own challenges and struggle for relevance,” said Emmanuel Agha, CEO of e-payment company Innovectives, and presenter of the lead paper at the summit.
In a recent report The future shape of banking – Time for reformation of banking institutions, PwC identified five global megatrends whose impacts, intersections and collisions are re-shaping the business, and indeed, banking world, they include; demographic and social change, shifts in global economic power, rapid urbanization, climate change and resource scarcity, and technological breakthroughs. The top drivers, just as posited by the summit, are the first and last megatrend, and while responding immediately to these, African banks and policy makers alike must not lose sight of the others.
Beyond banking, however, these trends are responsible for disruptions in practically every other sector to such an extent that it would be foolhardy to not expect changes in the banking sector. The PwC report cites examples including how cameras are an absolute necessity in today’s phones whereas this was not the case a decade ago, this single trend has disrupted everything on the value chain from cameras to photo processing.
So, this is, in fact, a wakeup call for every business in every sector that aims to still be relevant in the next decade; and the message remains clear and is, not surprisingly, consistent with one of management guru Jack Welch’s favourite: Innovate or Die! (VENTURES AFRICA)
