Banks directed to slow down on the digital transformation of services

mVISA Ecobank
Image Credit: Bankelele

Commercial banks started digitalising services early this year, a move aimed at eliminating physical bank branches that prompted intervention by Government. Banks including Stanbic,Standard chartered and Barclays have been closing some of their branches in favor of digital platforms.However a call was made by the Financial Sector Deepening Uganda Executive Director, Jacqueline Musiitwa on the launch of the financial inclusion week in Kampala.

“Banking is still based on relationships whether we have digital means or not,Banks that fail to find that balance would be set to lose”. Jacqualine Musiitwa

The digitisation agenda will allow banks to ride on agent banking to maintain their presence with customers.In a recent statement by Standard Chartered boss Albert R Saltson stated that the bank plans to minimise the physical contact between the bank and its customers since digital banking is the future. Over $1.5 billion (approx shs5.4 trillion) has been invested by Standard chartered in technology to be rolled out over the next three years worldwide.

Agent banking takes pride in the use of bank representatives, call them agents to disseminate banking services on behalf of the bank like the way Mobile Money agents act for telcos. You can do all that would require you to visit a physical banking branch from the comfort of a nearest agent point. This in return brings the banking services closer to the people and eliminates overhead costs to the financial institutions while agents earn a commission for the services rendered.

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According to Stanbic Bank CEO Patrick Mweheire Agent banking aims at providing a bridge between banks and customers whereas with digital banking only requires a customer to register with the platform. Furthermore banks intend to aggressively pursue their digitisation agendas and improve operational efficiency where banks plan to ride on agent banking to maintain their presence with customers.

This push into digital banking comes at the wake of Mobile Money services from telecoms that are undercutting traditional banks would be customers and associated benefits. This is reflected in mobile money accounts being more than registered bank accounts.These on last count were over 21 million mobile money accounts against over 4M on the traditional banking, though most users find Mobile Money as a payments solutions service than an actual banking service.

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