Kigali - Digitisation is causing a revolution in banking in more ways than one: it is ushering in big changes as well as forcing the institutions to go full circle to old-fashioned values like trust, a senior South African banker said on Thursday.
Talking to the African News Agency on the sidelines of the World Economic Forum Africa meetings in the Rwandan capital, Nedbank's chief operating officer, Mfundo Nkuhlu, acknowledged the Fourth Industrial Revolution had disrupted the industry in a way that was well known in business today.
“We are all challenged to revisit our business models,” he said, “and ask if the way of doing business yesterday is still good enough for today and tomorrow.”
But, he added, the digital revolution was also forcing banks to go back to the basic principles around knowledge and trust that, in his words, had always underpinned banking.
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He mentioned Discovery Bank, which would be a digital bank from the outset, and would soon be coming to South Africa.
As the financial services landscape changed and new players, including those from outside of the sector, entered the market, Nkuhlu said , “existing businesses can't sit back and watch the drama playing out”.
“We have got to respond,” he said. The question, he said, is what that response will be.
“Banks are looking for that competitive edge that gives them enduring relationships with their clients.” And a key part of the response, he said, is to reclaim trust. “We have to go back and win it.”
As many transactions shifted to mobile devices, he said the challenge was to make people comfortable with transacting “with us and through this medium”.
He said customers needed to be assured that their money was safe and their data was secure. This would require the bank to get to know its customers better and to build trust with them.
Nkuhlu stressed the Fourth Industrial Revolution opened up opportunities to solve the other big challenge facing banks, financial inclusion, which “historically we have not been able to solve with the existing models”.
Noting that financial inclusion was intrinsic to growing the economy sustainably, he said: “My own sense is that there is no silver bullet, but there is a revolution under way and this revolution certainly is a game changer.
“So did this revolution open up opportunities to solve the challenge of financial inclusion? “I think so, it's got to get us there,” he said.
AFRICAN NEWS AGENCY