International banking on the rise in Africa
The political changes in Zimbabwe, for instance, have opened the door for the repatriation of money back into that country, while there is a shift to externalise funds in economies that have exchange controls.
Exchange controls and policy changes, together with political stability, remain crucial factors dictating levels of demand for international banking solutions.
Namibia is a good example of a country which has reviewed its exchange controls and is, therefore, experiencing far more interest in offshore banking solutions. Externalisation of money from a country like Kenya, in contrast, remains high due to the large number of International organisations, NGOs and foreign multinationals headquartered there and in need of sophisticated international banking solutions.
The local political environment will continue to contribute strongly to any future increase or decrease of wealth in Africa - at 51percent (according to Knight Frank) this factor is much higher than the 14percent globally). A lot of decisions will be made based on the political conditions and regulations and these need to be well understood. Increased wealth is driving the need for advanced, bespoke international banking solutions. In the Knight Frank 2018 Wealth Report, 76percent of African wealth managers say they expect their client’s wealth to increase this year compared with a global average of 67percent - and more of these affluent individuals are looking for international personal banking solutions.
One of the major trends in the mass affluent space at the moment is putting away money for education. This is often housed in college trusts so that children can be sent to colleges in countries like the US, UK, and Australia to gain international exposure. Noticeable demand for these types of externalised solutions is seen in Kenya, Nigeria and Ghana. According to Knight Frank, 43percent of those in Africa expect to send their children overseas for their education compared with a global average of 41percent.
This means individuals and their families need to spend more time planning to meet their goals - especially if these goals need to be paid for in foreign currency.
Saving for a rainy day or retirement are other major trends as more people realise they do not want to become burdens to their families. This entails quite a big shift from the traditional thinking of life insurance, investment and health management solutions increasingly needed for individuals and corporate customers.
But just because your money is not on the same continent or country as you, does not mean you cannot have control over it. An international banking account is one of the best ways to open the door to a vista of opportunities, including personalised and 24/7 digital service wherever you are. One account enables you to access foreign exchange, savings and other structured products.
Nina Kinyany is the head of distribution for International Personal Banking, Africa Region, at Stanbic Bank.
- PERSONAL FINANCE