Absa Group to leverage on new technologies to make banking and ways of payment cheaper for customers
By Nana Appiah Acquaye, Ghana
Africa’s largest diversified financial service group, Absa has expressed its unflinching determination to invest in emerging technologies such as artificial intelligence (AI), big data and Internet of Things (IoT) to make banking and ways of payment cheaper for all its customers across the continent.
Aspiring to become an entrepreneurial, digitally-led organisation with global scalability, Absa Group is convinced that it’s on the right track following a massive surge in digital use and pick-up by customers in all its regions in recent times.
In an exclusive interview with Biztech Africa, the Chief Executive Retail & Business Banking and Chief Digital Officer at Absa Group, Absa Regional Operations, Vimal Kumar talks about one of Absa’s key pillars in its new Growth Strategy, how its reacted swiftly to the COVID-19 pandemic by designing, offering and implementing smart solutions and offering significant financial respite during these times and how the group is currently helping SMEs /MSMEs to build ecommerce capabilities to sell and accept payments digitally.
What role does digitization play in Absa’s current operation in Africa?
One of the key pillars of our new Growth strategy is to build a scalable-digitally led business. Our aspiration is to become an entrepreneurial, digitally-led organisation with global scalability. Our motto is to bring ‘Possibilities to life’ and therefore pushing digital boundaries to become customer-obsessed is at the core of our focus. We aim to differentiate ourselves by responding to the evolving needs of our customers through the right technologies but more importantly, by focusing on listening to what our customers want and on giving it to them. There is a high degree of awareness around the fast changing landscape at Absa and efforts are being put in place to accelerate the transformation journey by opening up our legacy systems through micro-services / APIs to collaborate with fintechs and improve digital offerings to our customers. As we progress along our digital journey, we will continue to focus on change that brings value to our customers. And because we recognise the cultural change that a digital transformation entails, we are already taking the initiative to empower, engage and make our employees future-ready.
We will pursue investing in emerging technologies such as AI, big data and IoT as they have the potential to revolutionize the customer experience by providing personalized services and improving the back-office efficiencies. Our digital transformation towards a low-touch, low-contact future is accelerating at a fast pace. In driving this, we will make banking and ways of payment cheaper for all our customers. We are already seeing a massive surge in digital use and pick-up by customers in all our regions which reinforces our conviction that we are on the right track.
What innovative solutions have Absa deployed to drive its digital agenda while ensuring the safety of customers during the pandemic?
We are in very tough times not only for the economy but also humanity. Absa has reacted swiftly to the COVID-19 pandemic by designing, offering and implementing smart solutions and significant financial respite during these times. As a responsible African financial institution, we have taken various measures not only limited to tangible relief in this time of distress, but also true customer value in an ever-changing world.
For any indebted individual or business, servicing debt during such difficult times is a source of anxiety. Relief measures have included repayment breaks, moratoriums on capital repayments and the waiver of fees on interbank transfers through internet banking and bank-to-wallet transactions, among others.
A payment holiday – which also defers the tenor of the repayment – is just one option available and is primarily designed to offer immediate relief and ensure a continued cashflow for a household or business facing financial hardship, while at the same time protecting credit worthiness. The option to exercise a payment holiday is a conversation between the customer and the lender based on the profile and individual circumstances of the client. All of this has been done in consultation with regulators and governments acknowledging that we need to navigate the Covid-19 crisis together.
These solutions have been carefully thought through to assist those most in distress during the initial wave of the Covid-19 economic slowdown. Although we live in an era of social distancing, geographically segregated interaction, and government-enforced lockdowns, our technology and the array of digital products we offer have enabled us to continue to serve all our customers efficiently and effectively. It is inevitable that a post-Covid-19 world will see us emerge into a more digitally-driven space. Absa is actively driving the roll-out of digital infrastructure and offering our customers more innovative solutions. Customers can bank in a variety of ways: internet banking, Mobile app, Mobile wallet, mobile and e-commerce and contactless payment capabilities.
How will Absa make banking and ways of payment cheaper for customers on the continent taking into consideration Absa’s digital transformation which is currently accelerating at a faster pace?
At Absa, we have a successful wallet offering in our Kenyan market called Timiza - a banking app that allows customers to open an account, apply for lending, create savings products, pay a bill, and purchase airtime amongst other things – all from their mobile phone. With over 4,000,000 customers in less than 3 years of launch, we are confident of the potential it holds. We will keep enhancing this platform and will soon be expanding similar wallet propositions across our other markets. This offering would also empower our merchants to accept payments via QR code which is cheaper and faster than other payment alternatives. Many consumers are now turning to the smartphone as the preferred tool for making online and proximity payments as they offer more convenience and security. We are looking at solutions given the current pandemic backdrop, to help our SMEs /MSMEs to build ecommerce capabilities to sell and accept payments digitally. We have also started to put together the building blocks that would help us create a pan African ecosystem enabling faster and cheaper payments both for merchants and retail customers.
How do you see the future of digital banking in Africa and how can financial institutions including Absa promote digital inclusion?
We realise that Africa has the greatest potential to make a significant dent in improving the lives of people given the fact that in Africa a large part of the population around 1 billion still remains unbanked coupled with the continent’s population growth estimated to double to 2 billion plus by 2050 as per ‘The Economist magazine’. One such financial inclusion initiative at Absa has been its partnership with Jumo, a fintech startup to provide progressive and inclusive financial services, including small, short-term loans issued to mobile network operator customers via a simple feature phone and MTN in Zambia and Ghana. We shall roll out this initiative soon in Tanzania in near future. The platform enables credit scoring and facilitates fast, easy loans for mobile money users. In addition to digital lending, the savings solution also provides a simple, easy to understand and convenient savings product driving financial inclusion and encouraging a strong savings culture. We have been able to attract hundreds of thousands of small loans transactions through this platform in a very short span of time. At Absa Group, we will focus on providing financial access and expanding on our key strategic digital initiatives including digital payments, micro-loans and savings, digital onboarding, cardless payments etc, to lower entry barriers for customers, reduce the cost of transactions, and improve the quality of financial services.