RISK MANAGEMENT | 20 OCTOBER 2021

Africa driving the
banking revolution

Absa-CIB-Author

Matt Harcourt

Chief Financial Officer

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Matt Harcourt, Chief Financial Officer, explains how Covid-19 has disrupted traditional banking channels, including in-branch networks. The pandemic has challenged us to reimagine new channels that will enable our clients’ success on the continent. Through developing Absa Access, our new online single sign-on platform, we have created innovative banking that solves real-world business problems in a rapidly evolving business environment.

Revenue is vanity, profit is sanity … but cash is king.

Until you have run your own business or been tasked with managing the financial affairs of a high-growth entity, it will be hard to get a true appreciation of this oft-repeated business mantra. The events of 2020 have highlighted the reasons why vanity metrics in your business count for nothing and why you need the right tools in place to ensure you are measuring the right elements.

With COVID-19 disrupting many of the traditional banking channels - including in-branch networks – having access to technology and the right banking partner has often proven to be the difference between success and failure for businesses on the continent.

As a bank, we are constantly being challenged by our clients to develop and rollout integrated digital solutions that can help them do more business, more efficiently and across multiple technology channels including mobile phones and tablets.

The rapid adoption of our Absa Access solutions appears to be a sign that we are on the right track – we are not just building technology for the sake of technology but rather developing tools that solve real-world problems to address the rapidly evolving business environment.

Cash management is a perfect example: The lifeblood of every organisation is its ability to understand its financial position at any point in time and this includes understanding and efficiently managing its own cash conversion cycle (CCC). All the invoicing in the world counts for nothing if you are unable to convert it to cash in a cost-effective manner.

Absa Access offers key solutions in optimising our customers’ Cash Conversion Cycles starting with simplifying the bill receivables process for corporates. A corporate can now offer their clients the ability to pay their bills on our platform which decreases bill reconciliation challenges and improves liquidity management.

Cross-border trade on the African continent is expected to boom in the coming years as new trade zones are introduced and it becomes easier to move money and goods between African countries. As a forward-thinking bank, we have focused on developing solutions to assist companies which import products from suppliers in other countries and need simple solutions to make the required payments. Absa Access enables clients to initiate trade-related transactions, such as Letters of Credit to international suppliers, to apply for Foreign Exchange and to make international payments all on the same platform.

This integrated offering enables Absa corporate clients to have greater visibility and control of their financial obligations at any time and from anywhere, a proposition that is superior to the brick-and-mortar option that has dominated banking for decades.

Corporate customers have taken this adoption of technology one step further, asking their bank to integrate into their systems to harness efficiencies and enhance their control environment.

Digital platforms provide banks with a far more efficient way to scale.  Banks are investing in the architecture needed to host more services in order to reduce their own operating costs, while ensuring they cater for clients that expect more services to be provided online.  Failure to do so by banks with longstanding heritage and legacy, could mean losing customers to FinTech companies or new digital-first banks.

At Absa, we have embraced this innovative path and have focused a lot of effort over the last couple of years on finding solutions that put customer experience at the heart of our transformation plans. The approach we have followed includes some key partnerships, as well as investment in strong technology skills for in-house developed technology.

One of the key items that many in digital banking circles are debating is whether the shift to digital channels is a pandemic inspired or motivated trend or whether it will become a more permanent part of banking interaction with corporate clients.

In February 2021, consulting house Accenture released a report following 47000 interviews with consumers globally and there was a telling quote from Jigyasa Singh, Technology Managing Director for Accenture Africa where he notes:

"The pandemic-inspired increase in digital engagement is a double-edged sword for banks. While it has allowed them to serve customers efficiently throughout the pandemic – and advanced their digital strategies by up to five years in some cases – it has pushed them to launch solutions that are functionally adequate but devoid of emotion. To forge strong customer connections, banks must reimagine the digital services they provide and make those connections more personal and relevant."

This is where we believe that Absa and our suite of digital products intersect perfectly with our skilled banking and sectoral specialists. We have been able to couple innovative technology solutions while using big data analytics to provide insight to our corporate clients around their business and customer behaviour.  We can take a business challenge and then provide an integrated technology and finance solution that fits the business requirements.

The boom in mobile telecommunications has resulted in the digital banking revolution in Africa being more pronounced, and we at Absa believe that we have developed solutions that don’t pander to vanity metrics but rather allow you to make better informed decisions about your business.

Absa-CIB-Author
Matt Harcourt

Chief Financial Officer

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