DIGITAL BANKING | 19 APRIL 2021

Innovation is key to unlocking
Africa’s banking potential

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Technological breakthroughs in the banking industry have shaped how we bank today, advancing an industry that is reliant on innovation to meet the needs of its clients. These advancements are a part of our everyday life and challenge banks to create innovative solutions that make their clients’ run their business easier and it is imperative that the industry adopts the latest trends in technology, security, design and data.

As a Transactional Banking business, Absa’s ambition is to provide its clients with a Pan-African platform that will enable them to effortlessly oversee their payments, collections, information products, trade finance, FX and international banking as well as liquidity management through a single platform.

For this reason, Absa Corporate and Investment Banking (CIB) has over the past three years been investing in building out the Absa Access platform. Absa Access is a Pan-African, single sign-on platform that gives clients standardised, secure, and near real-time access to their business portfolios and the banking services. This enables them to make informed decisions to drive the growth of their businesses, managing their finances with the speed and intelligence that the platform provides.

“This platform will offer our Corporate clients with an integrated solution to complete their domestic and cross border payments including verified payments - including Tax and Custom Payments. This ensures greater visibility of their cash flow needs in all their markets, says Yasmin Masithela, Managing Executive for Transactional Banking at Absa Corporate and Investment Banking

A game-changing platform launched as part of Absa CIB’s digital journey, Absa Access is testament to Absa’s decision to become a digitally-led organisation.

“Absa Access provides a framework which enables clients in the way that makes the most sense for them be it online, host, mobile or API’s or a combination thereof across all geographies. The convenience and risk mitigation options of this framework are enormous as well as allowing us to have a multi-tenant approach which allows us to significantly increase the rate of change to this environment as the market changes around us,” says Masithela.

James Scott, Head of Absa Digital and Platform Services, says there has been a big shift in the way that businesses are looking for solutions from their banking partners. “It is imperative that the industry adopts the latest trends in digital, data, security, experience and design. The shift from traditional products to platforms will be a big trend unfolding on the continent in years to come.”

Masithela believes that the payment industry on the continent will represent a big opportunity for the CIB cluster, driven by the displacement of cash, increased digitisation and the potentially shifting regulatory landscape. The opportunity to deliver solutions and form partnerships to capture the growth will be essential and with competition from fintechs, telcos and the traditional players it’s going to be an interesting time for the continent.

The increase in the number of Fintechs, innovative solutions from Acquirers and other technology companies as well as digital solutions from Telcos operators will all provide new opportunities on the continent.

The biggest opportunity remains the displacement of physical cash which still accounts for more than 70% of transactions and remains a costly method of doing payments. According to a study by Mastercard, the cost of cash processing  in South Africa is R23billion and estimated to be R45billion in Nigeria according to analysis from the Research Gate reviewing the importance of the Cashless Policy in Nigeria, says Masithela.

Data out of the African Development Bank estimates the Trade Finance Gap in Africa to be $91bn, with the focus on Intra Africa Trade and improving credit risk management solutions on the continent, the ability to offer innovative finance solutions on the continent will offer new opportunities for growing the bank’s market share in trade.

New digital solutions - such as concluding trade transactions using blockchain - will increase the data integration between the flow of goods and the financial transaction flow, which will improve the risk profile of trade transactions and be the catalyst for narrowing the Trade Finance Gap.

Masithela concludes: “We have invested in both technology and people in this space and are transforming towards a more modern world which is more aligned to customers and responsive to market changes.”

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