Changing Trends In The Financial Sector
Wow, 2020 was a year that all the rules in financial services markets were brought to hold. Traditional financial institutions were faced with challenging moments. Walk-in services, and face-to-face or over-the-counter services were suspended or operated at 20% capacity due to the lockdown restrictions. Such a move to the sector so a reduction in the quarterly earnings in all banks across the board.
- As we move into 2021, the financial sector needs to rethink and repackage its service offer. Increasingly walk-in services are becoming expensive as the cost of doing business. Bank need is relocating their budgets into technology infrastructure setups and seeking partners to propel their existing. It can be predicted that in the next 2 to 3 years, financial institutions will be spending more than 45% of their budget on IT infrastructure set-ups and maintenance support.
Today, it is noted that banks are now moving fast to embrace and transform their traditional walk-in service users to mobile apps and web-based platforms. Most of the banking halls are limited with staff; as banks were organically forced to downside the non-critical staff and allow other staff to work from home
Digital Banking Anywhere
- The Uganda market has not been left untouched, with only 21% of the population banked, institutions are slowly focusing on the conversion of these individuals to mobile apps, USSD for feature phone users and to web-based platforms. Yes, this is possible for the bank since over 53% of the population in Uganda has access to mobile phone facilities. It is not a surprise that Mobile Network Organizations (MNO) are making transactions that are three times bigger that all banks combined in a month. These companies have access to the number of registered users due to the alternative service offers predesigned in their business models.
Individual bank consumers are looking for convenience and are less mindful of the cost of service. It is true that mobile-based transactions are more expensive than banking costs, the users of mobile services are happy with the service due to availability, reliability, outreach and presence in their remote areas or abroad. It is time for the banks, and sector regulators to rethink the service delivery models for the common individuals and more so the unbanked 79% of the Ugandan population
Robert Kintu. M. J. The writer is the Country Manager /CEO of Maalicard digital banking solution, one of the first neo-banking models in Uganda.