Digital banking, by definition, needs to evolve with the times and keep up with the ever-increasing speed of technological change.
Historically it has been a term long associated with the rise of channel banking via the internet and mobile, but today, with Open Banking, the rise of Fintechs and the arrival of complementary digital ecosystems, digital banking has grown to cover a multitude of products and services, channels, analytics and cyber-security. From "bricks and mortar" to call centres; chatbots using AI to Personal Financial Management (PFM); digital banking now extends to a plethora of channels and engagement opportunities and omnichannel engagement.
In the SubSaharan region of Africa, the growth in mobile adoption has seen overall subscriber penetration reach 44% in 2017, up from just 25% at the start of this decade (GSMA). With this penetration, Mobile Money services have driven a phenomenal rise in the uptake of mobile accounts, accelerating the need for innovation in product development to address financial inclusion and to continue to open up the broader banking market.
According to the GSMA Mobile Money Programme, East Africa's active 90-day mobile money accounts number 73.2 million, compared to 121.9 million in the Sub-Saharan region. These accounts are often offered together with services covering a number of products such as credit, insurance, and cross-border remittances; the growth in the market has been vast and fast. Digital banking platforms are key to compete in this area. These platforms seek to deliver both speed to market and also speed of service to the end customer, whilst offering the end-customer relevant messaging at the right time using the right channels. The opportunities to acquire, maintain and retain customers can be best serviced using data-driven customer insights provided by embedded analytics.
As customers learn and adapt to the evolving financial offers in market, digital banking technology will undoubtedly become both more comprehensive and complex in the future. API integration with the niche services being created by Fintechs will be important as part of driving innovation and ensuring maximum financial inclusion. This, however, needs to be balanced with the requirement to avoid costly upgrades which can result from from multiple API integrations. The core capabilities for a digital bank should be integrated and easily upgradeable; moving with the times and leveraging the R&D budgets of software providers and allowing banks to focus their budgets on the customer experience rather than the upgrade of a portfolio of integrations.
Temenos Front Office Suite is a digital banking platform which is integrated; upgradeable; omni-channel and data-driven. Product innovation often needs transactional capabilities that are sometimes not available in legacy core banking systems. Our software is built from the ground up, allowing us to selectively enable back-office capabilities to support a progressive migration away from rigid legacy technologies towards an agile digital banking landscape.
Originally published in Banker Africa