EDITORIAL COMMENT : Time to make banking simple, exciting

ZIMBABWE’S financial services sector should invest more in technology, innovation, research and development in order to make banking attractive and exciting

Innovation helps the financial services sector to rid itself of processes that delay the banking public and in the process increase charges.

Investing in research and development and innovation however, is not limited to the banking sector, but to every sector of the economy.

In our issue of The Herald Business yesterday we had a story on innovation being the answer to the challenges companies may face, the banking sector included.

Although the story was premised on the mobile communications sector, it carried important lessons for almost all sectors of the economy.

We argued that innovation and not steep data floor prices was the solution to falling revenues particularly voice call revenues.

We had an anecdote on the failure of Nokia to innovate which became the Achilles heel that led to its demise as it became irrelevant to the technologically developing market.

Same goes with the banking sector.

While some banks have moved to paperless banking, internet banking and such like products that reflect today’s banking trends worldwide, we, however, have others that are still stuck in the Stone Age era.

Voluminous paperwork, emphasis on brick and mortar, long queues and slow processes has become a heritage for such banks.

Some banks are very slow to respond or implement efficient processes that benefit the transacting public.

Also, while other banks have introduced weekly withdrawal limits which have gone a long way to end queues in their banking halls, others are still lagging behind allowing a small withdrawal on a daily basis.

This has a tendency to siphon the transacting public through transaction charges.

And with civil servants salaries starting from this week, we have seen the return of queues particularly because some banks are slow to innovate or regenerate their processes.

No wonder we have seen the return of long queues to some of these banks despite the injection of bond notes to the tune of about $73 million by the Reserve Bank of Zimbabwe.

Take CBZ Bank Limited, depositors are allowed to withdraw $70 per day for individual accounts and $100 for corporate accounts. What is worrying is that, for corporate accounts, for instance, the transaction charges at the bank have not yet been revised downwards and are still at a heavy $10. What this means is that the corporate depositor is losing value with every transaction.

Also, individual depositors are forced to come to the brick and mortar on a daily basis! Why not come up with a maximum weekly withdrawal limit which a depositor can take at once and avoid the daily transaction exorbitant charges?

We do not expect that kind of snail-pace to innovation from established banks such as CBZ.

Also, banks should come up with products that resonate with the banking publics taking into consideration issues such as demographics of the depositors and other developments in the technology sector.

Make banking exciting. It should not be burdensome or cumbersome to make a banking transaction. That way banks will be able to attract more depositors. Some of those depositors may see reason to save, something which the country is grappling with.

Short-term depositors have dominated the banking sector’s books and this means that there is nothing for onward lending.

First entice a potential depositor through innovative banking and once you capture someone’s attention it would be easier to build a relationship which translates into them saving money in the bank.

At this other commercial bank it took a depositor more than one hour just to make a deposit! The young lady who was manning the deposits counter was taking her precious time, chitty-chatting with colleague workmates.

It is not clear whether it was the system that was slow or it was the young lady who enjoyed the admiration of those depositors on the queue.

If it is the bank’s systems and software that is slow, something must be done before those who have been loyal to using the formal banking channels begin transacting on the informal market.

Or maybe it is that particular bank’s culture to keep the banking public standing in queues for long hours.

It is high time banks invest in research and development and develop products that are technologically relevant to the needs of depositors.

We need to correct such issues and make banking innovative, simple and exciting.

Article Source: The Herald