24TH AFRICA REGIONAL GROUP - Innovation, strategies to optimize creation and deployment: Advances: which technologies, for whom? Why? And how? ...
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24TH AFRICA REGIONAL GROUP
Innovation, strategies to optimize creation and
deployment: Advances: which technologies, for
whom? Why? And how?
© Strands Inc. 2018
Africa – 2nd Fastest Growing Banking Market Wordwide
BANCARIZADOS
Retail-banking
penetration
stands at just
SUB-BANCA- 38% of GDP =
Half the Global
RIZADOS Average
© Strands Inc. 2015
NEW OPPORTUNITIES AND CHALLENGES
Fintech
Market
Evolution
OPEN API´S
MACHINE LEARNING
PREDICTIVE ANALYTICS
DISINTERMEDIATION
INTERNET GIANTS THREAT
Other banking
New
Challenges
Consumer Habits
LARGE LOW
INCOME
MOBILE
POPULATION
REAL-TIME WIDESPREAD USE
UBER/FB/AMAZON EXPERIENCE OF CASH
LESS LOYALTY POOR COVERAGE
OF CREDIT
BUREAUS
© Strands Inc. 2015
NEW LANDSCAPE => NEW MARKET DEMANDS
Trends that will have the biggest impact on retail banks by 2020
BEHAVIOR CHANGE: MORE COMPETITORS - NEW AVAILABLE
SHIFT TO DIGITAL INDUSTRY DISRUPTORS TECHNOLOGY
Mobile mind shift. New digital banks and B2C More advanced application
Customers expect FinTech providers are of artificial intelligence e.g.
convenient, real-time, attracting your clients with Machine Learning. Better
frictionless experience. more lucrative offers integration capabilities of
software
Efficiency Agility Personalization
"One-quarter of urban Africans are online at
least 10 hours a week. The large
majority of African Internet users access the
web via mobile devices—and most of them are
young.”
© Strands Inc. 2015 Source: McKinsey Report 2018 – Retail Bankingi
Innovation and Digital Disruption
“total digitalisation, machine learning, analytics and Open API are delivering previously
unimaginable opportunities to get closer to customers and re-invent what it means to be a bank
© Strands Inc. 2015
DIGITAL TRANSFORMATION
TYME BANK SOUTH AFRICA
- Clear Digital Transformation strategy coming
from the Top Management ALAT BY WEMA BANK NIGERIA
- Digitize the customer experience End-to-end Building a
- Change the mindset of the Organization: digital new digital YUP BY SOCIETE GENERALE
- Reduce costs
- Agile Methodology
transformation bank
Partner with
Partnering for TELCOS
• Digital Banking Platforms one or more
•
digital reach
Digital Money Management FinTechs
• Chat bots
• Block chain
• Facial Recognition
© Strands Inc. 2015
Personalization is the key
By using analytics banks need to differentiate themselves
create services and tailored products that add meaningful
value to each one of their customers
© Strands Inc. 2015
HOW T O RTO
HOW E ACH P E R FORMANCE
REACH PERFORMANCE ?
It’s not about increasing time spent in the Banking app,
it’s about gaining Quality of Interaction and increasing Frequency of Interaction
An average online banking session last approximately 600 seconds
© Strands Inc. 2015
Source: Unicredit study
KYC: MEANINGFUL INTERACTIONS ?! Moving from something that happens on a weekly basis to several interactions a day
DIGITAL MONEY MANAGEMENT IS KEY FOR LONG-TERM SUCCESS DEMONSTRATE DIFFERENTIATE FROM ATTRACT YOUNGER CUSTOMER ADVOCACY COMPETITORS CUSTOMERS If customers feel a bank DMM will become your They’re comfortable with acts in their best interest, differentiator that digital touchpoints. they will borrow, invest and competitors cannot quickly Building a relationship will buy more replicate pay off later. *Source: Forrester Research
BUILD RELATIONSHIP BANKING Leverage customer data to provide useful insights and personalized recommendations for the next best action
EDUCATE AND FACILITATE SAVINGS
© Strands Inc. 2015PREVENT FUTURE EXPENSES
© Strands Inc. 2015MONETIZE AN ATM EXTRACTION
© Strands Inc. 2015MONETIZE PERSONALIZED CAMPAIGNS
© Strands Inc. 2015ALERT ON FUTURE PAYMENTS
© Strands Inc. 2015SAVE BY COMPARISON WITH YOUR PEERS
© Strands Inc. 2015THE WAY TO GENERATE NEW REVENUE FOR BANKS
Offer SMEs value-added services
Did you know?
More than half of SMEs are willing to pay an additional $10 every
+10
$ month for personalized business financial management services
Banks (in the UK) could open up to £8.5 billion in new revenue
£8.5 streams by 2020 by delivering value-add products and services to
BILLIO
N SMEs
If banks are unable to address SME pain points, 1/3 will turn to non-
1/3 banks to make payments, access loans, and manage transactions.
Source: Accenture “SME Banking 2020”, Aite Group
© Strands Inc. 2015Corporate Banking SMEs Retail Banking
“There is an alarming disconnect between what small
businesses want and what banks deliver.”
PAIN POINTS OF THE “MISSING MIDDLE”
1 2 3 4
Prohibitive costs to
Dispersed, unintelligible Too many different tools to No way to track or forecast
professional financial
financial data manage day-to-day tasks cash flow, AR/AP
management services
5 6 7 8
42% WOULD SWITCH TO A
40% need advice to run
70% have no relationship BANK OR FINTECH THAT
Manual invoicing business more effectively
with a bank manager SHOWS AN UNDERSTANDING
and plan growth OF THEIR BUSINESS
Source: IFC, World Bank
© Strands Inc. 2015R
Digital Money Management helps banks shift from being money movers to
money managers
Customers use a PFM & BFM app in
everyday life to help them take better
decisions. They expect to be
understood, advised, alerted, excited
Banks leverage customer data to:
• get valuable insights,
• proactively anticipate customer needs,
• suggest next-best-actions,
• improve loyalty.
© Strands Inc. 2015The new technological developments are without doubt the real game-changer.
FinTech start-ups and large technology-driven entrants such as Apple,
Amazon, Alibaba and Google, pushed by shifting customer behaviors, are
bringing innovative products and services to a conservative industry which is
banking. In the long term, this technological change will have the most profound
impact on financial organizations, followed by demographic change, social and
behavioral change, and the rise and interconnectivity of emerging markets.
BANKS NEED TO SWITCH FROM PRODUCT CENTRIC TO CUSTOMER
CENTRIC BANKS
© Strands Inc. 2015600 Banks Worldwide Powered by Strands
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ABOUT STRANDS: THANKS!
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Sanziana Gheorghiu
TWITTER Sales Manager Africa
@StrandsFinance gheroghiu@strands.com
Twitter
@SanzianaG
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© Strands
© Strands Inc.
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