For the past 10 years, Kenya’s financial services sector has been experiencing disruptions. This has been accelerated by the Covid-19 pandemic, which has forced customers who once resisted online banking to adopt digital banking apps as their new default.
Trend analysis, a tool used to assess what has happened in the past, gives us an idea of what will happen in the future banking system. It clearly shows that digitalisation is resetting virtually every industry.
For example, during the Covid-19 pandemic, the financial services sector has seen the rise of artificial intelligence (AI) powered banking systems, digital lending apps and cryptocurrencies trying to close the financing gap in especially with micro, small and medium enterprises (MSMEs). It’s the age of Fintechs.
The growth of e-commerce in the past five years, which is being accelerated by Covid-19, has had an overwhelming effect on the retail industry.
As a result, some big brands have fallen, and others are teetering along.
This clearly shows that key sectors like banking may not withstand the raging digital assault both locally and internationally as more customers are now appreciating how convenient to bank digitally is as opposed to going to physical branches.
A McKinsey Global Banking Annual Review 2021 shows that the pandemic has had harmful financial effects on the global banking industry.
Digital banking has accelerated. The use of cash has fallen, savings have expanded, remote has become a way of working, and the environment and sustainability are now top of the mind for customers and regulators.
The McKinsey review noted that as the banks were responding to the challenges, a slow-motion investment trend went viral. And investors have been drawn to a new generation of financial service companies that have pioneered new ways of using technology to better serve customers.
Companies like Amazon, Apple, Google, Netflix, and Spotify have taken existing services and transformed them into digital experiences that are now embedded in customers’ daily lives.
Some also offer credit cards, and the majority offer point-of-sale (POS) consumer finance choices. Alibaba and Tencent, both based in China, provide even more services.Fintech and big tech advances into banking are no longer merely a threat. They are real. And banks are replicating this model in financial services, turning products into features to meet customer needs and keep them engaged.However, the existing, underlying elements are still there. Like the checking account, the personal loan, or the POS terminal. But they are less visible, a seamless part […]
