Arusha — The race to adopt technological innovations in providing banking products and services is steadily gaining momentum, with the initiatives being taken to satisfy consumers and reduce operating costs.
Digital services are always quick: a favourite trend to millennial customers who demand instant money – and have no time to queue up in banking halls.
The products and services provided through fintechs also require less human involvement in their provision, making them cheap to operate.
However, bank executives are aware of the risks associated with the digital transformation, including possible breach of data, intrusion into customer privacy, cyber-attacks and tech-related fraud.
Experts warn that banks should cautiously switch to the new innovations – and also ask the regulators to get ahead of the race.
Things like ‘cloud computing’ are being touted for making bank services cheap and fast.
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Tanzania Ports Authority to use Sh10bn for upgrade of Lake Zone portsFor example, research company Financial Insights estimates that the biggest global banks are saving $15 billion from cloud adoption, cutting technology infrastructure costs by 25 per cent.However, the journey is not smooth for the lenders who face security challenges.Last year, research firm Cybersecurity Ventures predicted that cybercrime would cost the world $6 trillion annually by 2021 – up from $3 trillion in 2015. This represents the greatest transfer of economic wealth in history, risks the incentives for innovation and investment – and will be more profitable than the global trade of all major illegal drugs combined!The digital age of financial services was one of the dominating issues at the last week’s East African Banking School: a regional conference that gathered bankers from the EAC member countries in Arusha.Themed ‘The Role of Ethics in the Digital Age of Financial Services,’ the five-day meeting accommodated discussions on how the lenders can play safe in the digital era which has seen increasing concerns like cybercrime and fraud, as well as breach of customer data and privacy."Technology is growing fast; but, as bankers, we need to make sure what we enroll in our systems are secured and regulated as well," said Mr Wycliffe Momanyi, head of risks at the Kenya bank KCB. "We need to ask ourselves if the architects of the applications we use are also secured to mitigate the risks," he said – adding […]