Experts say this turn to digital is being accelerated by younger, tech-savvy generations who are quickly becoming the banks’ largest addressable market. Online banking. The number of over-the-counter bank transactions has gone down The year 2019 saw traditional usage of banking channels steadily dwindling, while digital channel usage remained firmly on the rise.
Financial institutions are fast realising that working in silos is not the best approach in the fast-changing environment, given the test case of initiatives such as agency banking.
“There has been a significant decline in the number of transactions carried out in bank branches to just under 15% of total volumes, down from 37% three years ago. This is a significant shift in how customers are choosing to transact,” Patrick Mweheire the chairman Uganda Bankers Association, said recently.
Experts say this turn to digital is being accelerated by younger, tech-savvy generations who are quickly becoming the banks’ largest addressable market. Commercial banks are intensifying their digitisation efforts in the face of changing consumer demands and growing competitive pressures.
But as the fintechs or financial technologies disrupt the traditional banking sector, innovations within the fintech space is also threatening their very own emergence.
What are fintechs?
Fintech is the technology and innovation that aims at competing with traditional financial methods.
Companies such as Userremit, Paypal and Worldremit are some of the innovations that put financial institutions and money transfer players (Western Union, MoneyGram) on the backfoot in the recent past. Their launch in the last couple of years gave customers more choice, flexibility and better service.
For instance, Useremit, a Ugandan founded firm, joined the market in 2013 offering peer-to-peer money transfer services. But in 2017, its founder Stone Atwine, rebranded the company to Eversend, making it one of the first locally-founded neobanks.
In an interview with New Vision , Atwine believes that 2020 is the year where most fintech companies could be forced to merge.
“We are going to see more bundling of payment of applications (or companies) this year. Today, people have a money transfer app, a loan app, internet and airtime app, utility app. We are thinking why not do all these things in one app,” he said.“What we are trying to build is a real digital banking alternative. It’s not a bank but it can do 95% of what you can do with a bank,” Atwine added.The use of mobile money in East Africa has been a key enabler in […]