Prior to the mechanics of the digital system in Africa, we experienced an analog mode of operation in the banking system where we could only run transactions inside the banking hall where our accounts domiciled and this took a lot of hours out of our daily times. Cash posting to other countries takes longer days to mature. The trade system also experiences ugly trend where the marketers have to travel with cash from one town to another and thereby attract robbers who rob them of their cash and valuables. But now, bank accounts are agnostic of locations where they were opened.
The past two decades, which was the gradual invention of digital banking operations such as the supply and installation of Automated Teller Machines to their respective banks and the configuration of ATM cards which bring seamless transactions and relief to all in Africa.
A decade ago, was the incorporation of a cashless policy society with POS flag off, Agency Banking, USSD (Unstructured Supplementary Service Data), Internet Banking, Mobile Money Operation and Web Pay Services. These domains substantially reduced the banking stress and increased transactions operation across Africa. These digital products and services have increasingly boasted the economy from 14% to 78%, reducing crime rate, fraud and money laundering.
More innovation forces and creativity have led to more growth and opportunities, which in turn open the door to more innovations and creativity. Many years, you were likely to get a job and become financially independent within a few years after graduation. This isn’t the case for young Africans right now – a group that constitutes about 58 percent of the population in Africa. The population of Africa has grown exponentially and with it has come increased competition for jobs. To make up for this, more young people are starting businesses and embracing creative career choices fueled by the rapid penetration of the Internet and digital technology. These two factors have introduced new dimensions to how we do business and make money. Today, we have smartphones that can allow us to speak with our friends in myriad ways, including over social media, instant messaging apps, email, audio and video calls. All these new developments have impacted how we relate as humans, they have also influenced banking and of course redesign the windows of job opportunity in Africa.
So, now we have a generation of entrepreneurial and creative Africans, a generation accustomed to living through mobile, software and digital technology which in turn have revolutionised every industry known to man.
Now Cybersecurity – Cyber threats are real. A securitymagazine.com report states that a cyberattack occurs every 36 seconds. Now, think about the import of this in Africa that is predicted to have over one million devices in a few years; this simply means that there will always be a vulnerable device available to be attacked. I believe this has also helped us ramp up software development such as machine learning and artificial intelligence in dealing with the shameful problem of corruption and introduction of e-voting in election processes and other vices.
The impact of Artificial Intelligence continues to be felt across industries substantially in marketing and sales, logistics as well as supply chain management and manufacturing. AI has the potential to create trillions of dollars of value across the economy if business leaders in Africa work to understand what it can and cannot do. However, a number of studies have argued that AI and robotics will take over 50 percent of human jobs in the next 30 years, but will expose human to more newly creative mechanised works to do in either agriculture, crafting and artisans’ jobs which would also attract AI and thereby create more technology advanced jobs opportunities. The research sensitivity is due to the exponential advancements in robotics, quantum computing and AI.
Restrictions on movement and reduction in the handling of physical cash because of Covid-19 pandemic caused mobile money transaction volumes in sub-Saharan Africa to reach $490bn in 2020 – Visa report. Digital innovation and technological advances are bringing exciting opportunities for financial inclusion to the fore. Technology is now a tool to leapfrog over old processes, systems and protocols for the benefit of everyday consumers.
Moreover, before the advent or insurgence of Covid–19 pandemics, which vehemently awakes all of us and teaches to the conclusion that we must all go digital across board, forces us to shift our behaviors and adopt more technology to assist our day-to-day lives in all aspects, Africans believe and practice the linear chain of home to office as employees carry out their job roles on daily basis in the office.
Now, digitalisation has broadened our knowledge such that 72% of the corporate world work from home with an inestimable height of productivity, virtual meetings can be held with different online platforms.
Post covid has given birth to more digital products and offerings such as card less transactions, thumbprint transactions, eye lens contact transactions alongside QR scan transactions mechanism, all these as a result of the advanced tech system and innovation.
Talking more on POS / Agency Banking System – this has become a much bee in the air with a lot of tech giants in operation. If you understand the market, the MSMEs, empowerment via loans to fund business and the startups, the growth execution, the value creation and the Return on Investment are awesome. Across Africa we have a large percentage of people living below the average of 69% total population, have no access to funds, no access to bricks and mortar banks, no access to loans and benefits. Agency banking is all about financial inclusiveness under an enabling environment and thereby contributing to the economic growth of the nation.
Agency Banking is an innovative solution borne out of digital proportion for customers and other stakeholders including SMEs. It is to bridge the financial inclusion gap by empowering the underserved individuals and businesses in emerging and frontier markets with a range of financial services such as but not limited to – cash transfer, cash deposit, cash withdrawal, bill payment, airtime vending, data subscription, satellite subscription. It exposes SMEs to various finance opportunities that they could access and utilise to foster the continued growth of their businesses, while optimising the sustenance of their business operations in contributing to national development.
The product acts as the financial access lifeline for individuals and communities in otherwise hard to reach towns and villages, the unbanked or underbanked areas, to enable them access and manage their money more efficiently and productively. This also serves as means of showcasing other deliverables a particular company has within her subsidiaries for the agents and their customers to patronise. Agency Banking enhances the capacity building pillar of its value propositions to SMEs.
Aside banking services, Micro Health Insurance is another enabling service offered to these agents via POS usage, such that their health security is covered monthly, quarterly or annually. Upon subscription, they are channeled to the Clinics and Health Centers closest to them for medical checkup, test, drugs administered and treatment.
Digital marketing has greatly advanced the emancipation of the Entrepreneurs and startups on a daily basis. Entrepreneurship is inherently risky such that business owners must possess the ability to mitigate company specific risks while simultaneously bringing a product or service to market at a price point that meets consumer demand levels. Digital marketing has therefore leveraged a window to showcase these products to prospect markets.
Digital and technology have drastically increased job / wealth creation in every sector of profession. We can shop online with easy payment mode, we can apply for admission online, we can study online and acquire certification, we can do interviews online, we can pay our bills online and so on.
Conclusively, is the introduction of digital currency which will deepen financial inclusion in Africa. Most central banks had indicated keen interests in developing their digital currencies in response to the threats and limitations of cryptocurrency including poor regulation, price volatility and facilitating illicit financial transactions. Virtual currencies would henceforth enhance smooth financial transactions, eliminate bottlenecks associated with the use of cash (mutilated notes, forgery, cash handling charges, shortages) and increase the velocity of circulation.