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Huawei at the World Financial Innovation Series 2021

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The seventh World Financial Innovation Series 2021 Africa kicked off on 10 August for a two-day virtual event that focussed on fintech and innovation within the financial sector in Africa. Showcasing a plethora of industry leaders, tech-giant Huawei provided some interesting insights from their own industry leader and representative Ronald Raffensperger on strategic initiatives to accelerate financial digitisation. Raffensperger also moderated a panel on digital disruption in banking and its impact.  

After a riveting discussion on banking in the new era with Africa’s post-pandemic innovation and strategies, Raffensperger was warmly introduced by Conference Director Tarun Nagpal from Tradepass. 

Raffensperger said that digitisation has been a hot topic in recent times, due to the necessity of digital transformation in the wake of the pandemic. He added that the most important aspect of digitisation should be how one will support this initiative moving forward. 

To provide context on the current state of digitisation, Raffensperger said that the applications that people are using on their mobile devices have really changed customer behaviour. People are becoming much more comfortable with using their phones for tasks such as ordering food, requesting a car or communicating on social media platforms. Therefore, it becomes important in the financial services industry to be able to embrace this mobile transformation and support customers in their desire to perform all their financial activities on their mobile devices. 

As internet giants provide all-scenario services that change customers’ behaviour dramatically and the “new normal” accelerates banking digitisation and digital journey re-engineering, this poses new needs and challenges to banks’ services. They need to be customised and available in real-life scenarios, anytime, anywhere, as customers require, for all financial scenarios, to provide the ultimate experience. 

Huawei’s view is that banks need to move away from traditional services where the mobile offering is just another version of internet banking and doesn’t take advantage of the capabilities of a banking platform. Mobile banking should integrate the capabilities of the mobile device and should not only be available to smartphones. In Africa in particular it is important that these facilities are available on any mobile device. 

Leading digital banks should increase the technology investment by building an eco-system platform and providing universal services. These services should encompass traditional financial services (such as deposits and transfers), mobile finance (such as micro-loans and mobile payments) and lifestyle finance to create an all-scenario finance ecosystem. 

Raffensperger added that an example of this is China Merchant Bank, which moved their whole banking focus to monthly active users (like Google or Facebook) to try to keep users on their mobile app. Currently, over 70% of the usage on their app is non-financial, which means clients are using it to interface with e-commerce or food delivery stores.

Raffensperger emphasised that digitalisation will become a core requirement for banks, where the user journey will need to become compatible for mobile devices, with an interface that allows this integration in a seamless fashion. This comprehensive mobile-centric digital transformation will have three major touch points: digital customer acquisition, digital services and digital operations. This means that banks will need to be able to find their customers online and on social media platforms, provide fully digital services and operate digitally internally in a way that utilises technology to ensure processes are as automatic and efficient as possible. Intelligent banks will undoubtedly have a competitive edge through digital operation and services that leverage new technologies. 

Raffensperger named cloud technologies as a very popular and necessary new technology that will be of interest to the banks. This technology will allow systems to automatically adjust themselves. 5G is another technology that will become integral in enabling other services and technologies (like IoT) through fast and seamless internet connection.  

Unlocking the value of data will also be a gamechanger, where diverse data collection will allow for AI-powered data analysis and business innovations such as intelligent risk control, smile to pay, regulatory statements and much more. Raffensperger emphasised that IT architecture must evolve to support digitalisation and that the future of digitalisation is in hybrid cloud technology.  

Thereafter, the panel, moderated by Huawei, provided equally interesting insights into digital disruption in banking and its impact. The panel included Ronald Raffensperger as moderator; Olayinka Situ, Chief Transformation Officer at the First Bank of Nigeria; Mohamed Fathy, CIO of EFG Hermes in Egypt; Onyebuchi Akosa, Chief Information Officer at the United Bank for Africa; Stanley Chege, Group Chief Information Officer at Jubilee Insurance in Kenya; and Agrippa Mugwagwa, Executive Director of Retail & Ecommerce at FBC Bank in Zimbabwe. 

The first topic of discussion was the effect of digital transformation on customer communication. Mohamed said that digital technologies such as IoT, robotics and AI etc would result in a convergence between the physical and virtual world and will affect the way we live, work and interact. 

Speaking on the job displacement caused by digitisation and automation, Mohamed said that policymakers need to keep a close eye on this in order to mitigate the short-term job losses that may occur. He also believes that this transformation may also create many jobs, but only for the tech savvy and digitally skilled. This is why it is so important to include skills such as mathematics, engineering, science and technology in school curriculums to better prepare for this eventuality. 

The next topic introduced by Raffensperger was transformation from physical branches to using new-tech and big data. Situ, coming from the bank with the largest physical footprint in the Nigerian market, said that he still sees a place for physical banks, but they need to ensure they are of the right size and in the right place. He added that they are also investigating the repurposing of branches to become sales and advisory centres. Financial inclusion remains top of mind, so it is important to meet customers where they are. Thus, in order to ensure inclusivity, Situ said that they are making the branches themselves a place for a digital experience for customers, with an emphasis on self-service. 

Mugwagwa agreed that physical branches would likely evolve into sales service support centres. He said that, being in a state of migration between the physical and digital, the data is showing a migration from the former to the latter. In response, they are configuring the personnel and skill sets that will be needed to support this. In particular the bank is encouraging the staff to upskill themselves in subjects such as data science and automation, because job creation is unlikely to be as prominent as banks become more efficient and more can be done with less people. 

Raffensperger asked Chege to share how the evolution towards mobile banking is affecting the insurance industry. Chege said that in Kenya in particular, the community is moving more towards digital wallets rather than physical wallets, with services such as MPESA assisting in this transition. Thus, insurance companies and banks have had to adapt to provide convenience, agility and personalisation to the customer. This can only be done by understanding customers’ preferences. Chege emphasised that in order to integrate services and provide frictionless service, it is important to leverage mobile platforms and applications.  

Akosa agreed and said that the pandemic has taught us that proximity is always changing and thus banks need to engineer ways to service customers effectively. Mobile itself is also transforming and the pattern of banking is changing. There are many more services that are running on mobile beyond mobile banking. Akosa emphasised that it is important to provide speed, service and quality to customers and that the only way to do this is to keep innovating on customer engagement platforms. He added that this space is being crashed by fintechs and thus, banks’ third-party partnerships become even more important to maintain. 

Raffensperger then asked the panel how their organisations are approaching the adoption of cloud technologies, be it internal, public or hybrid. Situ said that cloud architecture is integral to his organisation and was driven by agility, cost (return on investment), efficiency and as a driver for AI.  Fathy added that it would also allow more collaboration and reduce working in silos, while providing more efficient data recovery. Mugwagwa said that cloud technology is integral to leverage data effectively, as data is better optimised in a cloud environment.

Thereafter the panel received several intriguing questions from the audience, to which they provided many thought-provoking explanations and answers that left the audience with a new outlook.  

This event provided those within the financial services industry with great insight into the future of innovation within banking and the world of finance that will likely benefit them greatly in the months to come. 

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