The Governor of the Central Bank of Kenya, Dr. Patrick Ngugi Njoroge, has urged players in Uganda’s banking sector to invest in technologies that will ensure closeness to their customers.
Delivering a keynote address at the Uganda Annual Bankers’ Conference on Tuesday, 27 July 2021, Dr Njoroge said banks must focus on strong governance, especially at the board level focusing on public good and profitability if they are to navigate in the era of the fourth industrial revolution.
“On the whole, there are four (4) main effects that the Fourth Industrial Revolution has on business namely; customer expectations, product/services enhancements, collaborative innovation, and organizational structures and its people,” he said.
“Banks that have succeeded [or that are succeeding] are those that have been close to their customer…The notion of completion in the sector is a zero-sum game. Digitalization has been a silver lining in this pandemic. It has enabled access to not just financial services but also other essential services such as health and education,” he added.
His Ugandan counterpart, Professor Emmanuel Tumusiime-Mutebile, urged players in the banking sector to draw broader investment strategies instead of focusing on short term profits.
“We as the banking sector should avoid short term profit strategies but rather adopt long term strategies that do not compromise our services to our clients. We must all do the right thing to not only survive but also thrive in this new revolution,” Mutebile said.
He noted that bankers can utilize the available opportunity brought by the COVID-19 pandemic to transform the sector.
Such opportunities, he said, include adopting new innovations and technologies like; online banking, mobile banking, contactless ATMs among others.
“The digital revolution has offered opportunities for financial inclusion and offering of financial services to people regardless of income or location. Customers are able to transact in a seamless and timely manner,” he said.
“The dynamism of Fintechs presents regulatory challenges. How can we encourage financial innovation without compromising the security of people in the financial space,” he added.
Mathias Katamba, the chairperson of Uganda Bankers Association, who also doubles as the Chairman Board of Directors at Dfcu, highlighted the disruptive nature of the fourth industrial revolution and the contribution it has made in propelling financial services to move at the high speed of mobile and the internet.
He said that digitization has impacted economic growth through inclusive finance, enabling the unbanked to enter formality through retail electronic payments platforms, virtual savings and credit supply technological platforms.
Anne Juuko, the Chief Executive Officer of Stanbic Bank, added that being able to provide affordable banking to everybody is a challenge in our generation.
“The 4th industrial revolution is something that is changing all the facets of life. In the financial sector, we now have the opportunity to use these new emerging technologies to include everyone,” she said.
“The regulatory framework is not set up enough to allow collaborations. We cannot say the cost of financial intermediation must come down and we are not allowing it [with our current regulations],” she added
Dr. Tumubweine Twinemanzi, the Executive Director in charge of bank supervision at the Bank of Uganda, said: “As regulators, we should admit that technology will always run far ahead of regulation. We should not be tempted to regulate technology but rather focus our activities and policies on the products and services they offer.”
Shehryar Ali, Country Manager for Mastercard, emphasized the need for financial inclusion.
“SMEs are a very important part of the economy and we must take them along wherever we go as the banking sector. Any innovation is not sustainable if it does not cater for social and financial inclusion,” he said.
The two-day annual bankers conference ended on Tuesday.