admintechnology revolution sweeping across the globe that is redefining the way business is done.
But there are strong fears the dynamics of technology may weigh on the profitability of banks that will fail to reconfigure to maintain relevance as well as derive value from banking in its traditional form.
Examples of the cyber revolution products that will transform the way banking is carried out include CABS’ Textacash and Interfin’s Cybercash, which operate on Telecel Zimbabwe’s new mobile money transfer platform.
The system allows for transfer, receipt, depositing, withdrawal, inter- and intra-bank cash transfers among institutions connected to the ZimSwitch network. This has brought convenience and faster realtime transacting.
People can also now make bill payments and purchase airtime using their cellphones from the comfort of their homes or from their workplaces. Today’s world is busier and people need all the convenience they can get.
The cellphone has become an indispensable aspect of people’s lives as a gadget that has widespread functionality outside communication.
People can make several transactions from their phones without necessarily having to go to the bank physically, a feat that was not even imaginable a few years ago.
This is certainly spine chilling and ominous for banks if regarded from the view that sooner than later people will not need to use the banks the same way they are doing now because they will simply use cellphones to transact.
Mobile banking could be the platform for rapid financial inclusion even of people in remote and rural areas that now only need mobile phones to access a certain range of essential financial services they never used to get.
TN Financial Holdings chief executive Mr Tawanda Nyambirai admitted banks were likely to suffer from legacy issues if they fail to reconfigure in line with the winds of technological revolution permeating the globe.
Mr Nyambirai, whose listed group operates a bank as its flagship unit, said banks were bound to lose out in this revolution where the consumer has emerged the biggest winner in terms of convenience and cost of transacting.
“Mobile banking is largely a win for the customer than the bank. Banks traditionally had expensive distribution channels established in anticipation huge volumes of people would go there to transact,” said Mr Nyambirai.
While the volume of people using physical banking halls may be decreasing, if banks fail to restructure and maintain their present administrative structures they would retain costs yet realise reduced revenues.
Since mobile banking appears to affect potential revenue as the transacting public may in certain instances bypass traditional banking channels, Mr Nyambirai said failing to embrace technology might render banks irrelevant.
“What is important is whether banks are ready to walk the talk. The question is do they realise the implications this is going to have on their operations and have they done enough to embrace it?” said Mr Nyambirai.
But Interfin head of marketing Mr Palmer Mugavha had a different perspective.
He said banks would not lose all of the income they are realising from traditional banking system, as transfers are made from bank accounts.
“I do not see it (mobile banking) having a downside because whatever cost we have in banking halls to due to
large volumes of clients will no longer be there as we will
not need a lot of people to do serve them,” said Mr Mugavha.
He said banks would still realise incomes from fees and commissions levied on their clients’ bank accounts each time a transaction is executed. He said most transactions would have their origination from a bank account. Analysts further contend that mobile banking is more suited to people in the informal sector that can not have bank accounts for various reasons.
They said those who carry out big value transactions such as corporates would maintain banking in its traditional format as it has a better audit trail.
However, the bottom line remains mobile banking will in a way certainly affect volumes of bank transactions as mobile phone operators move into domains that previously were the preserve of banking institutions.
For instance, Econet Wireless Zimbabwe’s Eco-Cash allows money transfers without having to use bank accounts, but it uses the cellphone and registered dealers where recipients of cash would go to deposit or redeem cash.
Online Reporter