Bank Gaborone leverages on digital transformation
Botswana’s banking sector is to a large extent, profitable for most of the players. However, it is certainly not for the faint hearted. For the past 16 years that Bank Gaborone has been in existence, at least three banks have closed shop as a result of market forces and other challenges. One is a specialist bank and the other being retail banks. The challenges appear to be even worse for new players.
Bank Gaborone Managing Director, Sybrand Coetzee, who was appointed to head the bank close to 8 years ago, is well aware of the challenges that start- up bank faces, and he is content that they have built a strong foundation that enabled them to survive the multi- billion sector. “Firstly, when we started operating, we had to convince customers that we are here to stay. As you know, some of the challenges that new entrants in the banking industry experience is lack of capital compared to established peers. Once you open doors for business, customers come mostly looking for funding rather than savings ( deposits). If the need for financing and deposit is not managed correctly, it can turn out to be disastrous for new players,” said Coetzee, adding that the lender has managed to build a strong base of investors, stakeholders and customers who have made the bank what it is today.
This Monday afternoon, Botswana Guardian conducted an hour- long interview with Coetzee, in which he elaborated further on their strategic plans, which to a large extent, have been modified to ensure they deal with the challenges associated with the COVID - 19 pandemic. The bank is on its second year of a three year strategic plan which focusses on relevant products and services, digital transformation and service excellence. His eyes lighten up when he talks about the bank’s superior service.
“At Gaborone, we don’t bank money, we bank people,” the Namibian born, Coetzee said at their plush offices located within the busy Central Business District. “It is our distinct customer service which has differentiated us from the rest of others over the years.”
As uncertainty around COVID- 19 continues to linger on, the bank is also reviewing its customer value proposition especially on Small Medium Enterprises. Like others in the market, the bank has also launched customer deposit taking machines which have drastically reduced walk- in clients who wish to access the service. Bank Gaborone, which is part of Namibian Stock Exchange Capricorn group, will continue to ensure processes and procedures are automated and centred around customers’ needs. COVID- 19 has surely altered the way banking is done. For most, the pandemic has brought devastating impact. For businesses, such as banks, the impact, which has not limited itself to bottom line, has meant new tactics have to be put in place to ensure business sustainability and profitability.
Coetzee opined that they have long foreseen the way banking is conducted ( mostly through face- to- face interactions) will change, but COVID 19 has only accelerated the pace towards transformation.
“In the midst of all these challenges, we had to introspect, scan the business top to bottom, and implement business strategies and initiatives to help us improve,” said Coetzee, who has a Master’s in Business Leadership from the University of South Africa. In a bid to protect their staff, the bank has decongested its operations, which basically means there are some people working remotely to avoid rise on COVID- 19 case. This is in addition to online meetings.
“Personally, I have always felt face to face meetings are impactful. However, in this current situation, we have to adopt or die,” he said adding that, the pandemic has surely revolutionized the way banking is done.
Bank Gaborone, through secured banking platforms, has allowed customers to do more banking remotely. Electronic channels for both personal and business banking divisions have been enhanced, to ensure they are up to speed with the increased demand for online banking. Recently, the bank, which has twelve branches, launched first of its kind, Card to Card solutions, which allows Bank Gaborone customers to send money instantly to card holders of any bank within Botswana. The platform is set to be a hit with customers. In the coming months and years, existing and prospective customers of the bank, will see more digital banking platforms launched to improve convenience. However, this does not in any way mean the bank will not invest on brick- and- mortar branches. “Look, we need to make banking accessible. We will continue to expand our branch network. However, the model might change in favour of smaller branches and formation of strategic partnerships which will deliver quality banking services to our clients,“he disclosed. The bank has 12 branches around the country. This is in addition to 20 automated teller machines which include 9 deposit taking ATMs. The banking sector in the country is highly competitive, and Bank Gaborone has to deal with head on. The sector is expected to see more entrants in the next few years, with Botswana Building Society Limited having been granted a provisional banking license and Botswana Savings Bank having announced plans to commercialise in less than 3 years.
So what is Bank Gaborone doing to ensure it stands tall, despite increasing competition, which also comes in the form of financial services providers and mobile money market?
“Like I said, all the banks offer more or less of the same services and products. So, to stand out, we are constantly improving our customer experience.” Furthermore, the unlisted bank continues to expand point of sale devices, upgraded front and back- ends core and banking digital channels as well as investing in a state- of- the- art data centre, which is being run from head office, CBD. In fact, the Bank Gaborone Managing Director has disclosed that, under the Go Beyond Strategy, the parent company will invest as much as N$ 700 million on key infrastructure for Botswana and Namibian subsidiaries. Some of these funds will be used for application management, security and crime protection, capacity and throughput, among others. All these investments will ensure the bank’s operations are stable, agile and effective.
Human capital is often referred to as the most critical asset the company can have. “As we transform, we need an up to task human capital. We cannot deliver our Go Beyond strategy without them. We continue to train our staff members in skills that they lack. We also hire talent that we don’t have internally,” Coetzee said, adding that they have plus or minus 300 strong workforce. The bank has an annual training and development budget. A Digital Academy, which offers an array of online courses has been launched. The bank has a partnership with University of Stellenbosch Business School, where managers are enrolled on management development programmes. This is in addition to being in partnership with Botswana Institute of Banking and Finance to upskill employees on related courses.
Most of the banks that control the domestic sector are subsidiaries of South African banks, with others playing in the continent. So as a subsidiary of Capricorn, what kind of support are they getting?
“We benefit greatly from our membership to the group as their expertise help us to create a larger, better capitalized and more diversified bank with access to various stakeholder groupings,“he added. In particular, the group also assists in risk management, technology, governance and capital.
“I need to emphasize that the group also allows us to do our own things independently,”
The past few years, banks have battled with record low interest rate, which has affected interest linked products and services, and ultimately bottom line. The bank rate has moved from double digits rates of 2018 to 3.75 percent as of end of March. Last month, the central bank’s policy committee raised the yield on the main monetary operations instrument by 51 basis points to 1.65percent. This has led to commercial banks increasing bank rate to as much as 5.76 percent
In a bid to deal with record low interest rates, the bank has moved swiftly to implement a proactive and effective assets and liability re- pricing strategy, innovative fee pricing, strong focus on essential spending and close monitoring of asset quality.
Botswana government is on a crusade to empower citizens owned companies. Equally, government has called upon the private sector to help citizens. Bank Gaborone has not been left behind. It has launched citizen economic empowerment programmes with mining giants Debswana, Morupule Coal Mine and United Nations Development Programme. The company is planning to expand this initiative to add more citizen empowerment deals. Under the Debswana and Morupule Coal mine, Bank Gaborone has committed up to P300 million to fund citizen owned companies that do jobs with the above mines.
“At the heart of these initiatives is citizen owned companies. We believe that Batswana can achieve sustainable transformation by empowering Batswana owned businesses, capacitating them with financial assistance and mentoring,” said Coetzee.
As a responsible corporate operating in Botswana, the lender has strong Corporate Social Investment programmes. Coetzee told Botswana Guardian they are more than ready to assist government on its quest to attain Vision 2036 pillars. “Sustainability is at the core of our business policy and being connectors of positive change is an integral part of our culture,“he stated.
The bank works with Diabetes Association Botswana on an initiative which aims to raise cancer awareness as well as necessary support. Since 2015, over P500 000 has been raised for this project by the bank and its partners. The bank has also sponsored over 30 doctors, nurses and support crew under the Journey of Hope Botswana programme. Bank Gaborone also has an Adopt a School Programme. Bank Gaborone has announced major plans which will need capital to execute. Coetzee said the bank is in a position to fund them. If the need arises, tapping into the market for more cash, especially through the parent company is also an option.
Capricorn group, which owns Bank Gaborone, has medium term note programme at the Botswana Stock Exchange.
Some of the Bank Gaborone peers are listed on the stock exchange. Any plans of listing? “Bank Gaborone has ambitious growth plans; however, we do not have any immediate plans on the local bourse,” said Coetzee.