Amazon-future like awaits banking industry
As Spaniards endured one of Europe’s most stringent pandemic lockdowns, Banco Santander’s digital-only Openbank did roaring business. Its brokerage client base expanded 58 percent in the first four months of the year and trading in shares, ETFs and warrants on its platform more than doubled.
The confinement has made people digital beings “by decree”, says Ezequiel Szafir, Openbank’s CEO. With that trend likely to continue, he sees banks of the future looking increasingly like Amazon. com — online store fronts for financial products in much the same way as the retailer is for consumer goods.
“Amazon took something that’s real, which is retail, and simply made it digital,” Szafir, a former Amazon executive hired in 2015 to oversee Openbank’s new online platform, said in an interview in Madrid. “We’re trying to do the same transformation in banking.”
Bank websites will become more like online marketplaces selling financial products — both their own and those of others
Businesses reviewing post-Covid-19 strategies are finding that online activity — from shopping and gaming to banking and social networking — that was shaking up their worlds even before the pandemic, has flourished. For retail banking, a survey by McKinsey & Co from mid-April found a jump of as much as 20 percent in digital-channel use across Europe. More than one in five customers in Spain and Britain tried online banking for the first time.
That’s giving a new impetus to banks’ online push. They’re looking to speed up plans to move creaking legacy platforms onto the cloud, a slow and often costly process. Some are also building standalone online platforms from scratch or using off-the-shelf solutions designed by fintech companies, which may be faster and cheaper. Hybrid strategy
“Many banking groups are taking a hybrid strategy combining the effort of transforming the original bank and also developing a neobank or, by governments alone. There’s a need to bring the private sector on board. The fourth priority is to promote an enabling environment for private sector participation for on-grid and off-grid generation and allow it to fill a considerable gap in the investment needed for Africa to meet the universal access by 2030. Investment is also needed for transmission lines and distribution networks.
The fifth priority for AFREC is to exploit all available energy resources for the expansion of electricity systems (renewable or non–renewable) so that Africa can diversify the energy mix in power generation, to ensure sustainable development for the sector.
Special attention should be paid to integrating natural gas in electricity generation in Africa, since 40% of new discoveries of natural gas in the world in recent years have been in Africa, mainly in Tanzania, Mozambique, South Africa, Senegal, as well as other parts of the continent.
Last but not least, we need to think about how to establish a regional market for electricity.
The establishment of a regional market for electricity is one of the main drivers of African integration which forms part of the AU’s Agenda 2063. Crossborder trading in electricity will allow the supply of electricity within the region from countries with at least, some speed boats, sometimes in alliance with fintech,” said Francisco Uria, head of Europe, Middle East and Africa financial services, banking and capital markets at KPMG.
Banks globally will spend about US$1-trillion over three years to take more of their operations online, according to an Accenture report. Spending on digital transformation has been led by US banks, with JP Morgan Chase & Co earmarking $11.4-billion/year.
“It’s the only way they’ll remain competitive,” said Antony Jenkins, who was the CEO of Barclays Bank between 2012 and 2015 and is now chairman and founder of 10x Future Technologies. “They’re already under pressure because return on equity is poor. They have to compete with fintech and