Will financial services industry cope?
Enacy Mapakame
THE country’s financial services sector has often been an early adopter of digital technology, starting with the machines in the early 1990s to recent online and mobile banking.
However, there are fears that the local industry could be left out of multi-billion-dollar technology market if they fail to leverage on the new 5G network in their digitisation drive to increase efficiency, promote financial inclusion and prevent fraud.
A recent report by multinational advisory and tax services firm, PwC, estimates that the use of 5G in financial services will bring
billion to the industry by 2030. Global Renaissance Investments chief executive officer, Mr Ngoni Dzirutwe, said as the mobile sector rolls out 5G in 2022, banks and insurance firms have to prepare by developing their 5G strategies to compete with their fintech rivals. Otherwise they risk falling behind in the digital economy.
“The speed increase brought about by 5G networks will enable financial institutions to perform more complex processes much more quickly, minimising waiting times for things such as verification for new customer on boarding and loan tracking,” he said.
Listed mobile network provider Econet Wireless, made history last month when it became the first company in Zimbabwe to roll out 5G service, which is poised to help banks and other finance companies deliver the new, innovative mobile services consumers want.
Mr Dzirutwe noted that the introduction of 5G means there will be better performance of existing bank apps and websites.
“Despite the renewed push for digital because of the Covid-19 pandemic, many mobile banking apps still lag behind when it comes to functionality. Frequent complaints include the slow speed of mobile apps and the frequency of crashing or timing out. 5G will enable banks to clean up these inconveniences and help them provide a more seamless customer experience,” he added.
Several banks in Zimbabwe, including Standard Chartered, Steward Bank, Stanbic,
and among others, are on a digitisation drive that has resulted in transaction efficiencies, cost cutting and a significant improvement in customer service.
Mr Dzirutwe said 5G will also help further the Government’s financial inclusion agenda by taking banking services to remote and rural locations.
“Despite decades of sustained efforts by governments across the world, a large chunk of the global population remains unbanked. However, 5G powered pop-up branches or mobile banking will result in the majority of people living in rural and marginalised areas have access to banking and insurance services,” he said.
Market analysts also believe that 5G will provide faster and simpler payment options, which will make mobile and digital payments even more appealing to the masses and merchants alike, further boosting usage. This is key to economic growth.
“The outbreak of Covid-19 led to an increase in digital payments by consumers, as it offered a contactless form of transaction and unparalleled convenience during the lockdown period. As a result, commerce especially e-commerce experienced the boost of a lifetime. This is a market where financial institutions can play a key role in expanding the market with the help of 5G,” said Mr Philemon Mare, a financial analyst with a South African merchant bank.
“Another major advantage of 5G will be its ability for banks to improve proactive fraud prevention and take informed decisions in real time. Processing data, verifying the nature of transactions, confirming transaction amounts and funds availability, consulting multiple data instances in real time, coupled with customer geolocation and merchant will reduce fraud detection errors and false positives, thereby protecting consumers and the bank’s bottom line,”he said.
According to PwC, losses from financial frauds will be reduced by over billion by 2030 thanks to the 5G security measures.
International trends have also shown that in addition to 5G, the ongoing growth in mobile phone penetration will pave the way for a bigger and more sophisticated digital payments market.
E-wallet services will enable mobile payments from a single account, empowering consumers as well as merchants and agents.
Meanwhile, Global Renaissance Investments will next month host its annual conference and awards at Meikles Hotel in Harare where experts are going to unpack the future of 5G and how industry and several sectors of the economy can adapt to the new technological trends.
Some of the expected speakers are Econet chief operations officer Kezito Makuni, Cloud Nhau, a digital executive with
Bank, Shuvai Mugadza, Zimbabwe country manager, Postal and Courier Services Minister Dr Jenfan Muswere and Loice Ngulube an executive with