Navigating turbulent waves of the new norm

THE Banks and Banking Survey (BBS) spoke to this years’ awards sponsor, FCB chief finance officer Taitos Mukuku (TM, pictured) to understand key trends in the banking sector. Below are the excerpts of the interview:

BBS: e banking sector has been going through changes in terms of the normal day-today running of the business. What can you say have been the key life-changing experiences that the sector had to go through over the years?

TM: Over the years the financial sector has indeed undergone various changes. Macroeconomic factors such as the hyperinflationary environment, disruption by non-traditional players and currency and policy changes have influenced a culture of agility industrywide due to their prerequisite timelines that require prompt execution.

We have also moved from customary banking that was face-to-face orientated to digitisation as our customer needs have evolved to align with global trends.

To remain relevant the banking experience has been redefined by leveraging through available technologies. A culture of moral good within our communities of operation has become mandatory through Corporate Social Responsibility as each organisation follows the triple base view approach which has promoted overall sustainable development in the financial sector.

BBS: Covid-19 was one of the unexpected occurrences in 2020. What’s your comment on the general performance of the sector during the pandemic?

TM: Covid-19 pandemic was a circumstance that no one could have predicted. In many ways it redirected and fast-tracked the financial sector to the new-normal operational expectations that the market has come to expect as a minimum standard.

During the pandemic, banks took the lead in facilitating and supporting all essential services that were operational during the lockdown. Minimal disruptions to service were experienced as banks stood ready to support clients after they invoked their Business Resumption Plans as part of the frontliners and essential services framework.

At the beginning of the lockdown overall revenue figures went down due to customers being at home and enterprises operating within the confines of the set guidelines. As the lockdown moved from stage to stage, expanding the parameters of operations by opening more industries and sectors, the situation took a turn.

Banks reopened to ensure clients had access to their funds and began re-engagement of correspondent banks and other key partners to reignite trade. Due to changes in consumer behaviour, there was an upsurge of digital channels penetration as the demand for cash became less with customers opting for digital products. is culminated in positive half-year results for most players in the financial sector signaling a sense of stability in the market.

BBS: In relation to First Capital Bank what can you say is your future post-Covid-19?

TM: e global pandemic has called for an evolution in the way we do business and has

created a legacy across the industry. Having actually experienced the pandemic we have learnt how to adequately prepare for a crisis of this nature through our Business Continuity Management.

Going forward our bank would like to increase our stakeholder digital adoption through increased remote access facilities in line with global trends. Banking should be at the palm of everyone’s hand and we want to be a leader in that journey as we create shareholder value.

With the increase in online, digital and e-commerce platforms, cybersecurity on all platforms is paramount to safeguard customers’ money.

rough the above, we need to also look at unlocking new product capabilities to address market gaps. We have already begun to implement some of the above and have recently launched strategic partnerships with Ria Money Transfer Services and Zimnat to avail a suite of relevant, cost-effective services that are key to our customers.

BBS: Banks have also embraced digitisation, what can you say about First Capital Bank on this front?

TM: As a business, we have been working steadily towards this goal as our aim is to be a cash-light bank that exists at the palm of the hand, meaning we provide convenience through relevant digital innovation.

Our first step was our milestone major system overhaul with over 60 systems being re-engineered.

At the beginning of the year we went through a system stabilisation phase as we began to unpack the digital capabilities of our system.

At the back of this milestone we are now unpacking the optimal capability of the system.

BBS: What has been your most exciting innovation in 2020 that you are proud of?

TM: We have been working tirelessly on piloting an innovative cutting-edge bulk payment system for our corporate client segment.

It has many unique attributes such as a readyan-audit trail, distinctive security features and so on. We have currently rolled it out on a trial basis and are very excited about the feedback we have received so far. We are working flat out to provide a truly tailored product.

BBS: What is your comment on capital markets in Zimbabwe in relation to banking?

TM: e capital markets in Zimbabwe are on a steady positive growth trajectory with new initiatives such as the Victoria Fall Stock Exchange.

As foreign currency becomes available, we see a lot of traction with bonds and other long-term investments. is will present numerous opportunities for banks to participate in this value chain and create shareholder value.

BBS: Banks have been experiencing high costs and lack of access to new credit lines as the economic landscape has been unfavourable. In such times what advice can you give to banks to stay afloat?

TM: We need to go back to basics and realign the strategy with the current new normal whilst constantly watching our cost lines. ere is a marked appetite for investment in the country . As organisations we need to search for new income streams . Service excellence remains at the core.

BBS: Banks have also been working on strengthening their balance sheets and value preservation. How have you been doing concerning that?

TM: Our current macro-economic operational conditions make this exercise increasingly important to remain profitable. At First Capital, we have managed to maintain a solid and stable balance sheet through various strategies such as maintaining a prudent risk lending model to minimise impairment losses.