‘ Banking sector committed to improving financial services’
IN the past year, the banking sector has gone through a number of challenges mainly worsened by policy changes among other issues. This has contributed to the already dwindling confidence in the sector. This week senior business reporter Melody Chikono (MC) spoke to the Bankers Association of Zimbabwe president Ralph Watungwa (RW, pictured) about the challenges the sector has faced and what the future holds. Below are experts of the interview:
MC: The banking sector has been going through a number of challenges which have been worsened by the emergence of Covid-19. What do you think is the best way that banks can reimage banking into the future?
RW: I must say that the banking industry has been tested in unprecedented ways by the Covid-19 pandemic. Customers, quite rightly, demanded service delivered seamlessly from their banker’s right from the start of the lockdown. Banks have been working tirelessly to make life easier for the banking public by providing essential services during the lockdown period, albeit struggling in the first few days and weeks but improving significantly over a short period of time. Most banks had to invest time and money towards capabilities to provide services digitally. The result of this investment has seen all banks able to provide virtual platforms to serve their customers who are now able to transact from anywhere at any time. This has enabled the sector to comply with World Health Organisation guidelines of combating the spread of the virus through social distancing.
The safety of our staff was and still is a priority. We have ensured that all staff have adequate Personal Protective Equipment to calmly and safely deliver essential services.
The sector has also gone beyond the call of duty by making donations towards the Covid-19 response. To date, our collective industry donations exceed US$400 000. This is true testament that the banking industry values its stakeholders and the communities in which it operates, having operated in Zimbabwe since 1892.This highlights our commitment to improving accessibility to financial services for our customers.
MC: What is your comment on the crackdown on Mobile Network Operators in terms of reduced limits and its effect on banking confidence?
RW: This is an issue that has been raised by banks over the years as poor management of financial flow attracts significant risks that became apparent in 2020 and may have contributed to greylisting of the Zimbabwe financial systems by FATF and the EU. The benefits of this recent change are there for all to see. Stability has returned to the financial market and the economy at large. Through enhanced Customer Due Diligence which banks are equipped to manage, the sector can identify financial malpractices and report them to the authorities.
MC: Government also ordered mobile money transactions to be incorporated in the Zimswitch platform. To what extent will this enhance service delivery and how prepared are banks in terms of interoperability?
RW: Use of recognised/official switches does improve transparency and monitoring of financial transactions. The Banking Sector is happy that this arrangement has been put in place as this is one way of creating a clear line of sight for every stakeholder in the process. We have been assured that the platforms availed by Zimswitch are highly interoperable and can accommodate the various core and peripheral systems that banks and other players use. You will be aware that all banks have been using the Zimswitch since its inception and we were instrumental in its formation.
MC: The country has gone through a series of policy changes especially in relation to currency. This has led people to lose confidence in the banking sector. What’s your comment on this and to what extent have you been affected?
RW: While we believe that frequent policy changes have contributed to low confidence levels, it is important to note that there are many other issues from many stakeholders that have affected confidence levels. We are happy to note that there is better collaboration between the banking sector and its stakeholders, especially with other business associations and regulators which should foster stability and in the medium to long term. It is, however, important to note that this is a long journey that will take a long time to achieve acceptable confidence levels. The Banking sector is playing its part as we are aware that our services are an integral part of any sustainable recovery process. We are aware that there will be times when we must take a few steps backwards to move forward sustainably as a country.
MC: What has been the effect of regulations on banks charges in regard to industry profitability digitalisation and branch closures?
RW: We continue to work with our supervisors and customers to achieve the best outcomes for our shareholders and customers. The sector, like all businesses has been working tirelessly on ways to reduce operating costs in a hyperinflationary environment. The digitisation initiative has been and will continue to be a key enabler to delivery of cost-effect services to our valued customers.
MC: In your view do you find the bank charges are sustainable both to the bank and to the customers?
RW: We continue to work with our supervisors and customers to achieve the best outcomes for our shareholders and customers.
MC: Government gave civil servants US$75 each to increase their buying power. What is the position of banks now in terms of allowing them to swipe from their Nostro accounts? What are the sticking points here?
RW: The teething issues that came with the introduction of the allowances have since been addressed or have been overtaken by events.
MC: What can you say about the outlook of the banking sector in Zimbabwe?
RW: The banking sector is optimistic about the future and keen to be part of the recovery of this economy, no matter how long it takes. The sector is committed to its customers. The sector is also playing its part to ensure that economic fundamentals are stable, which includes exchange rates, inflation and working to achieve a strong, transparent and “best in class” financial sector and committed to working with stakeholders to achieve Vision 2030