Banks need to adapt to a changing business environment in Africa.
Africa’s growth prospects
There is no doubt that there are significant opportunities in Africa, not only in the banking sector, but in many other sectors. While the banking sector has experienced a slight slowdown in other global markets, in Africa this has not been the case. According to a recent report by McKinsey, the banking sector in Africa is expected to experience strong growth over the next five years. In fact, it’s almost twice as profitable as the world average. In terms of retail banking, retail banking revenues in Africa were $ 35 billion in 2017 and, according to McKinsey, are expected to grow by 8.5% annually to $ 53 billion in 2022 .
By introducing both digitization and technological innovations into the economies, we are seeing more and more companies compete with new segments with the gradual application of risk analysis. There is also increased use of non-bank data for analyzing customer behavior and responsiveness in examining credit extensions over a given period.
With the current digital transformation on the continent, this is the ideal opportunity for large investors to launch several end-to-end digital banks. Platforms that allow customers to run all banking activities from a mobile device. These already existing services on the continent, improve the customer integration journey and can extend to several other African markets.Certes the challenges may be huge, but in today’s digital world, it is essential to collaborate with different partners and forming alliances to provide customers with a convenient, high-quality customer experience tailored to a rapidly changing market.
Africa: a hotbed of innovation
According to a recent McKinsey report, more than 40% of African bank users prefer to use digital channels for their financial needs. This is not a surprise and is indicative of the digital shift we are witnessing in sub-Saharan Africa.
The African banking sector has been described as a “hotbed of innovation”. As Africa begins to enter an exciting era of digitalisation, innovation will play a key role in unleashing the future potential of the banking sector.
Keywords: Africa, News, Economy, Digital, Banking, Innovation
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