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5 Tips for Designing African Digital Banking Experiences for Young & Old

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As mobile internet connectivity grows, African youth are fast embracing the opportunity to connect, converse and transact on the web.

According to the GSMA (Mobile Economy Report 2015), mobile internet penetration in Sub-Saharan Africa was expected to reach 38% by 2020.

This has largely been driven by lower costs of smartphones, which the GSMA says have decreased by 20% since 2008.

A rapidly growing local app market and easy access to games and social media have captivated the youth market.

Although the Millennials generation is a Western construct, African youth (18 to 34) – particularly the urban youth – are displaying similar online behaviour patterns to their counterparts in developed countries.

And, while the older generations may accuse them of being driven by a need for instant gratification, the youth’s expectation of simple, fast and always-on service is shifting how organisations design their offerings.

Banks, meanwhile, have built their credibility by portraying themselves as the bastions of the economy, institutions designed to protect your money, with caution built into their organisational DNA.

While this is important, of course, it isn’t something that necessarily attracts their fastest growing potential customer base.

Here are five pointers to help African banks attract and retain customers, no matter what their age, and to ensure they are preparing for future generational expectations. 

1. Prepare to be compared
At the very outset, it’s important for banking institutions to understand that the younger generations are swiftly getting used to having information at their fingertips.
Research published by Pew Research Centre (2015 Global Attitudes Survey) shows that African youth are jumping at the opportunity to engage online.
In Tanzania, those aged between 18 and 34 are 17% more connected to the internet than their elders. This climbs to a significant 31% in both Nigeria and Kenya.
The research also shows that the connected youth are active on social media on a daily basis.
Social media is being used to ask questions and to make comparisons based on experience. Price comparison websites are also making it easier to make informed decisions.
This significantly changes the dynamic of how the youth choose products and interact with brands. It is obvious then, that banks will need to change the way they engage with the younger generation.  Designing for a frictionless experience must be priority.

2. Just make it work
User experience becomes a key issue when servicing customers across generations.
Based on their engagement with global sites, the connected youth have an expectation that everything must work immediately, offer real value, in a seamless experience.
While the younger generations have a better understanding of technology, continued literacy challenges and multiple regional dialect demographics adds complexity to the user interface served up by financial institutions.
Complex security terms such as phishing and pharming can cause mistrust of the service. In many instances, this lack of understanding may lead to customers avoiding digital channels altogether, which in turn drives up the cost of delivery for the banks.
Making use of technology that appears exceptionally simple to the user takes away the fear factor.
When it comes to authentication, banks must guarantee their customers’ protection against phishing and other digital fraud vectors without the costly and clumsy use of one-time passwords.
These may give the appearance of good security, but they are less effective and overly complicated, particularly for those accessing services on their phones.
Removing complexities at the very outset of the transaction resonates with both the older and younger generations.

3. No one reads anymore
No generational cohort reads lengthy warnings or instructions.
People will click through to the end of an instalment or process without actually being fully aware of the details – or this may again increase their mistrust of the service.
Moreover, in our experience, when an organisation uses text-heavy instructions, abandonment rates shoot up. When communicating instructions, the “keep it simple” rule reigns supreme.

4. Markets are not the same
Companies also need to understand that new markets work very differently.
What may have worked in Botswana, may not be obvious to those in Kenya.
People use and engage with technology, language and each other differently in every market. This includes generational quirks.
Banks will need to tweak their user engagement depending on where they are operating.
Working with partners who have experience in a region allows a bank to learn from their experiences, which can save time and costly mistakes.

5. Innovating for future generations
We see a lot written about banks becoming simple transaction pipes. To avoid this, they must adapt in order to provide better value for their customers.  This can be achieved in three ways:
A simple user authentication, which has excellent security, is a great way to build trust with customers.
Once this is in place, you can confidently open up your channels and add new services.
Banks can then begin leveraging their merchant network in order to start on-selling their products to their customers – essentially becoming an aggregated merchant platform. By nurturing trust, banks are able to capitalise on a captive customer base and bring to bear vast economies of scale.
The complexities of catering across borders and language barriers and for different generations with different user expectations are enormous. However, if banks invest in technologies that are simple, seamless and flexible, they can not only ensure all age groups form trusting, lasting relationships with them, but also take an important step towards building new revenue opportunities for the future.

Dewald Nolte
Co-founder and VP Business Development at Entersekt
Dewald Nolte helped establish Entersekt in 2008, and later took up the position of VP of Business Development for the company.
Having identified an urgent need for innovative new approaches to securing digital transactions and other sensitive data, he and his fellow co-founders set out to build a business that is dedicated to providing transaction authentication using digital certificate technology deployed to mobile phones.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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