40% of African bank customers prefer digital channels transactions — Report

Some 40 percent of African banking customers surveyed prefer to use digital channels for transactions, roughly the same share as those who prefer branches, a report has shown.

The report also indicates that in four of the continent’s major banking markets, the share of customers who prefer digital channels is significantly higher than the share preferring the branch channel, according to a 2018 report by McKinsey & Company on Growth and Innovation in African Retail Banking.

It said banks can adopt one of four distinct digital strategies: The first is to digitally transform their existing operations, to increase their share of digital sales and transactions to beyond 60 to 70 percent on each measure, as Kenya-based Equity Bank has done.

The second is, banks can partner with telcos or fintechs to deliver mobile financial services to their clients at a cost below that of the branch network. An example, also from Kenya, is M- Shwari, the mobile-based loans application formed in partnership between Commercial Bank of Africa and Safaricom.

The third digital strategy is to build a digital bank from scratch as Nigeria’s Wema Bank did in launching ALAT, Africa’s first fully digital bank, in 2017.