COMESA has committed to upgrading the region’s banking capabilities as an essential platform for cross-border trade and investment.
But progress has been stilted to date, with a large number of local banks remaining backward in their service delivery.
In an effort to accelerate progress, the COMESA Secretariat has scheduled a session for regional bankers at the AITEC Banking & Mobile Money COMESA Conference in Nairobi from 2 to 3 March.
It will be chaired by Frank Mugyeni, currently assigned to the COMESA Secretariat by the UN International Trade Centre, to create a COMESA Bankers Association.
Sindiso Ngwenya, Secretary-General of COMESA, who is attending the conference – which is being billed as a core technology meeting for the region – has said the conference will be an opportunity for dialogue between the region’s banks on the best practices for quick and efficient financial transactions.
According to international data, just 12 of Kenya’s 49 banking institutions have achieved the COMESA base target of registering for full SWIFT membership to send and receive international transfers directly and securely.
The technology lag is even greater in other COMESA countries, with just five SWIFT members in Uganda, according to the most recent data from the Society for Worldwide Interbank Financial Telecommunication.
“It has surprised us all how slow the technology uptake has been in banking outside of the few star players,” says Lauren Bosch, sales director of Internet Solutions, a Platinum Sponsor of the conference.
“Many of the region’s banks are still operating on manual systems. Others have hand-built their own internal information platforms as a way of getting there more cheaply.
“As banks now face the challenge of creating strong internal information systems, and connecting to clearing and transfer systems, they are even being hampered by their internal decision-making processes.
"The IT decisions of the larger international banks are driven by IT Directors with clear international compliance specifications. But in East Africa, banks are trying to work out individually what they want and need to achieve minimum level of sophistication in handling information.”
“The big theme this year in the wider banking sector will be ways of cutting costs to compete,” says Bernard Matthewman, CEO of Paynet Group, another platinum sponsor. “The point is that banks are going to have to forge new partnerships to stay abreast.”
In an official statement on its role as a supporting organisation for the event, a COMESA spokesperson says: “COMESA has an Action Plan for Financial System Development and Stability, which is endorsed by the COMESA Council of Ministers.
"The implementation of the Action Plan is crucial for banking integration in the COMESA region. To implement the Action Plan, there is need to promote and strengthen links between banks in the sub-region, and provide a forum for exchange of information on banking practices in the sub-region.
"This requires the re-establishment of the COMESA Bankers Association. The Association can contribute in building capacity through education and seminars, promote an efficient payment system and also contribute for the creation of a zone of macro-economic and financial stability.”