African Banker magazine and banking platform Backbase have released the third edition of their annual report on the ongoing digital banking revolution in Africa, exploring the major trends shaping its future on the continent.
Surveying 153 African banks, the report says that against an adverse macro-economic environment, African banks remain resilient and committed to invest in digitisation to remain relevant in today’s competitive landscape.
Most African banks understand the importance of the key technological shifts – with over 50% of surveyed banks considering it the most important factor for their business. Moreover, 19% of banks considered identify themselves as “digital native”, further stressing the importance of digital transformation going forward.
A second element of the report focused on the key technological trends shaping the future of the banking ecosystem in Africa. Last year 74% of banks surveyed named cybersecurity as one of the most important trends to shape the future of the industry. However, this year, Artificial Intelligence came out on top.
Most importantly, on a continent where banking penetration rates are still below 50%, African banks reaffirmed the importance of driving greater financial inclusion across the whole continent. Roughly 50% of banks surveyed named retail banking as their top priority for 2023/2024, while also referring to mobile wallet apps and digital payment systems as the most critical product development priority for the next two years.
It is widely accepted that digitalisation can solve many of the structural problems that exist in access to finance in Africa and banks still have a huge role to play to spread financial inclusion, including in the B-to-B and B-to-C segments. Which is why it is essential to create an optimal environment to carry out this crucial mission, another pressing issues identified by banks.