How digital transformation is changing the banking industry in Tanzania.

Oct 23, 2020

By Anna Chinyoyo, Program Associate.

On Thursday, 8th October 2019, Smart Lab hosted the fourth episode of the Corporate Unwind series. It was an online event with a discussion around 'How digital transformation is changing the banking industry in Tanzania.' The growing need for digital transformation is becoming an essential strategy for the Tanzanian bank's business objectives.

Our speakers for this series were very influential leaders in the banking industry of Tanzania. We had Kevin Wingfield, the Chief Executive Officer of Stanbic Bank Tanzania, and the Chief of Technology and Digital Transformation at NMB Bank PLC, Pete Novat. The conversation had addressed how digital transformation shapes banks' products or services and why; and what the future will be like for all businesses in Tanzania. 


"Digitization is critical in driving financial inclusion in Africa."

"It doesn't matter where you go in the world of digital transformation is important in ensuring financial inclusion." -Kevin Wingfield. Africa is a great example where traditional banks have focused on a very narrow market segment. It's best driven by access and cost; these have been the two drivers around lack of financial inclusion. There are other things like education, regulations, and all of those things, but we can control it mostly through access and cost. "What has changed and driven financial inclusion is primarily mobile technology; it transformed people's access to financial services." - Kevin Wingfield. According to the Bank Of Tanzania annual report that came up last year, there has been a significant increase in access to financial services from 65% to 86%. With this report, the CEO stated that this is a very high number, but there is still a lot to be done. As traditional financial services providers, most banks are taking traditional products and are offering them through digital channels. However, according to Kevin, "But we need to take it to our customers and know their needs to apply digitization in providing financial services.


"Should we keep calling it the banking industry or move it to the digital finance industry?"

"When you talk about the digital transformation, we can not leave out banks and mobile financial services; I do not know if we should keep calling ourselves the banking industry or move to the digital finance industry" - Mr. Pete Novat. Banks need to refer to technologies that drive digital channels and platforms. Financial service providers can start using artificial intelligence and machine learning technologies that seem complicated in providing banking services. Mobile is big; for example, there's a unique way of transforming the industry using USSD technology in Tanzania. It started with only mobile services but then extended to banks and more industries. For sometime Africa has been behind with internet banking. However, there has been an improvement; "Corporate is leading the way by advocating internet banking because most of them use it in their companies. There is plenty of technology to leverage on when it comes to financial services". explained Pete Novat 

"To be relevant going forward banks need to get involved with the digital transformation"

"If we are going to be relevant going forward, we need to get involved with digital transformation. This is much bigger than just technology that we will involve in our products; it goes with the culture and way of life of our customers," explained Kevin Wingfield. It's how banks can get much closer to their customers. Kelvin went on by explaining that, "It goes back to a deeper understanding of our customers to ensure that we provide the best financial services. Regulators will come onboard to ensure that we achieve financial inclusion after we have done this". Customers now are shopping, socializing, and engaging differently compared to 5 years ago; in this case, banks need to match where customers are now. They need to understand what the customer needs and deliver that.


Both leaders explained that as much as digital advancement is critical in the banking industry's growth, it has its dangers. The event ended with a question and answers session where attendees could interact with our speakers for the day. We hope to keep hosting insightful events that will transform the Tanzanian ecosystem and foster technological advancement.


Learn more about corporate Unwind.


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