Fintech is key to Zimbabwe’s banking digitalisation, Nedbank says

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The Covid-19 pandemic is speeding up the pace of digitalisation of financial services, Nedbank Zimbabwe managing director Sibongile Moyo tells The Africa Report.

“Branch footfall does not justify bricks and mortar,” says Moyo, who took over at the bank on 1 April. “There will definitely be cost savings” from the trend to digitalisation, she adds.

The Covid-19 pandemic initially prompted Nedbank Zimbabwe to close branches and move to minimal staffing levels. This led a tripling of traffic on social media and at contact centres, where customers can get in touch via telephone, e-mail or SMS.

  • Corporate customers, especially those that need to make bulk cash deposits, have had more difficulty adapting, Moyo says.
  • Some of these also have heavy documentation requirements for imports and exports.
  • The bank has made it easier for new retail clients to sign up via mobile phone.
  • Bank cards can’t be mailed out for security reasons, so greater use of agents is being made in supermarkets and workplaces.
  • The bank may extend use of such partners so that basic banking operations can be carried out in a physical setting for those who need one, she explains.

Pleasant surprises and problems

Since taking over, Moyo has been pleasantly surprised by the depth of the bank’s talent pool, the strength of compliance teams and the “clean, strong” balance sheet. “I haven’t had to spend my time fixing things.”

A problem that the bank needed to fix resulted from the arrest of 28 of its tellers in April 2019 on charges of defrauding the bank and its customers by replacing US dollar deposits with local RTGS dollars. The fraud reportedly cost the bank $1.1m.

  • As a result, system controls have been introduced to keep the currencies separate, Moyo says.
  • There are now daily cash reconstructions for the separate currencies.
  • Recruitment procedures for tellers have been tightened and psychometric tests are now used.

Fintech squeeze

There hasn’t been a heavy impact from the pandemic on borrowers. The bank has little exposure to tourism and less than 2% of corporate and retail customers have needed a repayment holiday, Moyo says. She explains this by the bank’s historically conservative lending policies. The bank has been “selective” rather than “aggressive” in its lending, she says.

According to The Promise of Fintech, a report from the IMF in July, Zimbabwe is among countries where mobile payments have largely replaced cash transactions, and progress in financial inclusion is entirely driven by fintech.

Source: The Africa Report