While banking may be considered a `given` for the higher income group, the vast majority of Africa`s population remains unbanked. It is this market that NamITech Financial Services is seeking innovative ways to reach.
"While the South African banking sector is moving ahead and embracing new ideas and technologies, the rest of Africa is less sophisticated," says Chris Steyn, managing director of NamITech Financial Services. "There are still a limited number of ATMs in Africa. Nigeria, with a population of 120 million, has only a handful while this technology has hitherto only been deployed in a few countries such as Zimbabwe, Kenya, Zambia and, more recently, Tanzania."
Steyn attributes this to the fact that societies in Africa are predominately cash-driven, but believes there is no reason why new technology cannot be introduced there.
"As emerging economies such as Nigeria, DRC, Angola and Uganda develop, there will be a strong drive towards ATM deployment." Steyn anticipates that this will result in steady growth in debit and ATM card usage, particularly as the drive into Africa by the major SA-based banks such as Standard and Absa accelerates, and multi-national banks like Barclays and Standard Chartered increase their footprints on the continent.
"While magstripe technology has provided cardholders with convenience and dependability at point of sale for nearly three decades, escalating fraud is finally leading to the emergence of smart card technology in the banking industry," says Steyn.
"Our local banks face enormous challenges in having to reduce costs yet also find ways to service the large unbanked sector of our population and are actively exploring alternative channels for delivering their services to a broader section of the population. This presents significant opportunities for a company such as ours," explains Steyn.
"We are constantly working to enhance our offerings to the financial institutions, including developing applications around products such as smart cards, mobile payment technologies and self-service kiosks. We also have extensive experience in authentication technologies such as biometrics and digital certificates and as a global affiliate of VeriSign, can offer a broad range of secure technologies to back up the applications."
The challenge is to improve, and to find, alternative delivery channels. Right now there are only about 8 000 ATMs installed nationwide, compared with 13 million cellphone users. "It doesn`t take much to realise that banking via cellphones would have a far wider customer reach than via the existing branch and ATM network. With technologies such as 3G on the horizon, mobile banking is no longer a pipedream, and the retail banks and telcos are seriously exploring ways to deploy this technology.
"But initially it is possible that the next technological wave could include interactive kiosks which can offer far more functionality than the current ATMs and take us to the next level of convenience banking.
"Using the latest technology, the banking industry through the rest of Africa would be able to leap-frog into the digital economy," continues Steyn. "What service and solutions providers like NamITech must do is ensure that they follow the banks as they move into the rest of Africa, ensuring that platforms exist to supply value-added services, using such enabling technologies such as smart cards and biometrics."