Banking in East Africa

In 1996, Global Technology - a Johannesburg Stock Exchange (JSE) listed company supplying software solutions to the banking, insurance and financial services sectors, expanded its focus beyond the Southern Africa region to the continent of Africa north of the Tropic of Capricorn. Today, just five years later, Global Technology is the leading software and services supplier to banks and financial organisations in Africa, and also in Australia.

Global Technology`s success in Africa, includes its software and services, now encompass over 200 sites in Africa, defies and disproves many of the old stereotyped views about Africa`s technology and banking markets. For example: that Africa is largely "unbankable" and not a market ready for consumer services such as Internet banking.

CEO of Global Technology Ray Leonard says while African countries may lag behind their Western counterparts in terms of adoption of banking technology, there is definitely evidence of an African Renaissance in banking. Noticeably post-Y2K, he observes, there has been a potent awakening to the need for new technology. "In particular, technology to enable micro-lending, Internet banking and lending risk management has generated significant interest from a number of African countries in Southern, Northern, East and Central Africa."

Global Technology`s services in Africa include the installation of the world-leading banking system, Temenos`s Globus, selected by the Bank of England, Deutsche Bank and Credit Suisse, amongst hundreds of other banks, for clients such as the Tanzanian Investment Bank and the Industrial Development Bank of Kenya.

Global Technology holds a strategic 20% stake in Temenos, and is the Southern Hemisphere distributor for Globus. In addition to the installation of Globus for retail, private, commercial and central banking in Africa, and Internet banking sites, the group`s services also extend to the International Finance Corporation (IFC) backed, micro-finance system Temenos eMerge.

The group`s subsidiary Fin-X is the operator of the SWIFT Africa Bureau, for the Common Market for Eastern and Southern Africa (COMESA`s) 20 member states. Global Technology marketing director Pat Moffett says that the company`s strong service-oriented ethic has been key in the organisation`s rapid growth in South, East and West Africa. North Africa is a market they are currently looking to expand in.

The group`s proven skills and capabilities as a leader in the banking and financial software and services arena has been a major advantage, as has the company`s ability to provide strong support. This has been done by making sound local support bases and building local skills available to our clients. "It is important to us and our clients to strengthen and grow skills and capabilities locally as this is integral to our service-orientation."

The company also finds a further advantage in the fact that its business costs are South African Rand based. The group emphasises that an understanding of the African environment is crucial and the technology partners need a holistic approach to the provision of software and services solutions to banking and financial communities in Africa.

Leonard says, "African banks need the right technology partners who understand the African environment and can offer a total solution, from consulting and business process re-engineering (BPR) to project management, management information systems (MIS) and training.

"As technology partners one also needs to, at times, define and implement knowledge management strategies, and perhaps, most importantly, it is essential to have strong integration skills to ensure assimilation of any new technology into legacy systems."

Partnering in Africa also means a consultative and information-sharing role needs to be fulfilled by the technology partner who is part of the banking and African business community. "Very often, technology partners have to be able to offer advice on banking policy. You will then create and implement successful banking products and policies for customers."

"This requires not only sound technical know-how and solutions, but also a solid understanding of how these facilitate and manage the complex business issues and processes that govern the banking environment."

"Partnering is an important part of our business ethos. We partner extensively with other information technology companies, in Africa and internationally," says Pat Moffett, marketing director for Global Technology. A partnering agreement with IBM - an alliance that has seen Temenos porting Globus onto the IBM S/390 mainframe - will open new opportunities for Global Technology in some of Africa`s largest financial institutions, who are users of the IBM platform.

Looking in particular at their operations in East Africa, Moffett says that the Industrial Development Bank of Kenya and the Tanzania Investment Bank both chose Globus to meet their needs. The group`s process of installation of Globus in these banks, are excellent examples, he says, of the company`s marketing model in Africa. Global Technology could offer both banks in East Africa the internationally leading and developed Globus system, with the benefits and advantages of African-based installation and localised support. Both clients were impressed with the fast turnaround times of installation - a process entailing the building and customisation of the system in the Globus Implementation Centre (GIC) in South Africa, followed by on-site installation, testing, training and data capture in the clients` environs. The Industrial Development Bank of Kenya`s MD Lawrence Masaviru said: "Much of our funding comes from international agencies and our old system no longer complied with the standards they recommend for the management of loans. This inhibited our ability to obtain funds and invest in the economy. We needed a banking system as opposed to an accounting system. We also required an on-line real time system to be able to process transactions instantaneously for our expansion into commercial banking."

Masaviru commented that the project took only four months to implement and two months for user acceptance, training and data capture. Tanzania Investment Bank Relationship Manager TMF Samkyi commented that their organisation selected GLOBUS "from a number of alternative systems because Global Technology could guarantee to deliver a working system in six months and at an acceptable implementation cost."

Global Technology`s enablement of these initiatives is proof of Africa`s ability to "leapfrog" to new generation technologies, says Moffett. "Africa`s Renaissance revolves a lot around the restoring, rebuilding and renewing of infrastructure: from roads to telecommunications and computer systems. In our sphere of software and services systems, we are, in effect, enabling the "leapfrog" for our clients and partners to the latest, most sophisticated offerings. We do this across the spectrum of our endeavours."

Recently, the organisation launched its first Internet Banking site in Mozambique, in conjunction with the oldest private financial institution in Mozambique, the Banco Standard Totta de Mocambique (BSTM). This Internet banking module interfaces directly with Globus, which was implemented at the BSTM in 1999.

The BSTM`s Joao Machado Raposo, adviser to the BSTM board of directors, commented: "Clients will be able to complete account transfers, access and download statements, order cheque books and make third party payments on-line, all from the privacy of their homes or offices. Global Technology has ensured that stringent on-line security measures have been implemented to protect our clients. BTSM clients can use Internet banking in either English or Portuguese."

Global Technology also recently concluded a deal to install an Internet banking system for the West African bank, Ecobank, which is headquartered in Togo. Ecobank`s operations span 11 countries: Benin, Burkina Faso, Ivory Coast, Ghana, Guinea, Liberia, Mali, Niger, Nigeria and Senegal. In all of these countries Ecobank customers are set to bank on the Internet. The harnessing of the Temenos` microfinancing software solution - eMerge -by international non-profit organisations such as Opportunity International and World Vision, is a development the group sees as unlocking a lot of new opportunities in Africa.

The World Bank`s IFC backed the Global Technology and Temenos initiative. eMerge meets the needs of microfinance organisations, credit unions, small banks and organisations providing consumer credit. Moffett says the reality facing microfinance in Africa and other developing countries is that non-profit organisations will not participate in environments where microfinancing systems are not formalised.

Global Technology realises it is critical to meet the needs of microfinance clients - for efficiency and service - in the same way as the group meets the requirements of "high street banking". Notably, eMerge is upgradeable to Globus - and provides microfinance organisations with an "evergreen" software option that will grow with microfinance organisations as they evolve into larger organisations.

Moreover, the Global Technology`s Africa SWIFT Bureau initiative is complementary to other initiatives in the group. The Bureau meets the need for secure financial communications and straight-through processing between countries, through the provision of SWIFT services at a reduced rate, due to a shared cost model negotiated by Fin-X with SWIFT for countries in the region. Currently, trade between Kenya and Zimbabwe, for instance, is settled once a quarter at the Federal Reserve Bank of New York. The ACE SWIFT service, however, will see direct settlement enabled between countries.

Moffett comments: "An important phase of building financial infrastructure is clearly the ability to access international systems and switch payments between countries. A major issue in Africa is that unless countries participate in the secure payment environment, significant commercial and developmental activity cannot be initiated or sustained."

Overall, Global Technology`s Africa-positive approach and willingness to partner in building business and development initiatives, are major strengths. Over the years of building their enterprise in Africa, the major obstacles Global Technology have encountered have been practical ones - such as work permit processing and travel co-ordination. "As we`ve built our business in Africa, we`ve become more attuned to the requirements that come with organising lots of staff mobility in Africa in many different countries."

Moffett believes that the group is privileged to occupy an important "space and place" in Africa right now. He observes that the famed link between "Cape to Cairo" is unfolding rapidly due to computerisation, electronic networks and financial system infrastructure - more than a 100 years later and in a way than Cecil John Rhodes could not have imagined. Moffett says that Global Technology sees itself as an African business, first and foremost.

"One of the most profound misperceptions that developed from South Africa`s isolation was the displaced view that as people and business players we were somehow more Western in nature than African. Such a perception, wherein one mistakes one`s place and roots in the geography of the world, is not only an incredible misnomer; but if held, a huge perceptual barrier to doing business in Africa."

"We are deeply aware that we are an African enterprise. Our business expansion in Africa is not altruistic. It is about servicing our clients effectively and efficiently and being committed partners in the expansion of opportunities in Africa," concludes Moffett.