Technology plays an invaluable role in extending banks` reach to small and medium enterprises (SMEs), but it remains only an enabler, not a panacea.
This was one of the conclusions reached at the BMI-TechKnowledge/International Data Corporation African banking forum in Midrand at the end of last week.
The theme of the two-day forum was "Reaching the SME and Underbanked: Africa`s Hidden Gems".
Speakers spoke on various issues around banking and SMEs. Some common threads included the potential value in banking SMEs, as well as the extensive challenges faced by banks in embracing that sector of the population.
A key thread was the role that IT plays in helping banks extend their reach to the SME sector and in overcoming the manifold challenges.
Summing up at the close of the conference, BMI-T director Mark Walker said a lot of research around the topic was available and there was a lot of talk around SMEs and banking, but much of the information was disparate.
The aim of the forum was to integrate the information and highlight the major themes.
He said one of the issues that emerged was the need to be aware of banks` dilemma - the opportunities in the SME market against the challenges faced in transacting with it. A major challenge lies in the fact that the sector presents banks with low volumes and high risk levels.
Banks also have to deal with external influences such as regulatory issues, questions around the maturity of the market, who owns the social responsibility aspect, and other practicalities. User expectations also have to be considered.
In the midst of all this, technology could be only an enabler, not a panacea, he told delegates.
One of the key needs was collaboration between different technology suppliers, between banks and technology suppliers, and between banks and the market.
Among other things, there was a strong need for listening to the market. There was also the need to delineate the responsibilities of banks, government and other players, as well as a need for public-private partnerships.
Walker called for the establishment of a forum that includes SMEs, banks and technology players where issues could be discussed and points of commonality reached.
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