IT has 'key role` in African banking

By Iain Scott, ITWeb group consulting editor

Johannesburg, 29 May 2006

Technology will have an important role in improving Africa`s banking sector, according to speakers at Terrapinn`s African Banking Congress in Sandton last week.

Juma Dalmas Menya, payment systems development specialist at Consolidated Bank of Kenya, told delegates that Africa was also being affected by the global shift towards e-money and a cashless society.

New automated payment and settlement systems such as real-time gross settlement were making their mark in different parts of the continent.

There were signs of progress in Africa.

Last year, he told delegates, Kenya launched the Kenya Electronic Payment and Settlement, which allowed banks and customers to pay and receive large payments electronically on a real-time basis.

"In SA, the value of electronic payments between 1989 and 2003 rose from 2.8% to 61.4%," Menya said.

Payment systems had become increasingly important in addressing the twin issues of security and efficiency, and central banks and financial institutions, as well as private operators, should take a greater interest in payment systems to ensure speed, risk management, reliability and global standards.

Improving investment

Peter Hinton, CEO of Botswana-based Enterprise Banking Group, said applied technology offered a huge opportunity for improving investment in Africa`s banking sector.

He was presenting a paper on improving profitability and investment in the banking sector.

Hinton said technology - particularly wireless and mobile - was one of the areas that offered the opportunity for investment in the sector.

"SA has made huge strides in technology that can be beneficial for the whole continent and increase investment," he said.

Other areas of focus included the regulatory environment. "Why does it take two days to set up a business in New Zealand and 276 days in Nigeria?" he asked.

It was also in the interest of banks to lobby for the elimination of exchange controls, for more attractive tax regimes, and privatisation, among other things.

Several other speakers addressed the role of cellphone banking in Africa, technology`s contribution to customer relationship management, and predictions of future trends in technology that would have an impact on the banking sector.