Of all the industries in the economy at present, the financial sector can be argued to be one whose IT environment will undergo the most extensive changes this year.
Not only has the sector altered its business model with a single view of the client becoming its "Holy Grail", but it is also under pressure to comply with regulatory frameworks such as the Financial Intelligence Centre Act (FICA), The Financial Services Empowerment Charter and the Basel II Accord.
The charter stipulates that banks must provide banking facilities within a 20km radius of every individual by 2009 - banking the un-banked, as it were. The rule of thumb for the success of this endeavour, says Andy Brauer, chief technology executive at Business Connexion`s Networks Competency, is simple solutions.
For instance, rural areas do not have the infrastructure (fixed lines) to enable traditional means of providing ATMs. Therefore, banks have opted to provide these by using technologies such as satellite or transmitting data over mobile networks.
Using satellite in conjunction with cellular networks is possibly the best route to go. "It is horses for courses, really. Where there is no cellular coverage, satellite should be and will be used. These technologies are normally used in parallel - to back each other up."
A number of banks have recently stated their intentions to use satellite and cellular networks respectively as part of their campaigns to service underserviced areas.
At the front end, smart ATMs and innovative kiosks coupled with education can be used as the first wave in addressing the challenge of getting people to deal with a bank instead of stashing money under their mattresses!
Audio and video could also be used as a way of effectively educating the masses on using various technologies. "Telephone banking has been used for years and it can also be used by the un-banked going forward. Simple solutions such as these should not be ruled out," says Brauer.
One of the greatest challenges faced by the sector is providing the un-banked with an incentive to join a financial institution. "In a lot of ways technology is not the issue. This is easily available. It is the incentive for the un-banked that needs to be addressed," he adds.
"If institutions are considering the Internet as a means of getting more people to bank, then community Internet sites will have to be set up similar to those that can be found in Cape Town," says Brauer. The feasibility of using a tax incentive to build such centres will have to be investigated. Rural areas have traditionally been subsidised by urban centres; to effect such a change, other means of funding will have to be found.
A trend in reaching the un-banked in Africa is interfacing cellular networks with the Internet. Africa is a mobile continent so it is no wonder that this is the way that the sector is reaching its target audience.
Although both satellite and mobile are excellent ways of reaching the masses, where money is concerned, security has to be of paramount importance especially in the mobile arena, comments Brauer. As GSM networks evolve into 3G and then 4G, the risk increases. These are surmountable although complex.
Convergence where it refers to banks integrating various systems and convergence implying cost reduction, should be two strategies clearly outlined in any institution`s plans, he comments.
The bottom line is that, as with any technological investment, it must make business sense. With such a large portion of the economy needing to be banked, the technology that accompanies any attempt at resolving this challenge has to be viable. A practical way would be for the banks to get together and share the risks and problems. In this way a converged rural Ubuntu bank would mean that each bank would be represented by the Ubuntu bank in all the underserviced areas.
Share
Editorial contacts