Digitalization of financial services: Challenges remain in Africa (FinAfrique)

Feb 23, 2021 | Ecofin Agency

African countries need to make more efforts to achieve the digitalization process of financial services according to a finding by FinAfrique, a financial sector analysis firm focused on Africa.

A survey conducted by the firm on 289 banks and 225 insurance companies in 21 African countries showed that almost all these companies have websites and offer online services. However, the next stage of digitization, which is customer relationship management is performing poorly in the countries studied.

In the banking segment, although some operations can now be done using a mobile phone, opening an account online or making bank deposits remains a challenge. Unlike the banking sector, the insurance industry is still lagging. Few companies make it possible to manage an insurance contract online, and even fewer make it possible to have an insurance quote online until the contract is concluded.

The FinAfrique report comes at a time when digitalization is being sung as a lever for growth for the continent. Before 2020, the trend towards digitalization of financial services was supported in Africa by a desire to expand the customer base of financial companies. But this ambition was not backed by a real strategy, which gathers all the sector players. Thus, the implementation of an ecosystem of digitalized financial services has been achieved through individual approaches with mixed success.

With the rise in mobile money transactions in Africa, banks and insurance companies in the countries surveyed have yet to go beyond the digital world. This implies investing in digital service strategies, focusing on customer satisfaction than a willingness to just conform to a global trend.

Source: Ecofin Agency