Ghana: The Evolution of Digital Banking in Ghana

Sep 05, 2017 | Business Day Ghana; All Africa

Digital or electronic banking (e-banking) is believed to be providing an efficient and more reliable platform for banks and their customers to transact business with ease.

Though benefits of digital banking in developed countries are numerous, the system is still evolving for developing countries. This is because many developing countries lag behind in the adoption of e-banking. In the case of Ghana, electronic banking is gradually becoming acceptable to all. People are using the digital platforms to purchase goods and services and transact businesses. Research has shown that the adoption of e-banking was a business strategy taken by banks in response to customer needs and changing market trends in the banking industry. Business Day has learnt through interactions with some leading banks in the country that the pace of digital banking penetration has been encouraging but there are persisting challenges that must be addressed. Solomon Adu Atefoe, Head of Ebusiness and Card Services at Agricultural Development Bank (ADB), disclosed that illiteracy is a key challenge that is affecting digital banking in Ghana. According to him, in a country where the population still has almost a quarter of adults (15 years and above) being illiterate, a significant number of people are not familiar with most of the apps for banking on their phones. "For instance, when you want to text, you need to type in a short code, you still need to navigate an app. So for most people, I need to go a step further to root them into the local dilate for them to do. This happens especially when their phones are not instant voice response (IVR) paced," he stressed. Adu Atefoe added that there are lots of scepticism in the banking sector. For him, people are saying that digital banking is very complicating. "Even sometimes, bankers themselves, when you get to them and you want them to sign in on any of the digital platforms, they say me I don't do anything e-banking. So it's like that kind of scepticism is there and I think is based on the kind of culture that we were brought up with. "Some are pretty laid back and they don't do anything. They are much more like the laggard market. They don't embrace new things readily unless it becomes a tradition so they will like to see a teller. And sometimes the customer behaviour is very weird." Adu Atefoe believes that people need to change their psyche. Our psyche are wired differently especially when it comes to this part of our world. "I was shocked especially when I rolled out quick alert. That is one of our digital service five years back, I was surprised because I thought people at the down south... right from Kumasi down to Accra and the westerners. And can you imagine it was rather the northerners that were making the movements. The way the northerners are able to embrace the platforms as compared to even those perceived to be elites, it's pretty weird," he asserted. The Head of Ebusiness also mentioned security as another major challenge facing electronic banking. He believes that irrespective of the good system the banks have, sometimes there can be fraud cases here and there. "Though security is also a major issue, the uptake is gradual." He described digital banking in the country as great platform that allows the banks to reach the unbanked and the under-banked. "It helps you to create much more loyalty with existing customers because you always try to keep customers in the ecosystems of the bank. If the customer will be using money to do certain things, you will like to keep it in the system." ADB has close to 400,000 - that is about 40 per cent of the customer base - on the alert platform as compared to internet banking which is just 3,000. With mobile banking, ADB has almost 70,000 on the USSD whiles the app platform, which was just re-launched, is now hitting 4,000. Read more on All Africa. Source: All Africa