West Africa International Banking Convention 2016

Cultivating innovation to stay ahead of industry disruptors

In West Africa, a growing middle class and an expanding small and medium enterprise (SME) sector augur bright prospects for the retail banking sector. In the financial services industry, retail banking offers the greatest opportunity in the region. The middle class now is requiring more sophisticated products, providing banks opportunities to deepen customer wallet share through product bundling and existing relationships. The SME segment is rapidly expanding as SMEs transition into corporates; hence, banks can benefit from higher returns in this segment to help drive noninterest revenue. The Central Bank of Nigeria has limited the amount of commission charged to customers, this coupled with falling yields from the bond market as resulted in tightening of liquidity.

Pressures on margins remain high as banks struggle to meet AML, KYC and FATCA compliance issues. Accordingly, banks further enhanced their risk management functions, systems and processes to meet regulatory and market demands, in order to overcome the complex environment that risk managers are facing today. Convergence among enterprisewide adoption is the key to harmonizing the existing policies between the banks existing business lines and the risk and compliance management.

At the industry level, as banks look to capture the growing middle class at the same time access the unbanked population, risk management will remain in an important element. Pressures on margins remain high as banks struggle to meet anti-money laundering, know-your-customer, and Foreign Account Tax Compliance Actcompliance issues. Accordingly, banks should enhance their risk management functions, systems, and processes to meet regulatory and market demands. At the enterprise level, convergence is the key to harmonising existing policies between a bank’s existing business lines, and risk and compliance management.

For emerging markets, infrastructure plays an important role in banks’ technology decisions. West Africa is no different. West African banks are looking for technology solutions that enable them to have the same kind of service across all channels,particularly mobile banking. Banks lag behind on payments and collection as telecommunication companies are quickly becoming more prominent payment platform providers across Africa. New competition is also foreseen from brands like Paypal, Paga, Ali Baba, Amazon, and ApplePay,who are the new game changers.