• Thursday, May 23, 2024
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AI, digital innovation to shape banking — Survey

Language won’t keep Northern Nigeria away from AI train

Bankers in Africa have said Artificial intelligence (AI) and digital innovation will continue to shape the banking landscape on the continent.

This was disclosed in findings from KPMG’s inaugural Southern African Banking Survey. The survey revealed that the trend reflects the banking sector’s ongoing evolution, which is driven by technological advancements and changing consumer preferences.

According to respondents, growth in the space is primarily driven by opportunities in corporate banking, investment banking, and transaction banking, followed by retail and wealth management. These are enabled by innovation that allows more customers to access banking services through mobile banking.

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In the survey, 38 percent of participants confirmed that between 21 percent and 30 percent of their IT budget was devoted to these priorities. However, 54 percent of survey participants indicated that the primary factor preventing the adoption of AI and digital innovation lay within budgetary constraints.

Also, 50 percent outlined that they had, or intended to, deploy AI technologies to reduce the costs associated with compliance.

“From a South African perspective, South African banks may have ensured resilient growth through turbulent times but maintaining it will hinge on the appropriate adoption of technologies, a continuing commitment towards innovation, and an agile focus on adaptability,” Auguste Claude-Nguetsop, a partner and head of Banking Advisory at KPMG in Southern Africa, said.

Analysis of the survey disclosed that in the past five years, many global banks have exited the African market, while local banks, especially from South Africa, West Africa, and Northern Africa, have expanded significantly. Survey respondents unanimously cited the market’s size as a primary driver for their growth strategies on the continent.

“One need only look at the remarkably quick uptake of mobile payments across Africa and then compare it to the more legacy systems still prevalent in the developed world. AI and digital innovation open further opportunities for financial inclusion, personalisation, and customer service,” said Claude-Nguetsop, added.

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He explained that the African banking landscape is undergoing a metamorphosis, driven by technology, a vibrant fintech scene, and an insatiable demand for convenient and personalised financial services.

“In line with our analysts’ assessments, financial institutions are looking towards combining a ‘build and buy’ strategy to enhance their AI and digital innovation skills and portfolios,” he added.