What the future holds for retail banking in Africa

The retail banking landscape in Africa is on the brink of a monumental shift as leaders in the industry come together to address the issue of financial inclusivity on the continent. The Retail Banking Council, comprised of senior retail bankers, recently convened in Nairobi under the theme 'Building for the Last Mile' to discuss the future of retail banking in Africa. Patrick Akinwuntan, Chair of the Council's Advisory Board and Group Executive for Consumer Banking at Ecobank Group, shed light on the challenges and opportunities facing the retail banking sector in Africa during a recent interview with CNBC Africa. Retail banking plays a crucial role in providing financial services to the average individual in an economy. With over 1.2 billion people in Africa, the percentage of the population that is banked remains below 40%. Akinwuntan emphasized that access to financial assets is a fundamental right that can empower individuals to create wealth, secure a better future, and participate in the global economy. The advent of technology, particularly the widespread use of mobile phones, presents an opportunity to bridge the gap and bring banking services to every household in Africa. One of the key challenges facing the retail banking sector is the financial inclusion of women, who remain disproportionately unbanked across the continent. Akinwuntan highlighted the importance of gender equality in access to financial services and noted that the high level of mobile penetration in Africa presents a promising avenue for reaching untapped customer segments. Countries like Kenya have already made significant strides in mobile banking, with mobile wallets outnumbering traditional bank accounts, indicating the vast potential for expansion in the industry. Digitization has emerged as a pivotal tool in enhancing financial inclusivity, with banks investing heavily to digitize their systems and meet the evolving needs of customers, especially those at the base of the pyramid. Improved identification processes, such as biometrics and SIM card registration, have simplified the account opening process, allowing individuals to access banking services through their mobile phones in a matter of minutes. This shift towards digital banking has the potential to bring the unbanked, including artisans, tailors, hairdressers, and farmers, into the formal financial system, thereby boosting economic growth and stability in Africa. As the retail banking sector in Africa looks towards the future, collaboration, innovation, and advocacy will be key drivers of success. Partnerships with FinTech companies, telcos, and regulatory bodies are essential to driving financial inclusion and expanding access to banking services. While there are still challenges to overcome, Akinwuntan expressed optimism about the progress being made and the positive response from regulators to support the growth of retail banking in Africa. The path to a more inclusive and prosperous financial future for all Africans lies in embracing digitization, fostering partnerships, and leveraging technology to connect the continent to a brighter tomorrow.