Country and financial sector reports prepared by the world bank represent a key source of information on the banking sector in subsaharan african countries. In 20, when we published our first edition of the africa banking industry customer satisfaction survey, our report found that retail customers were most concerned about the financial stability of their banks. In undertaking the research for sustainability banking in to initiate a dialogue around the london principles, with africa, five countries were chosen as focal case studies. Segmentation the report segments banking institutions into three key groupings in the case of kenya, uganda, and rwanda, and four in the case of tanzania. Evaluating banking supervision in africa africa region working paper series no. The structure conduct performance hypothesis would suggest that competition in the sector would therefore be very low. A ca e cc b chief economist complex aeb volume 6 issue 5 2015 outline 1introduction p. Jared osoro, director, kenya bankers association centre for. Simon is an associate director in pwcs banking practice. Here, agents are contracted by a bank bank agents to provide services on their behalf, most importantly cashin and cashout. Helped by reform efforts kasekende 2010, the depth and coverage of financial systemsas measured by all the standard indicators of financial development, such as the ratios of. Banking in subsaharan africa to 2020 the economist. Africa is also the global banking industrys secondmost profitable region. Pdf fast growing economies with limited formal banking services experience greater financial exclusion and transaction curtailment, but mobile.
More generally, an agent is any thirdparty acting on behalf of a financial institution or a non bank institution to deal directly with customers, under contractual agreement. African countries south of the sahara are poised to enjoy a surge in. Digital disruption in the south african banking sector. Selected pan african banking groups, june 2011 20 tbles a table 1. With an 82% mobile account penetration, ssa has the highest penetration of mobile banking across developing markets. African retail bankings next growth frontier mckinsey. Electronic banking, more commonly known as ebanking, is the newest delivery channel for banking services. Although competition is heightening and regulation is tightening, there is still much room to grow. Fast forward to 2016 and the rules of the game have changed. The challenges facing the implementation of agency banking. The first banking institutions were set up in british west africa in the late 19th century. Banking in subsaharan africa european investment bank. Pdf mobile banking in south africa melchizedek theo.
Jeanphilippe stijns and adeline pelletier, with box 1. The south african banking sector is increasingly moving towards a marketplace without boundaries, shaped by the fastapproaching entry of new digital players challenging the status quo and driving unprecedented levels of innovation. Selected panafrican banking groups, june 2011 20 tbles a table 1. The impact of the 4th industrial revolution on the south. Our projected growth for africa banking revenue pools of 8. African banks are well capitalized and overliquid, but lend less to the private sector than banks in nonafrican developing countries. This framework is the digitalfirst platform, supported by four pillars omnichannel banking, smart banking, modular banking and open banking. Today, as it faces new challenges, it has 30 million users in 10 countries and three continents. The most effective way to understand and bring the organization from traditional banking to digital banking is omnichan nel approach. Delivering on financial inclusion, supporting financial. Banking in subsaharan africa 4 nigeria nigeria consolidated its banking system in 2005 from 89 banks to 24. With innovation and expansion on the minds of bank ceos, panafrican strategies are being constructed. That is, if one has not been following economic developments on the continent. Overview the topic of mobile banking is hot in africa kenya, sierra leone, south africa, ghana, nigeria, and all 21 mtn countries are moving deliberately, if not cautiously, to ensure their people are not left out kenyan govt.
Omnichannel is a multichannel approach to customer service where all the channels are tightly integrated. Feb 21, 2017 the mpesa mobile payment system was launched in kenya in 2007. Banking association south africa basa staff will be working remotely during the lockdown. Investec is a strong fifth, but it has a wealthier client base and focuses on both south africa and the uk. North african banks are much deeper, well penetrated, and efficient but they do not generally surpass the subregions in terms of innovation and competitiveness. In africa, the majority of the population has no access to banking services, with only 20% of african families having bank accounts2. As the national association of domestic and international banks. The main allure of africas banking market is that it is potentially vast and virtually untapped. Internet banking or ebanking is an electronic payment system that enables customers of a bank to conduct. The banking sector in subsaharan africa has expanded steadily over the past decade. Customer expectations, technological capabilities, regulatory requirements, demographics and economics are together creating an imperative to change.
Financing infrastructure in africa a landscape of evolution. The mediating role of consumer readiness article pdf available october 2017 with 772 reads how we measure reads. Lack of access is particularly acute in rural areas. Afdb africa economic brief african development bank. Banking penetration among the continents 1 billion inhabitants varies significantly from. From guaranty trust bank ghana, leopold armah, assistant general manager, indicates that the introduction of digital banking has helped to keep the banks on their toes. Fast forward to 2016 and the rules of the game have.
Nedbank doesnt have a real investment banking business, but standard bank and firstrand, through its rmb unit, have solid ib divisions. Financial depth the banking sector in subsaharan africa has expanded steadily over the past decade. Africas retailbanking penetration stands at just 38 percent of gdp, which is half the global average for emerging markets. Standard chartered bank has been operating in africa for more than 150 years and is present in 15 african countries and active in 36 countries across the.
In response, the four universal banks absa, firstrand, nedbank, and standard bank have continued. Banks need to get ahead of these challenges and retool to win in the next era. Simon brinckmann is an associate director with pwc south africa, based in johannesburg. This study on the impact of ebanking on commercial banking operations in cameroon. Africa shall and is actually in the process of innovating large and fast with regard to infrastructure finance. Stop the spread of fake news and stay up to date with official information from the south african government on the covid19 portal at sacoronavirus. Its markets are fast growing and nearly twice as profitable as the global average. Saharan africa remains the region with the greatest potential for the adoption of digital financial services dfs. Subsaharan africa ssa has displayed particular success in addressing these limitations and in the use of mobile money. The challenges facing the implementation of agency banking in kenya a case study of kcb.
Banking in subsaharan africa african business news. The south african banking sector is highly competitive and sharing their. Much has changed across africas banking industry in the past three years. Also banks in africa are well supervised as well as those in other developing countries with competition and entry regulations on par with those in other regions. Powerful forces are reshaping the banking industry. Backed by the londonrun african banking corporation, the bank of british west africa was opened in 1894. The challenges facing the implementation of agency banking in. Sme bankingafrica a unique opportunity for the continent. Jorge camarate is a partner with pwc south africa, based in johannesburg. Each of these four pillars is fundamental to success in the. As it has done in mobile services or is currently doing in banking services, africa could even leapfrog mature markets in this respect. A ca e cc b building today, a better africa tomorrow. In south africa, the drc, zambia and kenya for instance, mobile phone banking is taking services to remote areas where conventional banks have been physically absent.
Pwc retail banking 2020 5 against this background, 70% of global banking executives believe it is very important to form a view of the banking market in 2020 to understand how these global trends are impacting the banking system in order to develop a winning strategy. The banking association south africa basa advances the interests of the industry with its regulators, legislators and stakeholders, to make banking sustainable, profitable and better able contribute to the social and economic development and transformation of the country. Market structure and competition in the south african. Delivering on financial inclusion, supporting financial stability about the report at its fourth edition, this report provides an analysis of recent development in the banking african. For instance, in 2007, only about 30% of household in. Complete the registration form opposite to download your free summary of banking in subsaharan africa to 2020. However, the banking sector in africa is much shallower and less penetrated than those in other major regions of the world. Recent trends and digital financial inclusion about the report at its third edition, this report provides an analysis of recent development in the ssa banking sector. This paper examines the relationship between bank structure, performance and competition in the south african banking industry.
South africa has a very concentrated banking industry with a c4 concentration ratio of over 80%. Africa is hardly the first region one would think of when it comes to private banking. Assessing and strengthening banking supervision is important given the important role of supervision in. This was followed by rapid growth in banking assets in a high oil price environment, which led to a stock market bubble and a sharp increase in nonperforming loans npls. These include south africa s standard bank, which operates in 18 countries in africa. Banking in subsaharan africa international monetary fund. Market structure and competition in the south african banking. Africa, the expansion of major banks african footprint, like standard bank group operating in a number of countries as stanbic bank and barclays africa, and the availability of advanced technology and infrastructure in certain african countries are all shaping the. Last year, the number of highnetworth individuals in africa reached 140,000, according to a capgemini report, a 3. Ecobank, a togobased panafrican bank with businesses in 32 countries.
Mobile banking activity is highest in africa, led by nigeria, south africa and kenya which has the reputation for being the worlds mobile money pacesetter with mpesa. Digital transformation in banking the future of banking. Vows to raise 27% of population with access to formal finance to 65% within decade. African countries south of the sahara are poised to enjoy a surge in growth in their banking systems during this decade. 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. The mpesa mobile payment system was launched in kenya in 2007. Ebanking conceptual framework remote banking, considered representative for the new economy, consists of electronic transactions between customers and their bank. Ebanking services features, challenges and benefits 51 2. Africa, the expansion of major banks african footprint, like standard bank group operating in a number of countries as stanbic bank and barclays africa, and the availability of advanced technology and infrastructure in certain african countries are all shaping the banking industry across africa. West africa and its banking institutions were controlled by the british until 1957. Case study uba bank cameroon sought out to examine the relationship between ebanking services and the profitability of the banking institution and to identify the.
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