Editor’s Note:
This engaging piece features Absa Bank Kenya’s head of consumer banking who emphasizes that financial organizations need to be alert regarding how they deliver their services to clients. According to his viewpoint, those times have passed where customers cared only about basic quality. Providing superior customer service is now crucial. This change has been driven by an increasingly finance-savvy public, swift advancements in digitization, and heightened expectations fueled by smooth interactions within other sectors.
In contemporary banking, mere compliance with standards is not enough anymore. “Plain vanilla products”—the standard, universal solutions that were once prevalent in finance—are becoming obsolete fast. This shift reflects how customers at every level—from beginners to high-net-worth individuals and tech-savvy millennials—now expect more: greater value, increased customization, and deeper significance from their financial services.
We find ourselves at the crossroads of three significant trends: an increasingly finance-savvy populace, swift digital advancements, and heightened expectations fueled by smooth interactions in various sectors. These overlapping forces are reshaping the core definition of banking and being part of the financial system.
The count of selective customers has increased. As highlighted in the 2023 Deloitte Global Banking Outlook, 72% of consumers currently demand highly personalized services from their banks, including instant advice customized according to individual financial preferences. Across Africa, as per GSMA data, over 350 million individuals utilize mobile money platforms beyond simple transactions; they also employ these tools for saving, borrowing, and investing purposes. Nearby, within Kenya, the adoption of digital technology stands at more than 73%, particularly concerning mobile wallets. Moreover, traditional banking applications have transformed from basic necessities into indispensable resources.
This change in behavior isn’t limited to one specific group. Since money is deeply personal, an individual’s relationship with it can undergo significant changes throughout their life due to various elements such as health and familial duties. For the average person who handles day-to-day bank transactions, being well-informed and valuing convenience and swiftness remains constant even as they grow older. High-net-worth clients look for exclusive offerings yet still prioritize sustainability and the social impact of investments. Meanwhile, younger consumers entering the market prefer digitally focused options that emphasize communal awareness; these individuals typically expect financial institutions to align with both their identities and ambitions.
A standard savings account, a basic transactional loan, or an unchanging app interface are now inadequate; value has become the new form of currency.
Value, not just volume
The most prosperous banks of tomorrow won’t be defined by having the biggest network of branches or the fattest balance sheets; rather, they’ll be distinguished by their ability to generate significant, heartfelt, and useful benefits for their clients.
For example, Absa Bank has been reconsidering the significance of banking in the daily lives of our clients. Our approach isn’t solely centered around providing financial services; instead, we emphasize comprehending our clients’ urgent requirements and addressing those needs directly. This could be seen through tools such as Timiza, which provides essential financial assistance during critical times, or the Infinite Card, designed to help individuals sync their monetary affairs with both their aspirations and day-to-day routines. The emphasis lies in ensuring relevancy—crafting solutions that resonate with the actual experiences, dreams, and obstacles faced by the communities we cater to.
For instance, bancassurance is no longer considered secondary. Clearly, clients prioritize security equally with financial gains. When integrated effectively, insurance offers this reassurance precisely when needed, smoothly and assuredly.
Creating inclusivity, not merely innovation
As we rush to embrace innovation, let us not overlook the importance of inclusivity. Technology has the potential to level the playing field, but this requires thoughtful implementation. The gig economy serves as a case in point. As per Mastercard’s 2024 Middle East and Africa (MEA) report, gig workers make up almost 20% of the urban informal sector in East Africa. However, numerous individuals still find themselves excluded from traditional credit mechanisms. Modern financial services should cater to such scenarios through innovative approaches like alternate credit assessment methods, adaptable product offerings, and scalable platforms tailored to meet individual needs over time.
Simply digitalizing the lending process isn’t sufficient. We need to reimagine the concept of credit altogether. For instance, what support does a working mother who sells goods online require to achieve financial stability? How should investments be conceptualized for a young Nairobi-based professional juggling multiple responsibilities like rental payments, entrepreneurial ventures, and dreams of international travel? Addressing these queries demands practical solutions from contemporary banking rather than mere catchphrases.
At the core of everything lies trust. Trust isn’t formed merely by adhering to rules or providing excellent service; rather, it stems from empathetic actions and consistent presence, particularly during critical times. While people might not recall every detail, they clearly remember the way you made them feel when they required assistance.
In today’s fiercely competitive landscape, trust subtly distinguishes one brand from another. This element turns services into relationships and customers into partners.
In this modern era, financial institutions have a distinct mission: cease promoting products and begin addressing issues. Shift from acting as mere service providers to becoming lifelong allies. Develop tools rather than simply executing transactions. Craft solutions for actual scenarios, not solely for idealized boardroom profiles.
Welcome to the era of modern banking, which transcends mere technological advancements and emphasizes profound comprehension along with the audacity to react pertinently. Ultimately, contemporary consumers do not seek enhanced banking services; rather, they desire greater value. This shared vision for our collective future is something we should construct collaboratively.
Moses Muthui, who serves as the Consumer Banking Director at Absa Bank Kenya, is the author of this piece.
The opinions stated in this piece belong exclusively to the writer and do not represent the editorial stance of .co.ke.
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