September 20, 2022

48 Hours to go for the 4 th Edition of Connected Banking Summit – Innovation and Excellence Awards 2022 Lead Sponsor Microsoft.

How Digital and Modern banking services are changing the financial services sector in Africa
By Phyllis Migwi, Country Manager, Microsoft Kenya

The digital revolution is changing how banking gets done. Every bank is eager to evolve, using secure
and compliant technology to fundamentally reimagine their business. This is innovation with real
impact: changing customer expectations, meeting complex regulations, dealing with new competitors,
combating cyber threats, and inspiring a productive workforce.

Maintaining a competitive edge and differentiation means understanding customer needs and
adapting to market trends while reaching the under-served and the unbanked. The goal for every
financial services organization is to create loyal fans, not just customers, by delivering true value
through personalized experiences.

For financial service organizations, the focus must be on driving and empowering digital
transformation across their organizations end-to-end with a holistic viewpoint, embracing tech
intensity rather than focusing on specific digital products and tools.

Empowering modern banking

There are a number of key trends driving the evolution of the financial services sector. The expanding
power of FinTechs and big tech, along with evolving customer experience expectations are two
important trends, while increased regulation is constraining growth and adding costs. Legacy systems
are impeding innovation and transformation, while the growing threat of cyber crime is a challenge the
industry must tackle head on.
Customers are leveraging digital engagement channels more than ever, and in response, financial
services organisations are seeking to deliver differentiated customer experiences. The rise in
adoption of digital banking products during the pandemic has driven banks to expedite their digital
transformation agendas.

Digital-forward banks are leading the way

FinTechs have had an agile approach to digitalization, and this is now influencing how enterprise
organisations are approaching their digitalisation. Many financial institutions aim to grow responsibly
and deepen their customer relationships by delivering differentiated customer experiences. Digital-
forward banks are leading the way when it comes to investing in digital experienced for offerings such
as lending. Transforming the financial services landscape will help drive economic prosperity
continent-wide and will make financial services more accessible to the under-banked and previously
unbanked.

The pandemic has accelerated digital adoption addressing current needs while balancing for the long
term. Financial services organizations have chosen cloud services to drive digital transformation
because of the ability to speed up deployment, lower complexity and manage upfront investment. The
ability to accelerate innovation to drive down costs is critical to success.

Ecosystem Banking – focus on the experience, not the product

As part of the need for differentiating new experiences, risk management, and compliance, the
financial services industry is seeing the shift towards open and interconnected ecosystems through
modernization of core platforms including payments and core banking systems. Banking and
payments are becoming more open environments than ever before, with customers benefitting from a
huge range of new and useful products.

This is enabled by Banking as a Service (BaaS), which offers an ecosystem in which licensed
financial institutions integrate their banking services directly into the products of non-bank businesses.
Connected BaaS provides the ability to manage an ecosystem of partners from recruitment, licensing,
partnering and referrals.

BaaS built in the Cloud enables security, compliance and governance fully enabled, integrated and
automated seamlessly across the entire services platform. BaaS removes many of the barriers that
businesses previously faced when trying to launch or integrate financial products and unlocks
banking.

A trusted platform is the foundation for running financial services in the cloud, and organizations that
continuously develop to stay at the forefront of technology will become the digital leaders of the future
and maintain their competitive edge.

The FSI industry must adopt stringent compliance and security measures

The industry is experiencing a level of regulatory scrutiny that is unprecedented in its intensity.
Financial institutions that best manage their regulatory and compliance data will be on a path to
stronger risk management and improved operational efficiency. And while financial institutions want
new innovations to deliver better value to customers, they will not make the cut unless they are
operating within appropriate compliance constructs.

To create a safer world empowered by digital transformation, Microsoft adheres to the strictest
security and privacy standards in the industry to in turn enable financial sector to manage its data
footprint and create its own governance. Microsoft’s cybersecurity strategy utilises massive amounts
of machine learning, data analytics to detect and respond to anomalous behaviour from inside and
outside the organisation.

Choosing the right technology partner in this process of digitalisation is crucial

Organisations in the financial services sector are innovating to complete their digitisation through
platform modernisation, digital client engagement and digital employee enablement.

Financial institutions need a mature provider of financial service platforms to enable a modern
banking ecosystem with a focus on reducing end-to-end and capital expenditure while leveraging
technology. These institutions benefit from having a partner who will provide them with industry
advisory, digital advisory and who will partner with them in the process of moving from being a legacy
traditional financial services organisation to one that is digitally focused.

At Microsoft, understanding the financial services industry’s needs and objectives is very important to
us. We want to ensure that every organization has the digital capability required to succeed going
forward and are committed to helping our financial services customers improve time to value, reduce
costs, increase agility, and accelerate innovation for sustainable growth.

For more information email [email protected] or call +44 20 3808 8625
To register or nominate www.connected-banking.com

Jack Evans

About the author

I became a crypto asset owner in 2014, when the industry was in its infancy. Before that, I was working in the classic US and European stock markets. Since then, I have gained extensive experience in both cryptocurrency investing and day trading. I am happy to share with readers my experience with crypto exchanges, DeFi and NFT instruments. 

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