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Ameyo Callversations

Mobile Banking, AI and Chatbots : Banking Infrastructure in Africa Embraces The Tech Revolution


In my earlier blog, I had highlighted the changing landscape of the banking ecosystem in Africa. With the onslaught of technology, stability of financial institutions and awareness, customers in Africa now demand superior CX (Customer Experience) from their banks. This is a very natural and organic transaction that is driving banks to adopt emerging technologies to achieve seamless banking experience. For the same reasons, it is not surprising that the key points of discussion at the recently concluded DOT finance summit in Rwanda was around the adoption of mobile banking, AI, chatbots and its overall impact on customer experience and risk management.

Currently, the financial service providers in Africa are jostling with two very distinct situations. On  one hand, there are millions of people who still don't have access to any kind of formal banking system. And on the other, there is a growing number of tech savvy African customers who demand very sophisticated and unmitigated banking service.

Mobile Banking - An Answer to Reach the Unbanked 

Having access to a formal banking setup will not only allow people to manage their finances better, it will also encourage them to save and secure themselves from the uncertainties of the future. Although, in the last decade, millions have come under the banking fold, there are million others who are still unbanked, especially those from the poorer regions of the continent.

“According to Mckinsey and Company, at least 326 million people on the African continent do not have access to formal or semi-formal form of financial service.”

This infrastructure deficit has lead to the emergence of microfinancing services. Mobile connectivity in Africa is growing at a very fast rate. In countries like Nigeria, Kenya, Egypt, Uganda and South Africa, maximum web traffic is registered from the mobile devices.

“In Nigeria, one of the countries with the biggest number of internet users worldwide, 81 percent of web traffic was generated via smartphones and only 16 percent via PC devices”. - statistia.com

Despite of Nigerians fondness for mobile internet and social media, banks in the country have failed to capitalize on the trend. This is evident from the fact that only 42% of Nigerians use online banking services. But, at the same time, mobile phone based money transfer services like M-pesa has become a popular medium of withdrawing and transferring money in countries like Kenya and Tanzania.

However, experts believe that mobile wallets like M-pesa only solves a partial problem. It cannot be treated as a progressive financial system because often payments between two service provider is restricted and cross-border transfer of money is still a hassle.

Mobile banking is the answer to the digital gap. Setting up traditional banks in the remotest part of the continent is costly and logistically difficult. Therefore, banks have to be more forthright in adopting mobile banking for ease and pleasant banking experience. At the same time people need to have access to safe and reliable way to handle money.

Bankbots or Chabots - The Future of Customer Service 

With smartphone penetration, social media use in Africa is all time high. According to the Forbes report, there are a total of 170 African users on Facebook, making it the most popular social media platform in the region. Given this trend, Chabot technology has immense scope in the banking infrastructure of the continent.

In 2016, Barclays Africa introduced the first AI enabled chatbot to facilitate two-way communication with the customer as opposed to traditional medium of communication such as email or text. Most recently, United Bank of Africa started using Facebook bot to interact with the customer. In a fast moving world, customers demand quick service and transaction.

All mundane tasks such as balance inquiry, bank account details, loan queries etc. can be handled by the bot efficiently. Customer service executives will have time for more complex issues leading to overall positive banking experience. In fact chatbots are going to save banks billions of dollars in the coming decade. As per Juniper research, “chabot conversations to deliver $8 billion in cost savings by 2022.

Even though the scope of chabot in the African banking set-up is promising, there are hurdles in the way. One of the biggest challenge is not all corners of the continent receive high speed internet. Secondly, there is a divide with respect to internet education in different parts of Africa.

However, there is a rise of new age customers who are informed and tech savvy and to meet their need and expectation, chabot is indeed the future of customer service for the banking sector.

Role of AI in Risk Management - Business Advantage for Early Adopters

Artificial intelligence is disrupting businesses all across the world and is widely incorporated in baking systems, especially in the domain of risk management. According to Deloitte, “ artificial intelligence is the game changer for risk management”.

In the recent past, banks and financial service providers have heavily invested in risk management. This change has emerged due to factors like global financial crisis, risk reporting and data compliance requirements.

AI technologies namely NLP, machine learning and data analytics will be used on large pool of data to identify both known and unknown risks. Machine learning will train computer applications to identify risk factors from unstructured data, especially in cases associated with fraud detection.

Early adopters of AI technologies in risk management will have a competitive advantage. It will improve an organization's performance and help build trust amongst its customers.

Concluding Thoughts - Africa is Ready for Technology

Fintech is not only expected to improve banking processes but will also have a rippling effect on customer experience. Gone are the days, when bank only relied on sale and scale of the bank as defining factor for growth. Today, pleasant and positive customer experience is the core agenda of every bank and financial service provider. It is the key differentiator of service between providers.

Adoption of technology is the sole solution for automating some of the core processes of the banks. As banking customers in Africa become more aware and conscious, financial institutions must embrace the new technologies.


Topics: customer experience trends