The Evolution of Digital Banking in Ghana

By Ernest KISSIEDU

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.

Though benefits of digital banking in developed countries are numerous, the system is still evolving for developing countries. This is because many developing countries lag behind in the adoption of e-banking.

In the case of Ghana, electronic banking is gradually becoming acceptable to all. People are using the digital platforms to purchase goods and services and transact businesses.

Research has shown that the adoption of e-banking was a business strategy taken by banks in response to customer needs and changing market trends in the banking industry.

Business Day has learnt through interactions with some leading banks in the country that the pace of digital banking penetration has been encouraging but there are persisting challenges that must be addressed.

Solomon Adu Atefoe, Head of Ebusiness and Card Services at Agricultural Development Bank (ADB), disclosed that illiteracy is a key challenge that is affecting digital banking in Ghana.

According to him, in a country where the population still has almost a quarter of adults (15 years and above) being illiterate, a significant number of people are not familiar with most of the apps for banking on their phones.

"For instance, when you want to text, you need to type in a short code, you still need to navigate an app. So for most people, I need to go a step further to root them into the local dilate for them to do. This happens especially when their phones are not instant voice response (IVR) paced," he stressed.

Adu Atefoe added that there are lots of scepticism in the banking sector. For him, people are saying that digital banking is very complicating.

"Even sometimes, bankers themselves, when you get to them and you want them to sign in on any of the digital platforms, they say me I don't do anything e-banking. So it's like that kind of scepticism is there and I think is based on the kind of culture that we were brought up with.

"Some are pretty laid back and they don't do anything. They are much more like the laggard market. They don't embrace new things readily unless it becomes a tradition so they will like to see a teller. And sometimes the customer behaviour is very weird."

Adu Atefoe believes that people need to change their psyche. Our psyche are wired differently especially when it comes to this part of our world.

"I was shocked especially when I rolled out quick alert. That is one of our digital service five years back, I was surprised because I thought people at the down south... right from Kumasi down to Accra and the westerners. And can you imagine it was rather the northerners that were making the movements. The way the northerners are able to embrace the platforms as compared to even those perceived to be elites, it's pretty weird," he asserted.

The Head of Ebusiness also mentioned security as another major challenge facing electronic banking. He believes that irrespective of the good system the banks have, sometimes there can be fraud cases here and there.

"Though security is also a major issue, the uptake is gradual."

He described digital banking in the country as great platform that allows the banks to reach the unbanked and the under-banked.

"It helps you to create much more loyalty with existing customers because you always try to keep customers in the ecosystems of the bank. If the customer will be using money to do certain things, you will like to keep it in the system."

ADB has close to 400,000 - that is about 40 per cent of the customer base - on the alert platform as compared to internet banking which is just 3,000. With mobile banking, ADB has almost 70,000 on the USSD whiles the app platform, which was just re-launched, is now hitting 4,000.

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. "Customers are still demanding more and this is actually putting all the banking institutions on our toes. It's either you change or you will sink so the reality is on us. It's time for survival. We need to save our jobs because if you don't move, the customers will rather move; then, we could go out of business."

But the major challenge is to get everybody to come along. "Technology runs very fast so you need to stay in tune with the development," Leopold noted.

For him, when it comes to technology evolution it is the consumer that is dictating the pace. "Lifestyles have changed. That is what we also have to understand. It has changed because people want to do things at their convenience because of advancement in technology.

"And one thing that has really defined the whole process is the smart phone. It's no more online. It's no more somewhere you need to go. It's now available and closer to you. All that you need is just a touch to get done. So the mobile phone is even redefining convenience."

Furthermore, Leopold Armah observed that although the digital platform is far safer than the traditional way of banking, technology is double-edged.

"What could cause a fraud in traditional banking can also cause fraud within the digital space. As we look at the positive aspects, others want to be smarter. Fraudsters are also getting more sophisticated. Sometimes you even think they understand your system more than you do.

"Unlike the manual process, there is audit trail with the technology platform for us to trail and so far the fraud cases that I have come across, some we have been able to trace it all the way to the recipient and that is really helping the security services a lot."

The GTBank Assistant General Manager said digitalization has come to stay and it is either you embrace it or you are left behind.

In response to the needs of its customers, GTBank launched an online payment hub known as myghpay.com recently. Data from the bank shows that, it has grown over 100 per cent since it was outdoored.

Myghpay.com was launched with 50 merchants but it hit a 100 within a month.

For Nkunimdini Asante Antwi, Policy Analyst and Executive Director for Rural Heights Foundation, the digital evolution in Ghana has been exciting and tremendous.

"If you look at the Bank of Ghana, there was a report that indicated that between 2014 and 2015, there was a growth in mobile money transaction platform from 11.2 billion Ghana cedis to 35.4 billion Ghana cedis. That is the difference of 24.2 billion Ghana cedis in just one year."

According to Asante Antwi, financial institutions play a significant role in the country's quest to eradicating extreme poverty by the year 2030.

"Really, the banking and telecommunications sectors have been key drivers in that area particularly, when it comes to mobile technology," he emphasized.

A lot of businesses are now getting onto the web and the mobile platforms to do their businesses and engage their markets.

He is convinced that economic transactions are facilitated by market efficiencies adding that, "for instance, if I purchase something from you and the ease of payment is not an issue, and I can just make an online payment, it makes market transactions very efficient.

"If you are going to develop the market, it is important that all of these key stakeholders especially the regulator (Bank of Ghana) is up to power in responding to market concerns."

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