Africa has the capability to approach banking in a whole new manner. In fact, today very few Africans have access to traditional banking accounts. The issue that arises is a lack of infrastructure, writes RESHAAD SHA, Chief Strategy Officer at DFA.
Mobile banking is quickly becoming Africa’s bank of the future. With its largely untapped possibility, the platform has the capacity to enable people to make instant payments, transact directly, transfer money internationally, and manage savings in real time. According to Bill Gates in his 2015 Annual Letter, by 2030, two billion people who don’t have a bank account today will be storing money and making payments with their mobile digital devices. In fact, according to the recent Ericsson Mobility Report, Africa is expected to reach 100% mobile penetration by 2021 and is, therefore, one of the largest markets for mobile subscriptions. With the growing rate of mobile penetration in Africa, mobile banking will be the ideal solution to reach the unbanked market within the fourth industrial revolution.
The shift from brick and mortar to always-mobile
The traditional brick and mortar branch model of African banks poses a challenge when attempting to reach large populations in geographically dispersed towns and villages in Africa. Reaching the un-banked through the traditional model presents logistic, infrastructure, and distribution challenges, which raises the cost of banking services that are intended for a price-sensitive market.
Africa has responded to this challenge by leveraging mobile penetration to put the bank in the user’s hand. Add to that the enhanced user benefits of increased convenience, i.e. the ability to bank and transact anytime from anywhere, reduced risk associated with holding physical cash, and an ecosystem of vendors, applications, and e-wallet-related services, and the stage is set for sustained future growth in mobile banking.
With this in mind, banks have started to implement mobile money systematically throughout sub-Saharan Africa. The GSMA (Groupe Speciale Mobile Association) has mentioned that 52% of all mobile money services are in Sub-Saharan Africa, making it the leading region worldwide. Already almost half (19 million) of Kenya’s 44 million population subscribe to M-Pesa mobile money services, and the rest of Africa seems to be on a similar trajectory.
For example, a survey conducted by World Wide Worx found that cellular banking leaped ahead by a significant 9% in a year, up to 37% in 2013. App-based banking also demonstrates the popularity of mobile banking, increasing to 37% in the same time period. Clearly, users like the idea of effectively having their banking services in their pocket, and this trend will only grow.
Despite positive projections for the uptake of mobile banking, there are a number of barriers that may delay the development of the bank of the future. These include the digital divide, a lack of complex regulatory frameworks that will protect consumers from cybercrime, and a lack of broadband infrastructure. Pervasive high-speed connectivity needs to be the backbone of the bank of the future.
Enabling the bank of the future
Moving towards a vision for the bank of the future is more than just an ideal for someday—it is now quickly becoming a necessity. Banks are no longer facing competition from similar financial institutions with the same legacy systems to contend with. Current business models can be disrupted in an instant by other companies that may not even be in banking itself but that have leveraged digital technology to serve a traditional bank’s customers in new ways.
One example of this is Apple, Samsung, and Google, who have developed their own e-wallet technologies. Another is Bitcoin, which operates on the block chain platform, eliminating the need for banking intermediaries and enabling direct, peer-to-peer transactions that don’t incur traditional banking transaction fees. Telecommunications companies similarly have a keen eye on new ways to extend their reach and garner new revenue with mobile-payment and money-transfer offerings. Banks’ business models are already being disrupted in much the same way as technology has disrupted the those of other sectors, e.g. Uber’s disruption of the taxi industry. If a lesson is to be learnt from all of this, it is to anticipate competition from non-traditional sources.
Banks, therefore, have a choice to make: become content with serving as transaction engines for new innovators that are able to offer more compelling services efficiently, and conveniently, or become disruptors in their own right by innovating their service offerings and leveraging the mobile platform.
While the former path may well lead a bank to assuming the role of understudy to innovative new upstarts, it is the latter which assures that the bank of the future can become a reality and continue to help its customers manage and build their personal wealth. This reality will of course not be possible without the foundation of high-speed connectivity.
Kenya tool to help companies prepare for emergencies
After its team members survived last week’s Nairobi terror attack, Ushahidi decided to release a new preparedness tool for free, writes its CEO, NAT MANNING
On Tuesday I woke up a bit before 7am in Berkeley, California where I live. I made some coffee and went over to my computer to start my work day. I checked my Slack and the news and quickly found out that there was an ongoing terrorist attack at 14 Riverside Complex in Nairobi, Kenya. The Ushahidi office is in Nairobi and about a third of our team is based there (the rest of us are spread across 10 other countries).
As I read the news, my heart plummeted, and I immediately asked the question, “is everyone on my team okay?”
Five years ago Al-Shabaab committed a similar attack at the Westgate Mall. We spent several tense hours figuring out if any of our team had been in the mall, and verifying that everyone was safe. We found out that one of our team member’s family was caught up in the attack. Luckily they made it out.
At Ushahidi we make software for crisis response, including tools to map disasters and election violence, and yet we felt helpless in the face of this attack. In the days following the Westgate attack, our team huddled and thought about what we could build that would help our team — and other teams — if we found ourselves in a similar situation to this attack again. We identified that when we first learned of the attack, nearly everyone at Ushahidi had spent that first precious few hours trying to answer the basic questions, “Is everyone okay?”, and if not, “Who needs help?”
People had ad-hoc used multiple channels such as WhatsApp, called, emailed, or texted. We had done this for each person at Ushahidi (their job), in our families, and important people in our community. Our process was unorganised, inefficient, repetitive, and frustrating.
And from this problem we created TenFour, a check in tool that makes it easier for teams to reach one another during times of crisis. It is a simple application that lets people send a message to their team via SMS, Slack, Voice, email, and in-app, and get a response. It also works for educational institutions, companies with distributed staff, as well as part of neighbourhood networks like neighbourhood watches.
This week when I woke up to the news of the attack at Riverside, I immediately opened up the TenFour app.
Click here to read how Nat quickly confirmed the safety of his team.
Kia multi-collision airbags
The world’s first multi-collision airbag system has been unveiled by Hyundai Motor Group subsidiary KIA Motors, with the aim of improving airbag performance in multi-collision accidents.
Multi-collision accidents are those in which the primary impact is followed by collisions with secondary objects, such as other vehicles, trees, or electrical posts, which occur in three out of every 10 accidents. Current airbag systems do not offer secondary protection when the initial impact is insufficient to cause them to deploy.
However, the multi-collision airbag system allows airbags to deploy effectively upon a secondary impact, by calibrating the status of the vehicle and the occupants.
The new technology detects occupants’ positions in the cabin following an initial collision. When occupants are forced into unusual positions, the effectiveness of existing safety technology may be compromised. Multi-collision airbag systems are designed to deploy even faster when initial safety systems may not be effective, providing additional safety when drivers and passengers are most vulnerable. By recalibrating the collision intensity required for deployment, the airbag system responds more promptly during the secondary impact, thereby improving the safety of multi-collision vehicle occupants.
“By improving airbag performance in multi-collision scenarios, we expect to significantly improve the safety of our drivers and passengers,” said Taesoo Chi, head of the Hyundai Motor Group’s Chassis Technology Centre. “We will continue our research on more diverse crash situations as part of our commitment to producing even safer vehicles that protect occupants and prevent injuries.”
According to statistics by the National Automotive Sampling System Crashworthiness Data System (NASS-CDS), an office of the National Highway Traffic Safety Administration (NHTSA) in USA, about 30% of 56,000 vehicle accidents from 2000 to 2012 in the North American region involved multi-collisions. The leading type of multi-collision accidents involved cars crossing over the centre line (30.8%), followed by collisions caused by a sudden stop at highway tollgates (13.5%), highway median strip collisions (8.0%), and sideswiping and collision with trees and electric poles (4.0%).
These multi-collision scenarios were analysed in multilateral ways to improve airbag performance and precision in secondary collisions. Once commercialised, the system will be implemented in future new KIA vehicles.