DEWALD NOLTE, VP Business at Entersekt, offers some tips on how African banks can attract and retain customers, despite their age to ensure they are preparing for future generational expectations.
As mobile internet connectivity grows, African youth are fast embracing the opportunity to connect, converse and transact on the web.
According to the GSMA (Mobile Economy Report 2015), mobile internet penetration in Sub-Saharan Africa was expected to reach 38% by 2020. This has largely been driven by lower costs of smartphones, which the GSMA says have decreased by 20% since 2008. A rapidly growing local app market and easy access to games and social media have captivated the youth market.
Although the Millennials generation is a Western construct, African youth (18 to 34) – particularly the urban youth – are displaying similar online behaviour patterns to their counterparts in developed countries. And, while the older generations may accuse them of being driven by a need for instant gratification, the youth’s expectation of simple, fast and always-on service is shifting how organisations design their offerings.
Banks, meanwhile, have built their credibility by portraying themselves as the bastions of the economy, institutions designed to protect your money, with caution built into their organisational DNA. While this is important, of course, it isn’t something that necessarily attracts their fastest growing potential customer base.
Here are five pointers to help African banks attract and retain customers, no matter what their age, and to ensure they are preparing for future generational expectations.
1. Prepare to be compared
At the very outset, it’s important for banking institutions to understand that the younger generations are swiftly getting used to having information at their fingertips.
Research published by Pew Research Centre (2015 Global Attitudes Survey) shows that African youth are jumping at the opportunity to engage online. In Tanzania, those aged between 18 and 34 are 17% more connected to the internet than their elders. This climbs to a significant 31% in both Nigeria and Kenya. The research also shows that the connected youth are active on social media on a daily basis.
Social media is being used to ask questions and to make comparisons based on experience. Price comparison websites are also making it easier to make informed decisions.
This significantly changes the dynamic of how the youth choose products and interact with brands. It is obvious then, that banks will need to change the way they engage with the younger generation. Designing for a frictionless experience must be priority.
2. Just make it work
User experience becomes a key issue when servicing customers across generations.
Based on their engagement with global sites, the connected youth have an expectation that everything must work immediately, offer real value, in a seamless experience.
While the younger generations have a better understanding of technology, continued literacy challenges and multiple regional dialect demographics adds complexity to the user interface served up by financial institutions. Complex security terms such as phishing and pharming can cause mistrust of the service. In many instances, this lack of understanding may lead to customers avoiding digital channels altogether, which in turn drives up the cost of delivery for the banks.
Making use of technology that appears exceptionally simple to the user takes away the fear factor. When it comes to authentication, banks must guarantee their customers’ protection against phishing and other digital fraud vectors without the costly and clumsy use of one-time passwords. These may give the appearance of good security, but they are less effective and overly complicated, particularly for those accessing services on their phones. Removing complexities at the very outset of the transaction resonates with both the older and younger generations.
3. No one reads anymore
No generational cohort reads lengthy warnings or instructions. People will click through to the end of an instalment or process without actually being fully aware of the details – or this may again increase their mistrust of the service. Moreover, in our experience, when an organisation uses text-heavy instructions, abandonment rates shoot up. When communicating instructions, the “keep it simple” rule reigns supreme.
4. Markets are not the same
Companies also need to understand that new markets work very differently. What may have worked in Botswana, may not be obvious to those in Kenya. People use and engage with technology, language and each other differently in every market. This includes generational quirks.
Banks will need to tweak their user engagement depending on where they are operating. Working with partners who have experience in a region allows a bank to learn from their experiences, which can save time and costly mistakes.
5. Innovating for future generations
We see a lot written about banks becoming simple transaction pipes. To avoid this, they must adapt in order to provide better value for their customers. This can be achieved in three ways:
- A simple user authentication, which has excellent security, is a great way to build trust with customers.
- Once this is in place, you can confidently open up your channels and add new services.
- Banks can then begin leveraging their merchant network in order to start on-selling their products to their customers – essentially becoming an aggregated merchant platform. By nurturing trust, banks are able to capitalise on a captive customer base and bring to bear vast economies of scale.
The complexities of catering across borders and language barriers and for different generations with different user expectations are enormous. However, if banks invest in technologies that are simple, seamless and flexible, they can not only ensure all age groups form trusting, lasting relationships with them, but also take an important step towards building new revenue opportunities for the future.
Now for hardware-as-a-service
Integrated ICT and Infrastructure provider Vox has entered into an exclusive partnership with Go Rentals to introduce a Hardware-as-a-Service (HaaS) offering, which is aimed at providing local small and medium businesses (SMEs) with quick, affordable, and scalable access to a wide variety of IT infrastructure – as well as the management thereof.
“Despite an increasingly competitive business environment where every rand counts, many business owners are still buying technology-based equipment outright rather than renting it,” says Barry Kemp, Head of Managed IT at Vox. “The problem with this is that the modern device arena has grown in variety and complexity, making it more difficult to manage, and to reduce the overheads of controlling these devices.”
According to Kemp, there is a global trend being observed in businesses moving away from owning and managing IT infrastructure. This started with the move away from servers and toward cloud-based subscription services, and now organisations are looking to do the same with the remaining on-premise hardware – employees’ desktop systems.
The availability of HaaS changes the way in which local businesses consume IT, by allowing them to direct valuable capital expenditure toward the more efficient and competitive operation of their organisation, rather than spending on hardware products.
“The rental costs are up to 50% lower than if they buy these products through traditional asset financing methods. Furthermore, using HaaS gives businesses the ability to scale up and down depending on their infrastructure requirements. Customers on a 12 month contract can return up to 10% of the devices rented, while those customers on 24 and 36 month contracts can return up to 20% of the devices – at any time during the contract,” adds Kemp.
More than just a rental
HaaS gives business access to repurposed Tier 1 hardware from vendors such as Dell, HP and Lenovo, equipped with the required specifications (processor, memory, and storage), and come installed with the latest Microsoft Windows operating system, unless an older version is specifically requested by the customer.
Kemp says: “Where HaaS is different from simply renting IT hardware is that businesses get full asset lifecycle management, such as having all company software pre-installed, flexible refresh cycles and upgrades, support and warranty management and transparent and predictable per user monthly fees.”
The ability to upgrade during the contract period means that businesses can keep pace with the latest in technology without needing to invest on depreciating equipment, while ensuring maximum productivity and efficiency for employees. Returned devices are put through a decommissioning process that ensures anonymity, certified data protection, and environmental compliance.
Businesses further stand to benefit from Vox Care, which incorporates asset management and logistical services for customers. This includes initial delivery and setup in major centres, asset tagging of all rented items, creation, and the repair and/or replacement of faulty machines within three business days – again in the main metropolitan areas.
Vox Care also assists in the design, testing and deployment of custom images, whereby HaaS clients can have the additional programmes they need (security, productivity tools, business software, etc) easily pre-installed along with the Windows operating system, on all their machines.
Kemp says HaaS customers can get further peace of mind by outsourcing the day to day management of their desktop environment to Vox Managed Services, as well as leverage the company’s knowledge and expertise to manage and host workstation backups to ensure business continuity.
Says Kemp: “Hardware-as-a-Service allows businesses to reduce the total cost of ownership of their hardware and ensure they only pay for what they use. Making the switch to a service model helps them take advantage of the global move in this direction, and to turn their business into a highly functional, flexible, low cost, change your mind whenever you want workplace.”
Seedstars seeks tech to reverse land degradation in Africa
A new partnership is offering prizes to young entrepreneurs for coming up with innovations that tackle the loss of arable land in Africa.
The DOEN Foundation has joined forces with Seedstars, an emerging market startup community, to launch the DOEN Land Restoration Prize, which showcases solutions to environmental, social and financial challenges that focus on land restoration activities in Africa. Stichting DOEN is a Dutch fund that supports green, socially-inclusive and creative initiatives that contribute to a better and cleaner world.
While land degradation and deforestation date back millennia, industrialization and a rising population have dramatically accelerated the process. Today we are seeing unprecedented land degradation, and the loss of arable land at 30 to 35 times the historical rate.
Currently, nearly two-thirds of Africa’s land is degraded, which hinders sustainable economic development and resilience to climate change. As a result, Africa has the largest restoration opportunity of any continent: more than 700 million hectares (1.7 billion acres) of degraded forest landscapes that can be restored. The potential benefits include improved food and water security, biodiversity protection, climate change resilience, and economic growth. Recognizing this opportunity, the African Union set an ambitious target to restore 100 million hectares of degraded land by 2030.
Land restoration is an urgent response to the poor management of land. Forest and landscape restoration is the process of reversing the degradation of soils, agricultural areas, forests, and watersheds thereby regaining their ecological functionality. According to the World Resources Institute, for every $1 invested in land restoration it can yield $7-$30 in benefits, and now is the time to prove it.
The winner of the challenge will be awarded 9 months access to the Seedstars Investment Readiness Program, the hybrid program challenging traditional acceleration models by creating a unique mix to improve startup performance and get them ready to secure investment. They will also access a 10K USD grant.
“Our current economic system does not meet the growing need to improve our society ecologically and socially,” says Saskia Werther, Program Manager at the DOEN Foundation. “The problems arising from this can be tackled only if a different economic system is considered. DOEN sees opportunities to contribute to this necessary change. After all, the world is changing rapidly and the outlines of a new economy are becoming increasingly clear. This new economy is circular and regenerative. Landscape restoration is a vital part of this regenerative economy and social entrepreneurs play an important role to establish innovative business models to counter land degradation and deforestation. Through this challenge, DOEN wants to highlight the work of early-stage restoration enterprises and inspire other frontrunners to follow suit.”
Applications are open now and will be accepted until October 15th. Startups can apply here: http://seedsta.rs/doen
To enter the competition, startups should meet the following criteria:
- Existing startups/young companies with less than 4 years of existence
- Startups that can adapt their current solution to the land restoration space
- The startup must have a demonstrable product or service (Minimum Viable Product, MVP)
- The startup needs to be scalable or have the potential to reach scalability in low resource areas.
- The startup can show clear environmental impact (either by reducing a negative impact or creating a positive one)
- The startup can show a clear social impact
- Technology startups, tech-enabled startups and/or businesses that can show a clear innovation component (e.g. in their business model)
Also, a specific emphasis is laid, but not limited to: Finance the restoration of degraded land for production and/or conservation purposes; big data and technology to reverse land degradation; resource efficiency optimization technologies, ecosystems impacts reduction and lower carbon emissions; water-saving soil technologies; technologies focused on improving livelihoods and communities ; planning, management and education tools for land restoration; agriculture (with a focus on precision conservation) and agroforestry; clean Energy solutions that aid in the combat of land degradation; and responsible ecotourism that aids in the support of land restoration.