In a bid to make banking more digital-first, are we leaving the unbanked behind?

While the financial services sector ramps up its digital evolution, how sure are we that the historical barriers of language, inequality and education are being overcome? EPA/LEGNAN KOULA

While the financial services sector ramps up its digital evolution, how sure are we that the historical barriers of language, inequality and education are being overcome? EPA/LEGNAN KOULA

Published Apr 16, 2023


By Sibongiseni Ngundze

In 2022, the World Bank reported that, globally, some 1.4 billion adults remain unbanked. 

These people are often the hardest to reach – and are more commonly women, poorer, less educated, and living in rural areas.

The report cautioned that while digitalising government and other payments was the way to go, much more was needed, especially to lower barriers to access and to improve physical, data, and financial infrastructure.

Are we as bankers so blinded by the bright lights of the digital realm that we can no longer see the needs of the unbanked?

In the past few years, there have been a large number of physical branch closures, motivated by a desire to be digital-first.

A branch isn’t just where you go to deposit money, it’s a place where you go to receive assistance, to ask questions, to gain a better understanding about the options available to you. Not everyone trusts a bot to guide them.

Though banking is synonymous with money, knowledge is an incredibly valuable currency in our industry.

It is important to always be connected with our customers, both existing and potential. It is through an intimate understanding of their needs that we can better serve them.

We call this customer-centricity – simply put, the needs of the customer should dictate the development of products and services rendered to them.

Knowledge is as valuable a currency for our customers too, as the financial decisions they make will have a direct impact on their lives, both now and in the future.

But how often do banking customers find themselves at a loss when they have to make those decisions?

While the financial services sector ramps up its digital evolution, how sure are we that the historical barriers of language, inequality and education are being overcome?

As we are swept up in excitement about the possibilities of the digital era, are we sure we are bringing everyone along?

This is still a very unequal society. In 2022, South Africa was the most unequal society in the world according to the World Bank’s Gini coefficient, which now sits at 63.

The Gini coefficient, developed by the statistician and sociologist Corrado Gini, is a measure used in economics that represents the income inequality within a nation or social group.

One of the consequences of living in a highly unequal society is the lingering chasm regarding the country’s the digital divide. According to Statista, an online platform specialised in market and consumer data, smartphone mobile penetration in South Africa in 2022 was 78,6% and is projected to grow to 82,02% in 2023. On the face of it, this is excellent news for digital banking.

However, despite the penetration of smartphones, the cost of data in South Africa remains controversially high. This means that while consumers may have a smartphone, many cannot access potentially life-changing information due to the cost implications of owning one.

Effort is being made by government and civil society to get free wi-fi to people and to lessen the unfairness of the digital divide. Dudu Mkhwanazi of social enterprise Project Isizwe told Global Citizen in a 2021 article that 7.5 million low-income South Africans are paying 80 times more than the middle- and upper-income citizens for access to the internet. Project Iziswe is a social enterprise that provides free wi-fi to low-income communities.

The rapid digital drive coupled with the inequality of the digital divide poses a serious obstacle to the unbanked population in South Africa.

It was a burning desire to the bridge the inequality within the financial system that inspired the vision of African Bank. Its founders, Dr Sam Motsuenyane and Dr Richard Maponya were entrepreneurs who understood that the right financial services could transform lives.

They were pioneers who started a bank for those who had been excluded from traditional banking systems. But they envisioned more than simply a bank — with their intimate understanding of the plight of the unbanked, they sought to create a trusted financial partner that would walk alongside our people on the path from poverty to prosperity.

The heritage story of African Bank resonates as strongly now as it did then.

This is why we as African Bank prefer the hybrid model and continue to open new branches. While many banks have been scaling back on their branches, we are expanding our physical footprint in South Africa.

We have since 2022 introduced hundreds new banking pods and kiosks which will give customers increased access to the financial services they desire.

The introduction of kiosks and pods will increase African Bank’s distribution footprint from 400 to 930 outlets by 2025 and complement the bank’s existing physical and mobile branch network, as well as its digital and telephony offerings, and will provide a presence in areas where there are none.

It may buck the trend, but we believe that when it comes to something as important as your money or your financial wellness, sometimes you appreciate a human face at the other end of the conversation.

It also means that we don’t intend to anybody leave behind, whether you have access to data or not.

How you progress in life shouldn’t be determined by connection to a network, a situation made even more precarious considering the energy crisis South Africa is currently experiencing.

By neglecting the needs of the unbanked, we inadvertently neglect the human potential that could truly transform our country. We risk leaving behind entrepreneurs, leaders and specialists with the ability to make a difference in the lives of others. The plight of the unbanked therefore presents an exciting opportunity for the banking sector. We have the priviledge of being able to positively influence the trajectory of our country simply by including everyone in our vision for the future, not just a select few.

Sibongiseni Ngundze is an African Bank Group Executive: Consumer Banking.