Technology experts have predicted that by year 2025 to 2030, a market economy could readily emerge without banks, as we have traditionally known them. Consequently, they urged banks in the region to embrace technology and redefine their operations models to meet the emerging demographic and social change or lose relevance, as more core banking services would be delivered outside the regulated banking industry.
The experts warned that the current shape and makeup of the banking industry in Africa and particularly in Nigeria is inevitably going to change. The sheer scope and speed of evolution in customer behaviour, technology, changing market dynamics and aggressive non-bank competitors such as telcos and technology companies mean banking in the future cannot simply be a continuation of banking as it has been.
Scores of industry stakeholders including bankers, financial analysts, media, risks analysts and financial technologists who gathered in Lagos at the eNNovators Breakfast Series (EBS) 10, organised by Financial Technology Magazine agreed that for banks to continue to be relevant, management of the banks should invest heavily in technology, rediscover and reassert their roles in society and connect with millennial generation aspirations.
Experts at the interactive knowledge-sharing EBS, which has as its theme ‘2025: the End of Banking as We Know it’, agreed that Central Banks across Africa require a radical orientation. They informed that Central Banks need to change their mindset and approach, as at present, banking regulators appear to be focused on tactical responses and their strategic objectives for the future of banks and banking are clouded by political expediency and the ‘too big to fail’ debate.
CEO of Innovectives, an e-payment company, Emmanuel Agha, who presented the lead paper, which is a summary of Pricewater House Coopers (PwC)’ research on ‘The future shape of banking – Time for reformation of banking institutions’, explained that banks are facing rapid and irreversible changes of which the current models are no longer sustainable into the future.
According to him, while the PwC paper did not look at the end of banking as a grouping of services focused on meeting financial needs, it is imperative to look at the end of banking and banks as we currently know them. He warned that a failure to adapt could also mean the end of some regulatory bodies and instruments.
Agha argued that: “The challenges and dilemmas posed by the parallel changes in technology, customers and revolution are not confined to the incumbent banks or even the non-bank pretenders. Banking policy and regulatory community would face its own challenges and struggle for relevance”.