AS competitive pressures mount in the banking sector, banks have to devise various safety valves, knowing that there is no single silver bullet for achieving sustainable competitiveness.
Report by Omen Muza
Apart from diversifying sources of funding, enhancing liquidity profiles, fortifying balance sheets, growing deposit bases and enhancing access to lined of credit, banks are also actively pursuing a product and channel expansion strategy, if the recently released 2012 financial results are anything to go by. Most banks were unequivocal about their growth strategies and clearly articulated them in statements accompanying the results while others offered no clues.
During the period under review, Agribank rolled out its first phase of e-Banking products; notably Internet and mobile banking, SMS alerts as well as e-statements. The bank also entered into a strategic partnership with EcoCash to facilitate roll out of mobile money transfer services. Going forward, Agribank intends to strengthen strategic alliances that grow non-funded income.
Allied Bank developed a Home Owner Savings account intended to promote savings towards home ownership, on the back of a strategic partnership with Zimbabwe Amalgamated Housing Association (Zaha), a land developer. The bank also says it has developed an electronic funds transfer facility called Cash2Cash for launch into a payments ecosystem already dominated by EcoCash and replete with other alternatives such as RTGS, Zimswitch, Textacash and Mobile Moola.
Having recorded significant growth in transaction volumes during the review period, which in turn buoyed non-interest income due to the wider reach attributed to increased retail outlets and other distribution channels, BancABC is pursuing a decidedly retail strategy. In 2013, the bank is looking to add another 10 branches across the region, including in Zimbabwe.
Barclays Bank launched an enhanced Internet banking offering and sought to improve customer convenience by expanding its automated teller machine (ATM) footprint. The Zimbabwe Stock Exchange-listed lender also launched a Visa platinum card for its Premier Banking customers.
“We are continuously reviewing our channel offering to leverage on the developments in the information communication technologies sector to ensure an exciting banking experience for our customers,” said George Guvamatanga, the Barclays Bank managing director, adding that a number of products and channels were lined up for launch in 2013.
Ecobank Zimbabwe was one of the most active banks in the product and channel expansion space, leveraging on its parent’s expansive pan-African synergies. New products launched included the Ecobank regional card, Ecobank Rapidtransfer, Ecobank Western Union, Ecobank Retail Internet Banking, Ecobank Diaspora Account, Ecobank Savings Account, Ecobank Advance Account and the real-time Zimra payment platform. Going forward, it looks like there is no letting up on efforts to make the bank more accessible to its customers as it intends to roll out at least 10 new branches across the country and deploy more ATMs and point of sale (POS) devices which are integrated into the Africa-wide Ecobank Group network as well as ZimSwitch. The bank also intends to launch MasterCard/Visa card services and an Ecobank Mobile Banking offering.
FBC Holdings’ channel development strategy is premised on its appreciation that, “emerging technologies like the mobile phone continue to avail major opportunities in the distribution of financial and information services,” according to John Mushayavanhu, group chief executive officer. The group, therefore, says it embraces these technological advancements through an e-Commerce drive which has seen launches of the likes of Mobile Moola, SMS Alerts and the Hospital Cash Plan, among other technologically-driven products, with the intention of employing technology to unlock the latent potential amongst the unbanked.
NMB Holdings says its strategic thrust is all about enhancing service delivery and banking convenience to valued high net worth individuals and businesses in pursuit of which it launched the Visa International Debit Card, SMS alerts, E-statements, DStv Payments Real-Time Integration and Real-Time Interface for Zimra obligation payments.
ZB Bank Limited opened new branches in Karoi and Redcliff whilst agencies were opened at Millenium and Premier Tobacco Auction Floors, Chinhoyi University, Midlands State University and the Mbare informal market (Siyaso). It also launched four products targeting long savings, trust account holders, informal traders and students, while revamping and relaunching its Executive Banking offering.
Additionally, 10 new ATMs and 100 POS terminal machines were deployed during 2012. In 2013, the bank intends to continue its channel expansion programme with emphasis on low cost electronic delivery media, while decorating branches “in an effort to continuously enhance customer experience”.
Going forward, the dominant themes in the product and channel expansion discourse are likely to be about how to strike the right balance between brick-and-mortar channels on the one hand and e-channels on the other; choosing between an “all-bling-no-substance” and a “no-frills-utility-oriented” channel development strategy.
Omen Muza writes in his personal capacity.