As part of its ongoing activities, the Monthly Financial Sector Bulletin (MFSB), a roundup of key Zimbabwean financial sector developments which provides proprietary data, business intelligence and analytical content supporting decision-making in financial markets, monitors new product initiatives in the financial markets.
Omen Muza
This installment of the Financial Sector Spotlight (FSS) reviews the product development situation — as recorded by the MFSB — during the first half of 2015.
●Product Type A total of forty-four (44) new product initiatives were recorded in the financial services sector encompassing mainstream banking, mobile banking, insurance, microfinance and non-bank players. Twenty-nine (29) of these initiatives were new product launches while eight (8) were product enhancements. The MFSB recorded six (6) product promotions during the review period and one (1) product re-launch.
●Contribution by Sub-Sector The banking sector accounted for the lion’s share of the product initiatives (26) followed at quite a distance by the insurance sub-sector with seven (7) initiatives. Non-bank players contributed six (6) initiatives while the telecommunications sector weighed in with five (5). In mainstream banking sector, Steward Bank had the highest number of initiatives at six (6), buttressing its claim to the mantle of one of Zimbabwe’s most innovative banks. Other banks that were also quite active are CBZ Bank, POSB and CABS with four (4) initiatives apiece. Interestingly, these banks which feature prominently in the product development stakes are also amongst the nominees in the banking category of the Mobile Money Awards to be launched at the Mobile Money & Digital Payments Conference set for 27th July 2015.
●Product Category Transaction banking services were dominant in the first half of the year, with twenty-six (26) of the initiatives intended to meet the transacting needs of the banking public or to improve transacting convenience. There were eight (8) new insurance initiatives covering travel, motor, funeral, and life insurance. The contribution of lending (8) and savings (4) products demonstrates all that is wrong with the country’s matrix of saving and lending habits – we lend more than we save. Yet in order to grow the pool of funds available for lending and ultimately reduce the cost of lending, we should be saving more than we spend, yet the proceeds of most of our loans go towards consumption.
●2014 vs. 2015 Compared to the same period in 2014, which recorded 36 initiatives, 44 product development initiatives were recorded between January and June 2015. This growth was on the back of marked increases in the contributions of banking and insurance despite lower contributions by the telecommunications and non-bank sectors. The decline in activity by the telecommunications and non-bank sectors is attributable to deflationary pressures/industry-specific issues and lack of scale respectively.
●Notable Products Several of the products launched during the first half of the year have game-changing impact in terms of the value and convenience they bring to the transacting public’s doorsteps. These products include the Infrastructure Development Bank of Zimbabwe (IDBZ)’s Home Saver Account, a mortgage-based savings account; Steward Bank’s Airtime ATM Sales & ATM-based EcoCash Cash Outs; CBZ Life’s Wealth and Keyman Protection Plans as well as EcoShopper and EcoCash Savings Club. ●Send feedback: [email protected]. You can view Omen’s profile on https://www.linkedin.com/pub/omen-n-muza/30/641/3b8
