In December 2016, the Monthly Financial Sector Bulletin (MFSB), completed three years of uninterrupted monitoring of new product initiatives in the financial sector.
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In addition to aggregating general financial sector content for the convenience of its subscribers, the bulletin monitors product launches, promotions, enhancements and relaunches.
Some of these have been rated and reviewed in the MFSB after they achieved “Product of the Month ” status.
The full year to December 2016 (FY2016) saw 90 initiatives being introduced; down by 10% from the 100 recorded in 2015.
Contribution by type
The outturn of initiatives comprised of 47 product launches, 31 product promotions and 12 product enhancements. However, this time around, there were no product relaunches.
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Comparatively speaking, there were fewer launches of new products and promotions and only a marginal increase in enhancements.
Below is a comparative summary of products launched in 2014, 2015 and 2016:
The successive declines in new product launches over the past three years are consistent with a worsening operating environment, which stifles innovation.
Contribution by category
Compared to 2015, the year 2016 had a greater number of initiatives and a more balanced spread of product categories.
In the top three, transaction banking weighed in with 22% of the activities, followed by card products at 21% and mobile money at 19%, all of which account for a total of 62%.
The dominance of these three initiatives is reflective of the cash shortages, which made it necessary for players in the sector to promote transaction banking and reconfigure transactions away from cash towards alternative payment channels such as mobile money and plastic money.
Contribution by sub-sector
Sectorally, the initiatives were contributed by the banking sector (53), insurance sector (11), telecommunications or telco sector (14), non-bank retail sector (1), non-bank other (4) fintech (1) and micro-finance sector (6).
Year-on-year, the contribution of both mainstream banking and insurance declined by 15%.
The contribution of the telco sector, on the contrary, increased by 27%.
Notably, the contribution of the non-bank retail players declined precipitously, as they appeared not to be able to stand the heat in a rapidly deteriorating operating environment.
Micro-finance, whose contribution we felt was subpar in 2015, given its status as one of the four pillars of the National Financial Inclusion Strategy, improved significantly in 2016.
Although the fintech sector has made inroads in the financial sector the world over, not much fintech activity was recorded in Zimbabwe during the period under review in terms of bringing actual products to market.
We, however, still maintain that this belies the level of activity that is taking place behind the scenes and in the fullness of time; we can expect to see some interesting initiatives coming from this sector to disrupt incumbents in the banking sector.
Monthly distribution
The precipitous decline in new product development in the second half of the year, which appeared to recover marginally towards the end of the year, is attributable to the announcement of the introduction of bond notes in May, which caused some measure of anxiety and caused financial institutions to sit on the fence, while trying to understand the full import of the new currency measures.
Omen N Muza edits the MFSB. You can view his LinkedIn profile at zw.linkedin.com/pub/omen-n-muza/30/641/3b8 or initiate contact on [email protected]
