RBZ urges banks to innovate for survival

RBZ urges banks to innovate for survival

HARARE, August 18 (The Source) – The Reserve Bank of Zimbabwe (RBZ) says banks must come up with new and innovative products that encourage financial inclusion in the country where the majority of the population remains largely unbanked.

Deputy central bank governor Charity Dhliwayo told delegates attending a banking, finance and insurance conference in the capital recently that banks must take advantage of technology, which she said has introduced a paradigm shift in the functioning of banks and delivery of banking services

“There is no doubt that an efficient banking system is a prerequisite for an efficient economy. With the fast-paced technological advancements and innovation in electronic banking products there have been significant transformation in the delivery channels in the banking sector and payment system platforms including mobile money and internet based payments,” she said.

Dhliwayo noted that the growth of the internet, mobile and communication technology has added a different dimension to banking.

“Information technology is now being leveraged in customer acquisitions, driving automation and process efficiency, delivering ease and efficiency to customers. In this regard, technology is no longer an enabler, but a business driver which is enhancing efficiency in the value chain of banking institutions with benefits of reduced costs and higher productivity,” she said.

Zimbabwean banks are struggling to retain depositors due to poor interest earnings on deposits but with high cost on borrowings, with the majority of people preferring mobile transactions.

Statistics from the central bank show that total banking sector deposits stood at $5,6 billion by June 30, 2015, compared to a total of $6,1 billion that was transacted on mobile platforms between 2009 and 2014.

Electronic payments are expected to hit the $50 billion mark by year-end.