Despite the collaboration between telecom companies (Telcos) and banks, a survey by PricewaterhouseCoopers (PwC) has revealed that banks are on the losing end as a result of the mobile money platform’s success.
According to the survey, 80 percent of 19 bank executives who responded to the survey confirmed that the mobile money platform has led to the erosion of banks’ revenue generated from fees and fund transfers. The amount of revenue lost, though, was not stated.
What this essentially means is that monies that the banks used to generate from charges on customers who employed their services to transfer funds to other accounts are now being lost to the telcos, as customers now find it more convenient to use the mobile money platforms than banks.
“For 80 percent of the respondents, mobile money is having the greatest impact on their businesses. Bank executives are of the view that the uptake of mobile money has contributed to eroding revenue, especially fees on fund transfers,” the survey said.
The report, however, added that banks remain committed to the country’s financial inclusion agenda, and as such intensification of the financial inclusion drive and growth in mobile and Internet banking will facilitate greater credit access.
In addition, 83 percent of the surveyed banks expect to invest significantly in technology and create agile businesses over the medium-term – which will be crucial to meet customer demands and grow profitability.
Again, despite some activities of FinTechs causing disruptions for banks, the survey said more than 80 percent of the banks view them as partners rather than competitors and are willing to collaborate with them.
The survey also showed that 92 percent of the respondents placed a high priority on cyber and information related issues; with 83 percent of the banks saying they have a cyber and information security plan in place which they follow religiously.
However, the banks added that the cost of engaging qualified consultants for cybersecurity services remains high and continues to be a challenge.
Outlook for the banking sector
The PWC says it expects to see growth in underwriting credit to both the private and public sectors, and this will be largely driven by strong demand across Ghana’s expanding economic sectors, particularly the manufacturing, mining and services sectors.
It further said that it expects a rebound of confidence in the banking sector following the recapitalisation, good corporate governance practices, and sanitisation of the non-bank financial institutions, among others.
Again, the reforms introduced by the Bank of Ghana, according to PwC, will position the banking sector to fully address the demands of customers.