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Friday, September 24, 2021

Formal banks losing clients to mobile money facilities

Economy Formal banks losing clients to mobile money facilities

The use of formal financial services offered by the banks has decreased from 24.8 percent to 20.7 percent.

German Sparskassentiftung Project Manager and Representative for Zambia, Reinhold Hoernle said this during the official opening of an eighth branch for African Banking -AB in Ndola today.

Mr Hoernle said 58 percent of the adults are instead using mobile money according to the introduction of the new FinScope study for the year 2020 for Zambia.

Mr Hoenle observed that COVID-19 has shown the need for expanding the digital and mobile services which has seen AB bank having 600,000 clients already online and using the platform.

Mr Hoernle said that formal financial inclusion increased to 61.3 percent from 38.2 percent, but that the financial services by adults offered by the banks had decreased.

“According to Fin Scope- study 2020 for Zambia a study about financial literacy stated that the growth in the Zambian economy has been subdued since 2015 with real gross domestic production projected at negative 4.2 percent in 2020,” he said.

He added that the situation has had a direct impact on households as it spoke to fewer opportunities for income generating activities for households.

He said the need to open a new branch in Ndola was part of increasing the number of inclusion of more people accessing bank services.

“The doors of the new banks are not only widely opened to offer services and attract customers. This is not about sales figures, but about inclusion. Besides granting loans, AB bank has become a role model when it comes to capacity building and financial literacy,” he said.

Mr Hoernle added that financial services were essential for the development of a region or a country by offering to the small and medium sized entrepreneurs, who are the core clientele for AB bank.

And AB Bank Chief Executive Officer Cosmin Olteanu said that opening of the Ndola branch was in line with the institutions vision 2023 which offered every citizen simple and affordable financial services.

22 COMMENTS

  1. Banks want to take clients for granted. Look at the long ques at their branches. For a simple deposit it can take you more then 2 hrs at standard chartered Hq.

    So why should we be using banks for our every day transactions. We rather use mobile money, very efficient.

    And with now mastercard teaming up with Zamtel. Hell with the banks

    Only for extreame necessity we use banks otherwise mobile money is the way forward. Unless banks improve on their services.

    They need to open more counters on their branches and improve on their customer service.

    It is unacceptable for us to be standing outside banks or in the ques for hours on end.!!!

    29
  2. I fully agree with the above post. Banks behave like customers must be happy that you are their customers, instead of the other way around. Zambian banks are the worst for service!

    21
  3. ‘Be like water my friend. Water takes the shape of the cup.’ Bruce Lee. Banks have remained rigid not because the people who work in them are dumb but because of 1. Regulation and 2. Government bail outs. Banks rarely go out of business so they have become complacent. They caused the 2008 financial crisis, but they were still rewarded and their chief execs laughed all the way to the banks with huge bonuses. Banks should adapt to the modern financial ecosystem otherwise they will die with the governments.

  4. A bank will have seven counters and only two people to attend to a long que wanting to deposit school fees. Change your game.

    19
  5. NEXT ON HERE WILL BE KAIZER ZULU (TR00LL)
    TELLING US HIS BANK IS DROPPING ALL CHARGES to 0.005%
    HAHAHA

    5
    3
  6. Banks in Zambia are thieves and have been enjoying stealing from people for far too long this is why I use Worldremit….imagine sending £10 to a mobile phone account in Zambia only costs £0.99 and takes seconds to a person with Airtel or MTN mobile account which you can do from your mobile app on your phone whilst relaxing at hom. Now try transferring the same amount of money through a bank it will cost £12 and will take maximum 5 working days.
    Bravo mobilemoney

    17
  7. Services offered by banks have decreased not because Mobile money platforms have taken over the financial system, no.
    The integration if the mobile into the banking system has just brought more people on board because transactions go either way and the majority people transact because they want to withdraw.
    In all banks are actually getting more clients than they are or will be losing. Remember that all the settlements are done by banks.

    1
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  8. at the end of the day, Mobile money is for people who would not open a bank account anyways. Do you expect the CFO of ZESCO to only have a mobile money account? chances are hat he does not keep money there

    4
    1
  9. MTN followed behind Airtel on mobile money and Zamtel is just taking shape.
    Imagine from Chililabombwe to Ndola, there is only one branch office in four towns; if you go in, only 2 HUMAN tellers are working. How many mobile booths and centres in between? About 4000. This is a huge shift

    15
  10. Banking Zambia deliberately withhold innovations just look how long they took to incorporate chip and pin or cashless payments!!

  11. Serves them right. I tried to open a dollar account with a Zambian bank and they told me there is no interest on my cash but there is a monthly handling fee. That was deserving of the middle finger and of course I never bothered. I still keep my extra dollars under my mattress…

  12. Kalok – I left K200 in a Zanaco account in 1997 checked on it in 2017…only to find the account is closed as it was eaten up with bank charges…I am better off buying dollars and burying it behind my Grandma’s house at least it would worth more better than giving to a greedy bank that arrogantly thinks its doing me a favour depositing my money in its account.

  13. For those calling for more branches…you have to relies that banks worldwide have closed half their branches. Branches cost money…plus most services can be done online, via app or phone.

  14. Its a new way of transacting but has limitations and very prone to fraud. main banking is less risky and provides a wider range of services which mobile money services cannot. For instance Corporate banking is complex and involves transacting in huge sums of money. The Commercial Banks just need to be more innovative than depending on traditional methods of banking if they are to retain their customers.

  15. Adapt or die. Banks had the monopoly of financial services and treated customers like garbage. A simple banking transaction meant taking half the day off from work and one can only imagine the huge economic cost we have had to pay as a nation. I do not feel sorry for the banks and instead of crying Zambian Banks need to innovate and find ways they can adapt to changing technologies. We are moving to a space where in person transactions will be a thing of the past and these Banks need to catch up quick.

  16. Nno, its not true. This man is ignorant. It’s Banks that are fubdibg Mobile money. Check your mobile money accounts. Airtel is with Standard Bank while MTN is also with another bank. Banks are not loosing, instead they are running the money mobile show.

  17. We need both banks and mobile money. Even in the markets with more developed mobile money like East Africa, banks have not died out but instead we see more integration of mobile money services into the banking system (push and pull into bank accounts) and banks adopting mobile banking apps and USSD. So for those complaining about long queues, why are you still dealing in cash in the first place? All the leading banks in Zambia at worst have internet banking and at best an app. You should be able to use these channels for those services still taking you into the branches you are complaining about.

  18. We need both banks and mobile money. The transaction limits for mobile money entail that for high value transactions, you will still need to use banking channels. Even in the markets with more developed mobile money like East Africa, banks have not died out but instead we see more integration of mobile money services into the banking system (push and pull into bank accounts) and banks adopting mobile banking apps and USSD. So for those complaining about long queues, why are you still dealing in cash in the first place? All the leading banks in Zambia at worst have internet banking and at best an app. You should be able to use these channels for those services still taking you into the branches you are complaining about.

  19. Not exactly that banks are running the show but that the regulatory requirements are such that a mobile money operators maintains a ‘Trust’ account with a commercial bank. This is like a pooled deposit account for all the funds that are floating in the mobile money providers echo-system and safe guards the deposits.

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