Banking the Fidelity way
There is something to be said for having well positioned indigenous banks. There is clear evidence that indigenous banks are critical to the development of any country. Banks in general are critical to nation building. Across the developed world, banks are making possible the development of the private sector by channeling resources from surplus areas to deficit areas that require funding for development and for production. They are at the fore front in contributing massively to the GDP growth of the country.
Fidelity bank, being the largest Ghanaian Bank is in a position to lead the development of the private sector through its product and service offerings. It is uniquely positioned to partner the private sector to do business. The Bank’s interest is in Ghana’s development.
As a Ghanaian bank, its profits remain in the country and by being here, they are involved in a range of sectors some of which may not necessarily be the best options in terms of monetary returns.
Hear Jim Baiden, Managing Director of Fidelity: "Responding to customer needs: that is our primary motivation; the bank is driven by customer needs to come up with product after product to meet customer expectations. Just recently for instance, we launched a new product called the fidelity fast and easy loan, a unique product aimed at addressing the needs of customers with cedis in hand but who are unwilling to spend their money simply because once it's gone, it's gone. Many of them are also holding foreign exchange but need cedis to spend. Rather than change their foreign exchange into cedis, they are more than happy to hand it over to Fidelity for a fast and easy cedi loan till they are ready to claim their hard currency again. Through this innovative product, they deposit those monies with the bank and access their fast and easy loans at a low cost of 10 percent per annum.
More and more, innovation is critical in the industry. Everybody needs a bank to undertake some daily transactions and fortunately Ghana has so many banks that customers are spoilt for choice and there is fierce competition. This is good because it should drive down prices and the cost of borrowing. A time will come when the kind of margins banks make today will significantly diminish and to make good money, will now be a function of better customer service.
Jim Baiden says, the bank that serves its customers best, the most efficient bank will make the most money because customers will gravitate towards it.
There is also the significant development of mobile banking and how it has changed the landscape. "Mobile banking is the future of banking because it allows people to do their banking anywhere anytime from their telephones. You can pay your bills, receive and make payments and do your savings on your mobile app. These days a bank is not a place you go to do your banking; it is an activity you do where ever you are and that is the beauty of banking because you get real time information. If you want to download or view your last ten transactions it is possible, and on daily basis you can check all your transactions", says the Fidelity Managing Director.
When pressed about whether the telecommunications firms were not a threat he said,
"What we don’t want is for the telecom firms to muscle us out and become telecom firms and as well as banks; that will be disastrous for banks in this country. So banks do not have a choice but to collaborate with the telecom firms or otherwise the telecoms can put up the capital requirements and secure a banking license and do banking and that will be the end of banking".
Clearly Mobile banking will be the nature of banking for the future and banks will have to find ways of reaching the mass market given the untapped potential available.
There is still a large informal sector with untapped potential and all that money out there needs to be banked by one product or the other.
Ghana still has a huge number of uneducated people receiving payments in cash - farmers, fishermen and miners. Many of them do not have bank accounts.
To address this Mr Baiden says; "That is why financial inclusion is important because it helps us deploy our smart account to mobilize deposits from all these people by presenting them with easy to understand concepts of banking where they do not have to provide the full regulatory requirements for opening an account. I think the bank that will take the lead here, will do very well. Fidelity is doing quite a bit of that by combining corporate social responsibility with our financial inclusion strategy which involves going to the communities, gathering people around, running literacy programs and teaching them the basics of banking".