With banks witnessing significant changes in customer engagement patterns with a shift from traditional transaction channels toward digital platforms, spurred on largely by the advent of the COVID-19 pandemic, Managing Director of Fidelity Bank Ghana Limited, Julian Kingsley Opuni, believes that now is an ideal time to bring the conversation on financial inclusion to the fore.
The pandemic, according to Mr. Opuni, provides the best opportunity for stakeholders in the financial sector to discuss measures to finally move the economy from a cash-based one to a cash-lite one which would witness the further deepening of financial inclusion.
Mr. Opuni was speaking exclusively to the B&FT, as he discussed how banks can leverage the pandemic to drive financial inclusion, in line with the theme for the 2020 edition of the Ghana Economic Forum (GEF), ‘Resetting the economy beyond COVID-19; Building economic resilience and self-sufficiency,’ which begins today.
He added that serious dialogue must be had about the dynamics of financial inclusion, as it is a multi-faceted problem and a one-dimensional approach to addressing it would be counter-productive.
The Fidelity Bank MD, who will be part of a panel to discuss banking and finance in COVID-19 times, stated that in his estimation, the first line of action should center on efforts at increasing financial literacy, especially off the back of the financial sector reforms and the misconceptions that have been propagated as a result.
Furthermore, he suggested that it is simplistic, even erroneous to always equate financial exclusion to poverty as some of the persons who are considered to be financially excluded by definition, hold on to large sums of cash.
He added that these persons must be dissuaded from using cash by touting the advantages, especially the safety and convenience of digital platforms as well as providing them with incentives for onboarding onto digital platforms.
“We must encourage people to go digital, with regards to as much of the real sector of the economy as possible. We are a very cash-driven environment and the lack of visibility has implications for both government revenue and the ability of banks to lend to the real sector of the economy. We must put incentives in place for those that we see are financially excluded, to make it worth their while to be included.”
He also highlighted the inverse correlation between the cost of data and use of digital platforms.
According to Mr. Opuni, the pandemic has sped up the usage of banks’ digital channels. He cited the example of Fidelity, which before the pandemic recorded approximately 60% of total transactions on traditional channels but now has approximately 70% of customer engagements via internet banking, the bank’s mobile application and other digital platforms like WhatsApp.
He added that Fidelity is now seeing an increase in the use of cards for online payments. So much so that the use of cards online has now overtaken the use at Point-of-Sale (POS) terminals, at about 15%, whilst withdrawals at automated teller machines still maintain a healthy lead.
Mr. Opuni concluded by noting that in addition to financial inclusion, he will discuss the role of banks in strengthening the economy as part of his remarks at the Ghana Economic Forum. He further explained that the role that the banking sector can play with respect to the resuscitation of the economy going forward is very important.
He highlighted the value of creating an “ecosystem that includes credit bureaus and stronger legal structures for recovery of assets, among other measures, to create an enabling environment that is conducive to lending and creating the ease for banks to support the recovery of the economy.”