Suggestions that traditional commercial banking is on a steady decline, with its demise imminent, are wide of the mark and predicated on a misunderstanding of the evolution of banking, as evidence abounds to the contrary, Managing Director of FBN Bank, Victor Yaw Asante has said.
The sentiment appears to be gaining traction in certain circles, with some of the most vocal proponents arguing that the digital revolution has weakened the grip of banks over the creation of money out of credit.
However, Mr. Asante argued that despite an evident change in the dynamics of banking and the introduction of new players, stretching this to mean the demise of banking is simplistic, at best, and myopic at worst.
“That position is an exaggeration. As a matter of fact, traditional banks will become stronger as they will have to do things that make them survive. This will see traditional banks shed much complacency, be more innovative and backward-integrate, and we are already witnessing these,” he explained in an interview with the B&FT on the sidelines of an event to mark 25 years of the bank’s operations in the country.
Continuing, he said: “Let us also not assume that customer behaviour will transform overnight. Banking is cultural; it moves with the culture of society, whereby it operates and changes with it. A proper presentation of what is happening is that banking is evolving. It has done so in the past and will continue to do so.”
The head honcho at FBN bank also pointed to the overwhelming resilience displayed by banks following the COVID-19 onslaught as further evidence of the crucial role they play in the local economy.
Offering thoughts on the factors which are poised to shape banking in the medium- to long-term, Mr. Asante cited more comprehensive regulatory oversight, customer exposure to convenience, as well as competition from the wide spectrum of agile fintechs as the most defining elements. “All these forces are coming together to shape the future of banking, and I expect that the future will be very exciting as all these factors interact.”
With a burgeoning financial sector; a stable socio-political regime, particularly relative to its peers; the second-largest population in the sub-region, with an ever-increasing skilled labour force; and a central location with access to the sea, Mr. Asante noted that Ghana is on course to becoming the preferred destination for trade.
Even beyond being ideal to welcome partners, Ghanaian businesses are set to extend their reach on the continent by setting up shop in neighbouring countries and exporting not just goods but services as well.
Predicting the expansion of indigenous Ghanaian banks into other markets, he said: “Historically, we have been a leader in the sub-region and that is set to continue. It is not a matter of coincidence that we have had banks from neighbouring Nigeria come into the Ghanaian market, and I believe that the reverse is set to happen shortly. Competition, shareholder value, and customer satisfaction will drive us”.