The rise of super apps and hybrid banking in Africa
Over half of Nedbank’s retail depositors in its Africa markets are now digitally active says Terence Sibiya, Nedbank Group Regional Managing Executive.
Digitally active clients across the region make up 54% of Nedbank’s retail client base. This has resulted in an increase in transactional volumes on Nedbank Africa’s digital channels including mobile apps and online banking.
“Nedbank Money App (Africa) has proven to be the channel of choice for our clients with payment and transfer volumes up 35% year-on-year and value-added services (airtime, data, and prepaid electricity) up 26% year-on-year,” says Sibiya.
However, with the easing of pandemic restrictions (which served as a catalyst for growth in digital banking), some clients now prefer in-person interaction with banks.
Sibiya says a hybrid banking model is emerging whereby even customers who prefer digital channels make use of in-person banking services at branches.
“Even as banking becomes more digital, clients still want a digital experience with a human touch,” adds Sibiya.
Banks in countries like Kenya and Zimbabwe have reduced the number of physical branches and are ramping up the introduction of digital and online alternatives.
A 2022 report by McKinsey shows that African financial technology companies, including formal banks, mobile money and start-ups, are tapping into a market worth approximately US$150-billion.
According to the report, this market will likely grow by 10% annually to reach US$230-billion by 2025.
African Fintech start-ups, which continue to attract venture financing despite global economic hardship, collaborate with banks to roll out solutions that address challenges with transaction delays and financial inclusion.
There has also been a rush by banks and mobile money companies to launch super mobile applications across Africa.
Kenya’s M-Pesa, Vodacom and others already have super apps, while Nedbank introduced its Avo super banking app in 2021.
Super apps are a “digital platform that has all the essential services” clients need.
For day-to-day banking, South African depositors “prefer mobile banking using an app over internet banking through a webpage,” notes a study released by Boston Consulting Group and Discovery Bank.
About 73% of South African banking clients surveyed for the study said they “prefer to use an app, while 13% say they’d choose internet” banking.”