Yinka Sanni, CE for Africa Regions at Standard Bank.

The digital drive towards alleviating poverty, promoting economic growth, and building opportunities through financial inclusion is slowly being won. But, for many Africans, ‘cash is still king,’ and financial institutions have much to do to build on the successes that saw 49% of Africans join the formal banking sector between 2011 and 2022, says Standard Bank.

However, says Yinka Sanni, CE for Africa Regions at Standard Bank, challenges in promoting equal access based on gender, income, education, and age are still prevalent and demand attention if the goal of universal access for financial services is to be achieved.

Amongst the issues that need to be addressed is the uneven acceptance level of digital solutions across different countries.

In South Africa, the acceptance rate is 85%, Mauritius has 91% account ownership, and Kenya at 79% also stands out. South Sudan, by contrast, has a penetration of only 6%. Of 16 out of 36 economies surveyed, well over 50% of adults have financial accounts.

“This points out that for inclusive banking to break across the 50% barrier and soar further, several things must be achieved. Attention will have to be given to infrastructure development in regions where poor internet and mobile phone networks cause connectivity to continue to lag. Building financial literacy and trust in digital systems is still crucial in some regions.”

“Where competitive and innovative telecommunications and fintech companies are present, digital banking is generally more accepted. In contrast, however, adopting inclusive banking becomes a challenge in countries where regulatory hurdles and infrastructure issues hamper the spread of communications outside urban areas.”

The causes of the variation in the acceptance of digital banking across Africa are multi-faceted and complex. They involve the interplay of infrastructure, economic conditions, regulatory environments, financial literacy, cultural attitudes, and market dynamics, all of which contribute to the unique digital banking landscape in each country.

“Addressing these factors holistically is key to increasing digital banking adoption across the continent and must be ongoing if Africa is to become a competitive, digitally enabled continent.”

What must continue to be addressed, says Sanni, are the primary benefits of inclusive banking.

These begin with the reduced risk of theft or loss, ease of transactions without the need to visit traditional branches, safe payment mechanisms and use of ATMs to access credit and build savings.

“The most important gains are the building of a credit and financial history. For communities, the emergence of entrepreneurs promotes access to goods and helps build communities.”

The pillars needed to build financially inclusive societies must continue to be:

• Financial literacy alongside, affordable and relevant financial products and services to individuals, entrepreneurs, and small businesses, including those who may not have smartphones.
• Customising financial products and services to meet the unique needs of specific client groups, including women and young people.
• Growing customer confidence and trust in products and services.
• Enhancing customers' financial well-being through information, tools, and training. To empower people to manage their finances effectively.

“For Standard Bank, adhering to these guidelines has achieved many milestones in Africa,” says Sanni. These have included:

• A total of R 148,9m granted for enterprise development funding.
• In South Africa, 893 enterprises preserving 3 508 jobs and generating 2 107 new opportunities.
• In Uganda, the creation of business opportunities for 1 116 people and 27 businesses through seed-funding

• In Kenya, 36 000 women have tailored accounts and receive secured loans worth R 2.6 billion.
• In South Africa, the WalletWise Radio Drama promoting financial literacy, reaching 28.6mn people.

“The key to increased financial participation is to continue working to close the digital divide. This must include ensuring that belief that ‘if I don’t have much money, I don’t need an account’ is shown to be untrue, “says Sanni.

“There is no doubt that significant progress has been made during the last decade on ensuring inclusive banking for all.

“Changing technology and the advent of Artificial Intelligence (AI) will allow data generated by economically disadvantaged customers to be shared among financial institutions. Sharing this data with customers' consent will enable competitors to collaborate in key areas and offer improved and more affordable products. In addition, AI-based educational platforms could promote financial literacy and empowerment.”

“What is certain is the wave of digital technology, its increasing use, and the price advantages it offers Africans, are preparing the way for even more people to join financial institutions and reap the benefits that arise,” says Sanni.