3 Technologies that are Transforming the Banking Sector in Africa

Technology has transcended race, culture, and class to become a powerful tool for transforming businesses across the African continent.

The rapid penetration of the internet in African regions, as well as the digitization of businesses worldwide, have been major catalysts in the new technology-driven era, with the potential to catapult the socioeconomic growth of many African countries. In today’s world, it is critical for the banking industry to challenge traditional business methods and adapt to modern-day technology in order to advance the African financial ecosystem.

Banking institutions in Africa are currently leveraging technological advances and increasingly adopting digital transformation technologies such as AI, ML, and cloud computing across their banking systems.

Banking infrastructures can benefit from digitization of processes ranging from documentation to payments to customer engagement, and AI, machine learning, and the cloud can all help.

Let’s look at how these three technologies can assist banks in managing, securing, and protecting their banking operations.

Artificial intelligence (AI)

AI has been around for a long time, but the COVID-19 pandemic has accelerated its adoption among businesses worldwide. During the pandemic, consumers have largely turned to online channels, including in their banking habits. As a result, there has been an increase in demand for digital banking channels, new products, and services for transferring funds and managing debt. Banking institutions responded by incorporating AI into their operations in order to provide immediate solutions to their customers.

Various AI-driven applications have improved efficiency by speeding up processes and optimizing difficult tasks. One of the most common examples of how AI can improve the customer experience in banking is the use of chatbots powered by AI. Common customer requests, such as viewing their balance, viewing statements, and transferring funds, can be completed with a few keystrokes or by selecting from a few options. These chatbots are simple and save customers time by assisting them in finding the information they require in fewer steps.

Another source of concern is that, as the number of online banking channels has grown, so have cybersecurity threats.

Countries in Africa, like any other developing region, have seen an increase in reports of malicious activities and data breaches. AI can assist with this by monitoring logs from previous incidents, learning patterns of activity from these incidents, and using them to predict and prevent future attacks.

AI has a wide range of applications in the banking industry. However, AI is still in its early stages of adoption in Africa; however, banks and financial institutions in the region are beginning to recognize that incorporating AI can be highly beneficial.

Machine Learning

ML, a subset of AI, learns from data and experience to improve its performance. It predicts new data outcomes by using previous data outcomes as input.

This is useful in banking for predicting consumer behavior by actively monitoring their transactions and purchasing patterns in order to forecast future spending and income. With the cashless economy gaining traction in many African countries, technology manages and secures countless transactions; this financial consumer data can assist in evaluating consumer credit when offering loans and other financial services.

By learning customer behavior, ML aids in the analysis of large amounts of data in order to provide a personalized customer experience. Predictive analysis is also used to detect anomalies and fraudulent transactions. Traditional methods of risk management, customer service, and fraud detection are no longer adequate in today’s technology-driven world, necessitating the use of ML solutions that provide fast, efficient, and accurate predictions.

Cloud Computing

Cloud computing has been a catalyst in driving digital transformation and providing banks with access to the industry-specific solutions they require to become future-ready in the banking sector.

Adopting cloud solutions can benefit African banks in a variety of ways. Cloud computing provides computer services such as data storage, servers, and software over the internet via data centers located in various locations. These solutions are not only easily scalable, but they also have higher levels of fault tolerance than on-premises solutions, giving customers higher levels of availability.

Cloud services also assist banks in reducing large investments in non-essential new hardware and software. Banks can save money on large capital expenses by using services that offer pay-as-you-go subscription models.

Identifying the best solutions

Banks in the African region must adopt solutions that embrace new and reliable technologies in order to survive in today’s global market.

With ManageEngine’s comprehensive IT management solutions, African banks can now gain complete visibility of their IT infrastructures, ensuring top security, network performance, and compliance. These solutions include solutions for IT service management, operations management, Active Directory management, IT security, analytics, endpoint management, and more.