‘EAC banks upbeat despite COVID-19’

25Sep 2021
By Guardian Reporter
The Guardian
‘EAC banks upbeat despite COVID-19’

​​​​​​​DELOITTE yesterday released the East Africa Banking Industry Trends 2021/2022 for Tanzania, Kenya and Uganda showing the business has seen “better times” despite COVID-19 disruptions.

Charles Luo, leader of the Deloitte East Africa financial institutions services team (FIST).

A statement released yesterday by the global consulting firm said the publication themed ‘Fortifying Resilience’ shows however that the emergence of the COVID-19 pandemic has posed significant threats and shocks to the wider economy.

Banks are being forced to rethink how they operate their businesses to remain relevant by adopting digitalization, the report underlined.

Prior to the outbreak of the pandemic, the financial services industry was evolving at a steady pace, driven mainly by changing consumer expectations, heightened competition, evolving regulations and advancements in technology.

Within a short time, COVID-19 has compelled far reaching adaptations in customer behaviour, moving significant portions of the economy online and increasing customers’ willingness to engage digitally, he firm said in a briefing.

Charles Luo, leader of the Deloitte East Africa financial institutions services team (FIST) stated that the global and regional banking industry has faced momentous headwinds in the recent past, with business leaders have had to navigate through substantial financial, operational, and talent challenges.

Regionally, this has necessitated accelerated digitization in an industry that is almost always undergoing digital transformation, he further noted, elaborating that the report highlights major trends that regional and global banking specialists consider to be essential in current strategies.

“They focus on ensuring that banks strengthen their financial and operational resilience and thrive in going forward in a still highly unpredictable environment,” he asserted.

The report dives into key banking industry trends, like accelerating digital transformation, strengthening operational resilience, recovering credit loss, mitigating the rise of cyber-crimes, adapting to the evolving regulatory environment and emergence of inorganic growth, arising from buying other businesses or opening new locations.

“We have used available historical data to assess the banking industry performance in Kenya, Uganda, and Tanzania, and to give our insights on how bankers can change the trajectory going forward,” the summary intoned.

The COVID-19 pandemic has taken approximately six million lives worldwide and seen economic stimulus packages in most countries, totaling to well beyond $13trn, four times more than the response to the 2008 - 2009 financial crisis.

“Considered the black swan of 2020, the COVID-19 pandemic ravaged through economies both globally and at an East Africa level, with far reaching effects witnessed across several sectors. The pandemic is now considered part of the new normal, though navigating through this new reality is expected to be bumpy and slow with full recovery and rebound in 2021 still largely uncertain,” the firm underlined.

Timothy Machira, FIST senior manager remarked further that in a constantly evolving environment, banking institutions that take advantage of opportunities arising from such change and plan for attendant financial and operational challenges will most likely thrive and outperform their peers.

“Banks’ strategic focus should be on taking advantage of these opportunities and having in place measures to mitigate adverse consequences of anticipated challenges. We hope that the key trends highlighted in our report will provide insights to banks’ decision makers in these areas.”

“The Banking Industry Trends Report 2021/2022 is based on first-hand experience and insights of Deloitte’s specialists, and we hope you find it thought-provoking and bankers can contemplate on their strategic priorities and adjust your agenda for the year ahead,” he added.

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