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African banks under pressure to hurry digital transformation

The spread of the COVID-19 pandemic across Africa has seen a surge in digital payments and e-commerce transactions as financial institutions scramble to offer businesses and consumers contactless ways of spending, borrowing, and lending, and making payments.

TransUnion Chief Executive Officer, Kabelo Ramaselwana, has said the effects of COVID-19 on the society will create permanent changes in the way Africans use cards and cash, creating both opportunities and challenges for financial institutions.

“Even in 2020, millions of people across sub-Saharan Africa still pay their bills and send money each month by drawing cash and physically going to a retailer or a bank to make a payment or to receive grant payments,” said Ramaselwana.

With safety concerns emanating from the Covid-19 pandemic, Ramaselwana says people do not want to make physical contact anymore which means banks and FinTechs will have to rapidly roll out safer, contact-free payment methods.

As markets prepare for life beyond the pandemic, digital transformation is reportedly becoming a key strategic initiative for financial institutions across both digital and traditional channels.

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In a bid to encourage people to transact digitally, as the pandemic started to sweep across, most banks reduced costs on their banking apps.

However, as the number of customers transacting online grows, so is the security threat according to Ramaselwana.

TransUnion’s quarterly analysis has identified more than 100 million suspected fraudulent transactions globally from March 11-April 28.

“Now that even more transactions have shifted online, fraudsters are trying to take advantage and companies must adapt. Lenders and businesses need to know exactly who they are dealing with, and how to protect their genuine customers from fraudulent activities,” said Ramaselwana.

The TransUnion Botswana chief says COVID-19 has put immense pressure on African financial institutions to transform digitally and to do this, they will need access to the most comprehensive set of offline and online data assets.

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