Banking provides very important services to enable the economy run, ensures that our system of exchange of value occurs seamlessly and provides opportunities for secured savings, loans and investments.
Banks failing to perform their role, has far-reaching consequences for the economy since it can lead to the collapse of our modern society which is firmly interwoven with a functional banking and financial system.
The importance of banking and financial services was evident during the recent partial shutdown of major cities in Ghana. Banks were running, albeit with limited services and reduced face to face delivery, reduced hours and closure of some of their delivery points, leading to a slowdown of the economy.
Technology stepped in to play a critical role to ensure that even with reduced service capacity the banks continued offering services and drastically reduced the handling of physical currency notes and coins which are thought to be a hotbed for the transmission of the COVID 19 virus.
The central bank took the lead by working with the banks to announce the reduction of charges on transfers of amounts less than 100ghc on mobile money transactions, thus increasing its use.
Most banks followed suit, by pushing the use of their online channels – facilitating financial documents transmission online, processing of clients’ financial instructions online among others. They set up systems to enable movement of funds from mobile money wallets to bank accounts and vice-versa. Electronic Bill Payment & Presentment (EBPP) services, allowing payments via online banking, banks’ mobile apps or using Unstructured Supplementary Service Data (USSD) on mobile also become a piece de resistant.
Currently there is no bank in Ghana operating only online; the ultimate in virtual banking. Some banks have not invested significantly in radical technological innovations, rendering them unable to respond to client’s needs in these times where physical service delivery is challenging. Although ATM’s have become very smart and interactive worldwide, most ATMs in Ghana do not have features such as cash deposits.
There is an argument that depositing thousands of cedis via ATM can be a chore, therefore some banks do not see the need to invest in this. Also, some bank clients will like to deposit funds in person, to give themselves full confidence that their cash is safely deposited with the bank. However, some clients will like to deposit, small sums, and it does not make sense to for them to sit under a canopy at a bank’s forecourt, for hours due to social(physical) distancing rules, just to deposit a few cedis. Further the Ghana Inter-bank Payments System (GhIPSS) should mean cheque deposits via ATM should be a norm since the underlying technologies exists.
Opening a bank account online, applying for a loan online or transferring money using an Email Money Transfer (EMT) are not readily available at most banks. Problems with lack of internet connectivity in some areas coupled with high cost of internet services means some clients cannot take advantage of virtual banking services even if they are available.
Towards a cash lite dream
The expectations of some that Ghana will become a cashless society overnight have been replaced with a realistic cash lite goal. This is largely due to the fact that customers still need access to large amounts of cash to transact business, because of the difficulty in finding Point of Sale (POS) devices even in big stores, not to talk of wayside sellers.
Mobile money no doubt has contributed far greater to our cash lite goal than any other mechanism. The banks and the regulator must push to make all mobile money wallets and bank accounts automatically linked on condition that Know Your Client (KYC) requirements are met. This will go a long way to ensure a greater rate of financial inclusion as well as lesser reliance on cash.
In conclusion, a number of banks clients still require services through physical interaction with their banks due to a myriad of reasons including the banks not being able to offer all their services virtually on one hand and on the other hand, clients unable to interact with their banks virtually. Given this situation, we are going to have footprints at the banks’ branches for some time to come, however, with increased investment and deployment in technological innovations by banks and financial institutions we will get closer to a cash lite society in Ghana.
Kwami Ahiabenu, II is a Technology Innovations Consultant