Microsoft: How advanced technologies continue to revolutionise the financial services industry

Microsoft’s Ibrahim Youssry reveals how the realm of finance is leading the way when it comes to progressing with AI adoption

In Africa, technology has long played a defining role in the development of the financial services industry (FSI).

The early days of the internet ushered in online banking and ecommerce, forever expanding and evolving age-old business practices. The boom in mobile phone penetration saw the introduction of mobile money, capturing a significant portion of the unbanked. And blockchain is fast gaining steam among financial firms, given its potential to increase efficiency and streamline processes.

Today, we’re at the cusp of another seismic shift, driven by the defining technologies of our time – the cloud and artificial intelligence. With these technologies, not only are centuries-old banks becoming increasingly agile, but we’re seeing a fertile ground for completely new types of fintech. MaTontine in Senegal, as an example, is bringing traditional African savings circles into the digital world, preserving a local culture of saving money while expanding its benefits.

Although a large number of institutions are still getting started with these technologies, the industry as a whole already has very high expectations of the potential impact of digital transformation. In recent Microsoft-EY research, covering the Middle East and Africa, FSI ranked as the second highest of all industries in its expectation for AI to drive fundamental changes, redefine customer interactions and create alternative revenue streams.

The study shows that already FSI has progressed more than any other business sector, with 38 percent of report respondents using AI in their daily operations. The industry’s speedy uptake of the emerging technology has been largely fueled by fierce market competition, accelerated AI programmes and generally stronger foundations in data management and technology adoption.

Decoding data to understand customers

At the crux of accelerated digital transformation in the FSI industry is access to exponentially more data about what consumers do and want. This presents an amazing opportunity for smart businesses that understand how to use analytics to give customers exactly what they demand. The challenge is that there is an overwhelming amount of data that businesses need to be able to filter and analyse.

Financial institutions are also shifting towards intelligent cloud and AI-enabled systems to process this plethora of data and meet rising customer expectations. Consumers want customised, flexible, easy-to use tools and services which banks cannot provide without a centralised, intelligent customer view – services such as greater personalisation.

South African insurance provider Discovery has had significant success in harnessing data to improve customer experience. The company draws on data sets and AI to deliver a more personalised offering to clients by, for example, creating tailored health goals and flagging customer interactions that display negative sentiment for follow-up.

Through the recent launch of Discovery Bank, the company plans to bring the same level of personalisation and customer-centricity to the banking industry.

The combined power of data and analytics is also enabling more interactive real-time banking services.

Ecobank for example, a leading independent regional banking group in Western and Central Africa, with affiliates in some 33 countries, opted for Microsoft Power BI, a business analytics service which provides interactive visualisations and business intelligence capabilities.

Access to crucial data anytime and from any place is also of utmost importance for a banking business of the size of Ecobank. Thanks to its mobile apps, Microsoft Power BI provides users with the ability to access data, whether on a PC, a tablet or a smartphone, anytime and anywhere, as long as they have an internet connection.

The instant access to data on a daily basis, such as the total volume of our transactions or the total value of transactions, and the performance of a particular affiliate, is also vital to the bank’s own decision-making process.

Harnessing the cloud to drive innovation

The Nutanix Enterprise Cloud Index Report reveals there’s a rapid increase in hybrid cloud adoption in FSI. According to the report, hybrid cloud deployment reached 21 percent, which is above the global average of 18.5 percent.

FSI companies like Nedbank are migrating their operations to the Microsoft cloud to increase data privacy and security in a highly regulated industry. The South African bank utilises all three clouds: Microsoft Azure, Office 365 and Dynamics 365, leveraging the benefits of all three as a seamless and integrated experience, including layers of security and data residency to ensure compliance with local regulations. This has enabled rapid progress in the bank’s transformation journey and is driving its African growth strategy.

Similarly, Standard Bank – the largest bank in Africa – has created a centre of excellence based on Microsoft technologies. By drawing on the power of Office 365, the bank’s various business units are able to quickly create apps and solutions in areas such as ATM management. At the end of the day, the bank will be able to transform its processes, increase efficiencies and completely change the way it operates. More importantly, partnerships like these will help to move the financial industry forward.

It’s clear that through the adoption of new technology, digital transformation can help drive growth of FSI. Fintech on the continent has been forecast to grow from $200 million in value in 2018 to close to $3 billion by 2020. For this to happen, companies need to think about how to use technology to create new opportunities and drive customer growth.

Forward-thinking FSI companies should be adopting cloud technologies to reduce costs, analysing data to create more personalised services, and using customer-focused channels to effectively reach their customers.

When this happens, we’ll see growth, not only of the financial services industry, but of the continent’s digital economy as a whole.

 

About the author

Ibrahim Youssry is the Regional General Manager in the Middle East & Africa (MEA) Multi-Country Cluster at Microsoft. This region consists of 67 countries from North, West, East, Southern Africa and Levant countries including Pakistan. Youssry has built a 12-year career at Microsoft which consists of leading several regional subsidiaries as a general manager as well as heading sales, marketing and technical public sector teams across the MEA region. He is passionate about building organisation capabilities, attracting talents and people development, and leading large organisations to achieve their full potential.