The outbreak of Covid-19 and its impact across the globe has fueled uncertainty and risk aversion among others. These challenging times present an opportunity for the banking sector to provide equally responsive solutions.
Covid-19 has gravely affected the profitability of the banking sector in 2020 and this will certainly spill over into 2021. This could precipitate mergers.
According to Mr Adam Mugume, the executive director research and policy Bank of Uganda, the most important aspect is that going forward, banks must cut costs to remain competitive.
“However, in doing this such as digitalisation of most of their services and sharing operation platforms, unfortunately could also mean laying off staff,” Mr Mugume says, adding that there is a possibility that agent banking would be able to grow at a faster pace and the number bank branches could end up declining and banks should be ready for this.
While the fundamental responsibility of banks will remain safe custody of deposits, intermediation through lending, payments, facilitation of trade among others, the mode of delivery will continue changing especially through the use of digital channels.
Currently, the number of customers in the banking halls is limited at a given time, with banks promoting and encouraging customers to use the available alternative personal digital platforms such as internet banking, mobile banking, ATMs, agent banking and several other trade and customer support platforms. Convenience and safety are critical not to mention affordability.
According to Ms Patricia Amito, the head of communications and corporate affairs at Uganda Bankers Association, the work place setting is changing.
“We have staff working in shifts; others are working remotely with several processes now being automated. What we are dealing with is how managers can support remote working employees through establishing structured regular check-ins, provide several communication options, set expectations, offer encouragement and support to ensure we minimise challenges on productivity caused by lack of face to face supervision, lack of access to information and distractions at home,” she says .
People interaction and relationship management, however, can never be substituted. The sector will remain interactive in the controlled environment.
The banking sector will roll out more structured products and services that speak to specific challenges for specific customer segments. Generic solutions no-longer support business strategy. There is going to be plenty of innovation in the payments space too.
“There is bound to be an increase in cyber risk, but the sector is resilient and we shall continue to up our game,” says Ms Amito.