Future of business

Prosper Magazine caught up with Mr Peter Charles Kawumi, the chairman Financial Technologies Service Providers Association (FITSPA) who shared some insights on how financial services are coping in the new normal era. Below are the excerpts:

How can a traditional business transition into an online model?
Previously, the transition to online business was cumbersome and mostly optional. Many lessons have been learnt from the pandemic. One, fintechs have eased the process of onboarding businesses onto their online platforms to enable them accept digital payments.

Also, many businesses now realise that to remain relevant, they have had to make a rapid transition to digital channels.

Online business comes with lower administration costs, reaching a wider market, improved customer support, easy reconciliation, easy monitoring and real time data that make decision making easy. Here are steps to transition; document your business’ operating procedures.

Secondly, segment your customers to know how you can find them or communicate to them online. Get an online presence on a website and social media, communicate to your customers on how they can find you and access your online services.

Have your customer care /technical team online to help your customers through the process until they get used to the new way.

You can work with a payments service provider (that is a fintech) to support you to accept online payments through visa cards and mobile money, among others.

What tools are required to operate an online business?
Ideally, some of the tools one would require to operate an online business are web hosting, a content management platform, shopping cart software which comes with a payment platform, social media management, a payment acceptance tool like a Point of Sale terminal, time tracking and management software and online data storage and backup system.

Give us an overview of fintechs in the “new normal” work life.

Fintechs and financial services firms are rising to the challenge of the Covid-19 outbreak using these three guiding tools; safety, digitalisation and service.

Fintechs have continued to support traditional banking to offer online services to their customers without going to office. By leveraging their services, banks have supporting consumer transactions through digital channels.

This is something these firms do on a daily basis since they purely depend on technology. This time round, they have had to test their Business Continuity plans and train their teams to adjust to working from home very quickly.

Since most of the tools are online, this transition has been seamless.

Currently, there is a significant slowdown of business largely driven by transaction volumes because these transaction volumes directly correlate to consumers’ daily earnings and ability to move freely.

Further, field activities are on hold, hence reduction in the customer reach for the merchant /agent business.

What should retail businesses look like in the future?
We shall see a significant shift towards more non-traditional ways of doing business. We may observe more businesses building online presence while reducing their physical presence. There is also a very good chance that consumers will have noted and may prefer the convenience of placing online orders.

However, the reality of our economy is that cash may still be king. So, while there may be a gradual transition towards non-cash transactions (such as visa cards,), most low-value transactions will still happen in cash.

The good news for both financial consumers and businesses is that various fintechs are active in Uganda to support this transition. A great opportunity thus exists for fintechs to position themselves for what could potentially be a growing market.

How do you effectively manage a business without physically being there?
The “new normal” era has seen many people find ways to cope and manage their businesses without physically being on location.

However, to manage your business when you are not on site requires that you establish structured daily check-ins. Also provide several different communication and collaboration technology options such as; Slack, Zoom, Microsoft Teams, among others.

Establishing clear rules of engagement, providing opportunities for remote social interaction and offering encouragement and emotional support will help you manage a business effectively.

What challenges are fintechs experiencing?
Cardinal among these is access to cash flow sources as some of the projects were being funded from other sources.

Customer performance concern: Although contracts are in place to guarantee payments, we are unsure if these payments will be upheld as several customers are dealing with the emerging crisis in different ways.

The other challenge is activities in the field teams have been put on hold.
Financial risk; decreased revenue anticipated from some of the products as they are driven by transaction volumes is the other challenge.