Introduction

The acceleration towards digital-first experiences is causing the banking industry to go through a paradigm shift in the backend. Its traditional operating models are gradually turning into dinosaurs –being replaced by consolidated backend processes. With integrated core banking systems made available in real-time, on the cloud, banks are eliminating the enormous volumes of paperwork and saving a lot of time, effort, and cost.

More importantly, they are improving workforce performance by adapting to the new normal.

Banking on the future of Operational Performance

Today, the need for banks to remotely collaborate and do business is global. Going digital is no longer a debatable question. Rather, the question is – how much digital should you go? Operating on a fully cloud-hosted model might seem like the most agile and scalable choice – but it might not be your best option. If your bank has worked with on-premise systems even for a few years, the migration process may come with its fair share of complexities. The key is to let your on-premise systems seamlessly interact and collaborate with your cloud applications.

Meanwhile, you can lay the roadmap to increase digital adoption that can perhaps lead to one day being fully operational on the cloud.

The Era of phased Digital adoption

Phased digital adoption is especially of paramount importance for future-thinking players in emerging markets like the African Banking industry. These markets are undergoing significant changes, not just in the wake of the pandemic, but rather as a result of the rise of new middle-class and digital natives in their respective locations. Banks discovered that there are plenty of opportunities that could be tapped into by extending their financial service reach.

Key milestones

  1. Creating a roadmap of transformation with measurable checkpoints
  2. Synergy between legacy IT infrastructure and cloud-hosted applications/devices
  3. Seamless multi-channel integration points for increased “clean data” flow
  4. Willingness to invest in a workforce of the future
  5. Usage of self-run regulatory compliance frameworks
  6. Profitable cost-to-asset ratios with back-end scalability

Advantages for African banks

  • Youngest median age of population (just over 20 years) compared to global average – better chance of digital-first mindset
  • One of the fastest-growing market segments (population strength of over 1.2 billion)
  • Fewer outdated legacy IT systems – easier to go digital
  • Low-cost technology infrastructure – predicted Internet boom to create huge demand for core banking services

Cometh the challenge, cometh the opportunity

This year, the pandemic has spurred digital transformation across the African market. On one side, governments are encouraging customers to leverage digital payments to avoid direct interactions. On the other, banks are investing more in migrating their core operations from branches to digital platforms.

As if to bind them together, the modern customer’s service expectations have skyrocketed – thanks to the influx of digital-first retail brands. And this has triggered more financial inclusivity in unreachable communities.

Banks in countries like Rwanda may have come late to the digital world, but recent years have seen them embrace digital adoption with as gusto. However, these emerging markets are not without their challenges.

  • Growing cybersecurity concerns around data governance
  • Low-quality network and connectivity coverage
  • Poor institutional framework that leads to poor core banking performance
  • Lack of skilled resources to manage digital transformation, including C-suite ownership
  • Dependency on multiple vendors working in multiple geographies

How Aspire digitally empowered a Rwandan bank with Oracle Fusion Financials Cloud Service

Development Bank of Rwanda (BRD) is a sustainable provider of development finance for socio-economic impact in Rwanda. Since their inception in 1967, they have grown to become one of the leading banks licensed by the National Bank of Rwanda. In view of the growing rate of digital adoption in the region, they were looking to improve their core banking performance and grow their customer base.

Clear and present challenges:

  • Significantly high application maintenance costs
  • Time-consuming processes due to manual interventions
  • Lack of efficient workflow monitoring

The client was in critical need of a clear digital-first strategy to simplify their application maintenance efforts and get more visibility on core business processes. Hence, they required a scalable and flexible cloud-based application like Oracle Fusion for Financial services cloud service to help them drive their strategic initiatives and focus on their vision to grow their banking business.

Our future-proofed solution

Aspire Systems, an Oracle Fusion Cloud Implementation partner helped the client achieve their business and technology goals firstly by Oracle Fusion Cloud Consulting for Financial Services and then implementing out-of-the-box features and functionalities in Oracle Fusion applications cloud service. We helped integrate the T24 core banking system to provide real-time availability of their core banking systems and give them a full view into their banking performance.

We also provided post Oracle Fusion implementation application support for two months to ensure a smooth transition.

Applications supported

Business benefits

  • Moved and adopted Oracle Financial Cloud services – that increased visibility
  • Successful Integration of Oracle Fusion with Core Banking T24 systems- ERP to provide real-time availability
  • Extended employee visibility by providing personalized and automated notifications
  • Consolidation of back-office processes and reduction of manual intervention

Conclusion

Published In 2018, a McKinsey study had revealed that “Africa has the second-fastest-growing banking market—taking retail and wholesale banking together—in the world.” It was twice as profitable when compared to the global average. And they had predicted it would grow at a rate of 8.5 percent over the next five years.

Now, as it races towards a digital-first future, the only surety is that improved operational efficiency is the key to unlock successful transformations. Classic example is the above-mentioned Oracle Fusion implementation case study.

Veena Gowda