Traditionally, most commercial banks, over the years have relied and focused on basic banking practices without stepping in uncommon grounds which I call the Internet of Things (IoT), assuming the bigger risk that will see them grow their deposits and revenues. Few banks in Ghana have funded huge investments that have seen flows securitized on the back of funding various social intervention projects. I read with much interest a report by McKinsey & Company published in February 2018 on the topic ‘Growth and innovation in Africa retail banking’. It suggested that Africa’s banking markets are among the most exciting in the world.  It further stated that the continent’s overall banking market is the second-fastest-growing and second-most profitable of any global region, and a hotbed of innovation.  Indeed, the retail banking sector is a locus for new business models, emerging in response to challenges including low levels of banking penetration, heavy use of cash, sparse credit bureau coverage, and limited branch and ATM networks.  In this fast-growing, complex market, there are vast differences in performance between leading banks and lagging banks. It is also believed that Africa has the second-highest cost-to-asset ratio of any region in the world, at 3.6 per cent and this has worsened in the recent past. High margins have tended to protect banks from a dramatic worsening of cost-to-income (CTI) ratios, but margins have come under pressure in recent years.  So, in response to these emerging issues, Banks who will capture the bigger market share are those who can create simpler, leaner banking models for retails clients. I may not be able to touch on all the areas, but this article shares some perspective for bank managers for consideration.  How to lead as a retail Bank; 1. Real-time Payment for Power (Electricity Bills)  In most African countries, the energy sector generates, transmits and distributes megawatts of electric power that is significantly less than what is needed to meet basic household and industrial needs. After the distribution, the mode of payment be it prepaid or post-paid services become a major challenge for consumers. The case is not different from the power sector in Ghana. A bank can decide to position itself to partner the Electricity Company of Ghana (ECG) to pre-finance prepaid meters, buy the energy in bulk and redistribute to clients via our online channels.  A bank that does this will keep the floats and increase deposits. For example, if a consumer runs out of power at the mid, a retail client should be able to buy instant power on an app deployed by a bank instead of physically walking to a nearby vendor to purchase ‘credit’. This will optimise the collection solution.  This could be achieved in several ways, through direct integration to the metering system of the power distribution companies and or through a fintech who can connect directly with for the integration. 2. Become a player in the mobile money ecosystem According to the Bank of Ghana payments statistics, the float on trust account at the end of the second quarter of 2019 stood at Ghs3.03bn. Elsewhere in Kenya, mobile money contributes significantly to the country’s GDP. Float on trust account in Kenya last year was Usd38.5bn Sh3.98 trillion. The story is not different in other countries that have significantly grown its mobile money industry. As we know, after all these transactions are done, they settle on the trust account, and the floats sit with the Trust Account bank. A bank must, therefore, push to be partner banks for the Telcos whether it`s Telcom led or bank-led. As seen in Ghana, some banks are not so strong in the retail banking space as compared to competitors and this could probably be due to small branch network across the region. However, with the right technology, a bank should be able to deliver technology-driven products and services to its clients.  To win in retail banking, banks must embrace lower ‘Know Your Customer’ requirements (KYC) and have a risk appetite to onboard and integrate platforms to these Telcos to enhance Person to Person (P2P) payments. A bank must be agile and increase its speed to market. To be that leading retail bank, there should adequate services including all the major billers on the various online banking channels.  3. Transport Sector Finance There is a huge opportunity in the transport sector which has not to be tapped. Until the recent introduction of Uber drive services in the West Africa Sub-region, payments for various transport services was purely cash-based.  The opportunity in this sector is such that, banks can finance arrangement for the purchase of city commercial bus services, support rail sector, develop an app for individual clients to book rides and pay for these services through various means i.e. Cards, provision of Point of Sales Terminals, mobile money etc.  A bank can partner the various transport service union to provide a service where the bank becomes the collecting bank for all the fees/fares taking place within the transport sector. The individual customers do not have to be clients of the bank and must be able to use the services. 4. Generic Retail Mobile Investment App In Ghana today, there is no single platform or app where retail clients can log on to see all investible securities products on the market- being it T-bills, shares, bonds, fixed deposit etc.  Individuals have to walk to their investment banks, brokers dealers, financial advisors etc before such investments can take place.  A retail-focused bank can partner with other stakeholders such as Government (Ministry of Finance), Securities and Exchange Commission (SEC), Ghana Stock Exchange (GSE), Fund Managers, National Pension Regulatory Authority (NPRA) to come up with a specific App that is linked to the various investment schemes and Central Securities Depository (CSD) where retail clients can leverage on this platform to undertake various investment at the comfort of their homes. This will require the partnership of a Fintech to support integrations to the various platforms. In brief,

• Clients download a whitelisted app 
• Investable securities ranging from T-bills, shares, bonds, Fixed deposit are displaced
• The client selects the appropriate investment instruments based on satisfactory rates/ quotes.
• Bank acting as custodian Bank for all the transactions will receive and settle the transactions
• Due to exponential volume growth, all the systems must be automated
• The bank benefits from transaction fee and float income

5. Tap and Pay Solution: Tap and pay is a contactless solution which enables clients to easily make payments at merchant and vendor points. This solution has become necessary for retail clients because, with this service, customers only point mobile devices to merchant devices without necessarily logging in to their respective accounts. This brings ease and comfort to clients. This solution is offered via Near Field Communication (NFC) which is a secure contactless card technology. To make an NFC payment, the customer simply holds their smartphone against an NFC-capable card reader for a few seconds. Elsewhere, banks who have partnered the service providers to deploy this technology have seen significant growth in retail deposits. It`s not rocket science; this can be done. Summing up, the benefits of all these ideas are enormous to that retail-focused bank that is ready to take the market by surprise and of course, some of them are quick kills.   A bank can take a commanding lead in the retail banking space if some of these initiatives are considered and implemented. Banking is changing in line with new technological trends, today`s youth and millennials are looking for services that are easy on the go with the emergence of smartphones. It’s about time banks pushed harder than what we are seeing. Thanks for reading. Disclaimer: The views expressed are personal views and doesn’t represent that of the banks, media house or the institution the writer works.

About the writer

Carl Odame-Gyenti is a third year PhD (Financial Management) candidate, a Finance and Telecom enthusiast, managing local and global Investors, Intermediaries, Non-Bank Financial and Financial Institution relationships with an international bank in Ghana. He has embarked on several international assignments in London, Singapore, Dubai, Kenya, Nigeria and Southern African markets. He has passion for youth and community development.