Insights on technology-driven influencers and key priorities on IT

By Mr John Mwaka, SASRA CEO

SASRA believes ICT is the new business model
New market entrants for a long time found it difficult to break into the financial services industry. However, ICT led by FinTechs have broken this barrier through innovative technology, often attacking some of the most profitable elements of the financial services value chain from mobile payments to insurance. The implication here is that going forward, consumers will need banking services, but they may not turn to a bank to get them.

Digital is increasingly becoming the mainstream
Twenty years ago, many large financial institutions established business units which were then referred to as “e-business units” to ride a wave of e-commerce during that period. As financial institutions quickly adopted, eventually, the initial “e” went away, and this became the new norm. The development of the internet in addition to large technology investments drove unprecedented advances in business efficiency. Today’s “digital” wave has arrived to advance the digital agenda. This agenda extends from customer experience and operational efficiency to big data and analytics. In financial services, we have seen this approach applied to payments, Sacco’s product offering, retail banking, insurance, and wealth management.

Customer intelligence will be the most important predictor of revenue growth and profitability
In order to fully appreciate their members (customers) value, SACCOs cannot continue relying on old approaches such as focus groups and surveys as the basis of gathering intelligence. Focus groups and surveys are proxies for real, individualized data about consumer behaviour, and the results may not be fully reliable. Today, technology advances have given businesses access to exponentially more data about what users do and want. SACCOs can grab this opportunity and use analytics to unlock the information inside and give customers what they really want. This brings in the whole areas of artificial intelligence and robotics to address key pressure points, reduce costs, and mitigate risks. We have seen a few large SACCOs working towards this direction.

Build the technology capabilities to get more intelligent about your customers’ needs to predict revenue growth and profitability
In order to fully appreciate their members/customers value, SACCOs cannot continue relying on old approaches such as focus groups and surveys as the basis of gathering customer/member intelligence. Focus groups and surveys are proxies for real, individualized data about consumer behaviour, and the results may not be fully reliable. Today, technology advances have given businesses access to exponentially more data about what users do and want. SACCOs can grab this opportunity and use analytics to unlock the information inside and  give customers what they really want. This brings in the whole areas of artificial intelligence and robotics to address key pressure points, reduce costs and mitigate risks. We have seen a few large SACCOs working towards this direction.
Customer intelligence—and the ability to act in real-time on that intelligence—is one of the key trends affecting SACCOs and the financial services industry, and it will drive revenue and profitability more directly in the future. As this happens, many of the attributes that drive today’s brands, from design to delivery, could become less important. In the coming decade, we expect that the ‘new normal’ operating model will be customer- and context-centred. That is, companies will change the way they interact with their customers based on the context of the exchange. They will offer a seamless omnichannel experience, through a smart balance of human and machines.
For SACCOs please note: You can’t pay enough attention to cyber-security
SACCO leadership is already depressingly familiar with the impact that cyber-threats have had on their industry. Unfortunately, it is not likely to change for the better in the coming years, due to the following forces:
•    Use of third-party vendors;
•    Rapidly evolving, sophisticated, and complex technologies;
•    Cross-border data exchange;
•    Increased use of mobile technologies by customers, including the rapid growth of the internet;
•    Heightened cross-border information security threats.
SACCOs have been addressing information security and technology risks for decades. But a growing number of cyber security “events” in recent years has shown that the traditional approach is no longer good enough. In fact, the PwC’s Global State of Information Security Survey 2016, established that there were 38% more security incidents detected in 2015 than the year before.   Many Saccos still rely on the same information security model that they have used for years: one that is controls- and compliance-based, and aimed at securing data and the back office. But information security risks have evolved dramatically over the past few decades, and the approach that Saccos use to manage them need to keep the pace.
Saccos must make sure they have access to the necessary talent and skills to execute and win
As Saccos look to the future, one of the biggest hurdles will have nothing at all to do with technology. For years, they have designed their offerings from the inside out: “this is what we will offer,” rather than “what do our customers want?” But this model is no longer effective. And the skills and interests of today’s IT team members and third-party talent may not be up to the challenges of tomorrow’s technical environment, where partnering with customers will be essential.