TMI270

TMI | ISSUE 270 51 network has long been a competitive differentiator. Clients have enjoyed being able to easily access our cashmanagement services through our local branches, which catered to client needs and reflected their ecosystem. Over the past decade, however, a significant shift has taken place towards digital rather than physical channels. It’s hard to believe, but 80% of clients’ transactions are now executed via electronic platforms rather than in a branch. This shows the popularity of what I like to call ‘interactive’ channels. We’re also seeing the rise of ‘integrated’ channels among larger multinational corporates who want seamless integration between the bank and their enterprise resource planning [ERP] system – either via host-to-host [H2H] or application programming interface [API] connectivity. Nevertheless, among the local corporates in Africa electronic banking platforms, such as internet portals, are more prevalent. The reason why we’re starting to see the shift towards electronic banking and away frombranches is, I believe, that clients are starting to look for instant gratification, extra efficiencies, and the ability to process high-volume transactions. That’s something you can’t offer via the branch network; whereas technology enables us to provide these kinds of services. EH: Youmentioned interactive channels and integrated channels – could you expand on the difference between these two approaches? DT: Interactive channels involve a touch point with the bank in order to access cashmanagement and payment services. Logging on to an internet banking platform or accessing a mobile app are classic examples of this interactivity. Integrated channels, meanwhile, aim to provide the client with seamless access into the banking environment. All the client has to do is create an instruction in their ERP and it goes straight into the bank’s systems via H2H or API, without any further client engagement. The requirement to integrate channels is predominantly driven by large volumes. No treasurer wants to process large batches of payments on an internet banking platformbecause capturing the individual details for each payment is incredibly time- consuming. Multinational clients also often find it easier to build the business case for integrated channels. EH: Is host-to-host popular across the continent, or concentrated in the hubs wheremultinationals are typically headquartered? DT: In South Africa we see amuch greater adoption of host-to-host connectivity comparedwith the rest of the African continent. In fact, 60%of our transactions come via our H2Hplatform in South Africa and 40% come via our internet banking platformand branch network. The technological sophistication of our clients in South Africa –many of which are indeedmultinationals – is what fuels this dynamic. On the rest of the African continent, the adoption of H2H technology is still in its infancy. Most corporates use branches and internet banking platforms; only 10% use H2H.The challenge for these clients is thematurity of their technology and IT systems – often their infrastructure simply isn’t set up for integration. Non- multinationals also often struggle with the concept of opening up their ERP system, so there is an education piece to be done. EH: Howpopular is API connectivity as an alternative toH2H? DT: APIs are still a relatively new concept in Africa. Awareness is growing as Open Banking is starting to unfold across the continent. But once again, the drive for API connectivity is coming from the multinational clients fromEurope and the US who are challenging the African banks to adopt API technology. One of themain reasons that they are keen to use API connectivity is that it is relatively easy to implement comparedwith traditional H2H connections. EH: Ismobile growing as a channel on the African continent? Are large corporates embracing it yet? DT: We’re seeing increasing requests from clients to engage using their mobile devices, Over the past decade, however, a significant shift has takenplace towards digital rather than physical channels.