Absa Bank: a digital bank for the African continent

CEO of Absa Regional Operations Retail and Business Banking and Chief Digital Officer, Vimal Kumar, discusses reimagining the future of banking in Africa

John O'Hanlon
|Jul 31|magazine21 min read

Nothing is going to be the same again after COVID-19 releases its grip on the world. While nobody can predict what the 'new normal' will look like, the Chief Executive Officer of Absa Regional Operations Retail and Business Banking, Digital and Customer Experience activities across Africa is clear about one thing: the response must be digital. “COVID-19 has highlighted the importance of digital solutions,” says Vimal Kumar. “The investment we made over the past few years in the digital transformation of our businesses across the continent enabled us to better respond during this time of crisis. As a modern, future-forward African banking group, a key pillar in our strategy is finding scalable solutions and platforms that continue to meet the evolving needs of our customers.”

Kumar believes that technology will be the driver of this new type of economy. Regional and local trade mechanisms are likely to replace global supply chains, he suggests, and the most successful financial institutions will be those which can promote digital channels most efficiently, making them cheaper to use, cutting or waiving transaction fees and enabling cashless payments and e-commerce.

While being realistic about the difficulties ahead, Kumar thinks the benefits of the big data and analytics journey the bank embarked on following the commencement of its separation from Barclays PLC in 2017 and it’s rebranding in 2020, stands it in good stead. “As we come out into a new world post-pandemic, we are going to have to accept fundamental shifts in consumer behaviour. From my retail and business banking perspective, I can see a number of positives. Firstly, massive uptake on alternative channels like e-wallet, e-commerce, contactless and conversational AI. Secondly, instead of the slow march to digital transformation in the payment space, we are going to see many years of change condensed into a few months. Thirdly, our employees must become mentally aligned to operate cohesively in a remote and alternative working environment; most if not all organisations in the future will need to find alternative solutions to accommodate their workforce other than physical environments for the next few years. Fourthly, and central to future success is the need for leaner, scalable, low-cost-to-serve business models.”

Absa Group’s new brand has been inspired by the African continent and its people, and the desire to unite under a single purpose – to bring possibility to life. The group’s shared-value approach reflects its ambition to become a purpose-driven financial services organisation creating substantial social impact through core business functions, while also delivering shareholder value.

“One of the key pillars of our new growth strategy is to build a scalable digitally-led business,” says Kumar. “Our aspiration is to become an African banking group with global scalability. Our motto is to ‘Bring Possibilities to Life’ and, as a result, pushing digital boundaries to become customer-obsessed is at the core of our focus.”

There is a high degree of awareness around the fast changing landscape at Absa Group and efforts are being made to accelerate the transformation journey by opening up the group’s legacy systems through microservices/APIs to collaborate with fintechs and startups. “As we progress along our digital journey, we will continue to focus on change that brings value to our customers,” Kumar explains. “And, because we recognise the cultural change that a digital transformation entails, we are already taking the initiative to empower, engage and make our 9,000+ employees in our African regional operations future-ready.

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Instead of the slow march to digital transformation in the payment space, we are going to see many years of change condensed into a few months.

Vimal Kumar | CEO, Absa Group

“Very much a part of this process was during our rebranding to Absa Bank, we unveiled the artificial intelligence (AI) powered humanoid prototype called Abby – Smart Banking Humanoid in our Mauritius market that allows customers to self-service their banking transactions and queries at branches 24/7. It works on both voice commands and keyboard inputs. It uses advanced NLP capabilities to understand customer intent and respond accordingly. After registration, it recognises customers through Face Recognition and allows them to place transactions with a secure PIN set during the registration process. The humanoid also has autonomous navigation capabilities.”

Kumar is also enthusiastic about the chatbot that now sits on the website and is also available on WhatsApp Messenger across the African businesses. Powered by deep AI that supports customers through intelligent conversations, it is capable of doing most of the things that mobile or internet banking can do. This virtual assistant was developed with the help of US fintech Kasisto and the South African enterprise tech company Blue Turtle. “We looked at many providers but liked the Kasisto option because it was a good fit for what we needed. It is already live in all our markets and will soon have transactional capabilities – you can tell it to make a payment and the bot will identify/verify you and complete the transaction.”

Another huge step towards becoming a truly digital bank located in the cloud is happening right now at Absa with the launch of wallet banking, scheduled to launch in some markets from August. Digital wallets or mobile wallets have been a major disruptor in the payment space between traditional financial services providers and disruptors. “They give consumers a fast, secure, low-cost method to use, store and send money over the Internet”. Our wallet program envisages a banking app that allows customers to open an account, apply for lending, create savings products, pay a bill, and purchase airtime amongst other things – all from their mobile. I am very excited about this because it's customer-centric, meeting a need that is felt in all our markets. It helps us deliver banking capability at a very low cost to segments that are difficult to serve through the branch network.”


Importantly, it extends financial access, as Kumar explains. “We want to make it easy for new customers to join the financial ecosystem. Wallet banking brings together a couple of cool things. One is that it helps us penetrate the mobile money ecosystem effectively; it creates a partnership opportunity with other fintechs and with the mobile network operators – the kind of partnership that will be so important going forward. It also helps us onboard customers in a non-physical way so they can either use the self-KYC (know your customer) facility or onboard via an agent. They need never come into a branch!” Wallet banking, Kumar says, is an investment in the future, to be expanded and made more multifunctional.

Since Absa became independent, Kumar has become increasingly convinced that technology is more effectively and quickly implemented by involving partners than by building it in-house. “We have an accelerator programme where we incubate up to 15 fintechs at any one point. We started working with some of those companies because they were building technologies specifically to solve customer problems in Africa. Our biggest success so far has been Jumo, which has built mass data and analytics, and credit assessment capability, working in Africa with mobile lending operators over the last eight years. It is very smart, it can on- board and assess customers, and lend to them based on a multivariate scorecard that ranks risk.”

This technology chimes with Kumar’s vision to reach new segments of society - people who might never come into a bank branch. Absa is now working with Jumo in Zambia, Ghana, and very soon Tanzania and Uganda too, within the mobile money ecosystems there, allowing customers to save and borrow money.

The innovation accelerator, WorkinProgress, was founded in 2015 and is based at Cape Town. It provides facilities and support for startups. Another highly relevant partner to have come from it is Avenews-GT, an Israeli fintech that has digital infrastructure that directly links agri-trade activity with financial services. The farmer can offer his or her supply and the buyer can purchase electronically at an agreed price. Since so much of the African economy comprises small-scale agribusinesses, this is a sector Kumar is particularly keen to excel in, and this marketplace capability is proving very successful.

Africa's diaspora is marked by a great need for effective and fast remittance structures, but aside from large Money Transfer Operators, there are few options, Kumar continued. “We are evaluating a fintech company, Currency Cloud, and have also built an in-house mobile based remittance solution called Novo Fx. Again, this is something our customers are really in need of.”

Partnerships like these in a targeted way reach out to a huge untapped customer base. In 2016, Absa was the first bank to offer South African customers reverse billing over all big four networks, allowing the MNOs to charge data costs back to Absa. “I want our customers to never pay for data either while using the Absa app or website. A fintech called biNu has joined with us to aggregate the data customers use in accessing Absa on their mobile and charge it back to us.” This, he says, will push mobile access, data being an expensive commodity for Africans.

The investment Absa has put into data is now paying off. The bank won the 2019 award for Best Technology Initiative at the Financial Innovation Awards in London for its data analytics platform, which tackles the issue of data availability in banking, especially in emerging markets. “Customer360 (C360) presents data with a lot of visualisation and interactivity. There's gamification and machine learning capability – again, it puts customers at the heart of our strategy. I truly believe we can become a customer-centric organisation by driving personalised experiences through a combination of data and digital. And the employees are as much a part of the journey as the customers are. Digital transformation is only possible if we can get our colleagues on the same page,” he concludes.

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