“Branch footfall does not justify bricks and mortar,” says Moyo, who took over at the bank on 1 April. “There will definitely be cost savings” from the trend to digitalisation, she adds.
The Covid-19 pandemic initially prompted Nedbank Zimbabwe to close branches and move to minimal staffing levels. This led a tripling of traffic on social media and at contact centres, where customers can get in touch via telephone, e-mail or SMS.
- Corporate customers, especially those that need to make bulk cash deposits, have had more difficulty adapting, Moyo says.
- Some of these also have heavy documentation requirements for imports and exports.
- The bank has made it easier for new retail clients to sign up via mobile phone.
- Bank cards can’t be mailed out for security reasons, so greater use of agents is being made in supermarkets and workplaces.
- The bank may extend use of such partners so that basic banking operations can be carried out in a physical setting for those who need one, she explains.
Pleasant surprises and problems
Since taking over, Moyo has been pleasantly surprised by the depth of the bank’s talent pool, the strength of compliance teams and the “clean, strong” balance sheet. “I haven’t had to spend my time fixing things.”
A problem that the bank needed to fix resulted from the arrest of 28 of its tellers in April 2019 on charges of defrauding the bank and its customers by replacing US dollar deposits with local RTGS dollars. The fraud reportedly cost the bank $1.1m.
- As a result, system controls have been introduced to keep the currencies separate, Moyo says.
- There are now daily cash reconstructions for the separate currencies.
- Recruitment procedures for tellers have been tightened and psychometric tests are now used.
Fintech squeeze
There hasn’t been a heavy impact from the pandemic on borrowers. The bank has little exposure to tourism and less than 2% of corporate and retail customers have needed a repayment holiday, Moyo says. She explains this by the bank’s historically conservative lending policies. The bank has been “selective” rather than “aggressive” in its lending, she says.
According to The Promise of Fintech, a report from the IMF in July, Zimbabwe is among countries where mobile payments have largely replaced cash transactions, and progress in financial inclusion is entirely driven by fintech.
- Mobile-money transactions in Zimbabwe in 2018 exceeded 75% of GDP, the IMF says.
- The IMF notes that greater global use of digital financial services poses risks to financial stability if regulation does not keep pace. Potential cybersecurity risks will proliferate.
- International agreements will be needed in areas like cybersecurity, data privacy, digital identification, cross-border digital currencies and the regulation of ‘Big Tech’ companies, the report says.