Nathan Guma
FINANCIAL institution, the People’s Own Savings Bank (POSB) has injected US$5 million into a digital transformation initiative aimed at restructuring operations while boosting non-funded income, amid indications that the bank is getting over 60% of its revenue from digital platforms.
POSB, established in 1904 as the Post Office Saving Bank, reported a robust financial performance, with a net profit of ZW$97 billion, a liquidity ratio of 66%, a capital adequacy ratio of 56.57%, and a low non-performing loan ratio.
The bank’s chief executive officer Garainashe Changunda pegged the total investment in digitalization at US$5 027 012, which includes US$391 825 for 15 Automated Tailoring Machines (ATMs) and US$907 580 for Android POS machines.
This also includes US$261 141 for 190 000 Common Payment Application Contactless Extension (CPACE cards) for contactless payments and US$47 795 for enhancement of POS machines.
“During the third quarter of 2023 (Q3), the Bank introduced the contactless on POS service to allow customers to make quick and instant payments on the POS terminals by tapping or waving their debit card,” Changunda said at the bank’s annual general meeting (AGM).
“The terminal connects with the Bank Account and the payment is made quickly thus enhancing customer experience. The Bank is also making considerable efforts to educate and raise awareness on cyber security to protect its customers from cybercrimes which come with these innovations.”
US$152,249 has also been set aside for Agency POS machines, while US$8 250 has been set aside for multicurrency functionality on mobile network operator (MNO) banking services
“The idea is that we use digital platforms to enhance customer experience. We also improve proportional efficiency,” Changunda said.
“It can also be non-funded income for the bank. On digital platforms, we can reduce costs, serve nour customers and improve customer experience. Close to 60% of our revenue is derived from the use of digital platforms.
“Our digitization strategy is centred around delivering exceptional customer experiences. We have invested in digital channels, such as mobile banking apps and online portals, to make banking more convenient and accessible for our customers. Personalization and customization are key focus areas to cater to the diverse needs of our clients.”
Changunda also said POSB has introduced banking service via messaging platform WhatsApp, which is to improve service delivery, incorporating the younger demographic which is largely online.
“This innovative service allows customers to conduct transactions and manage their accounts directly through the WhatsApp platform,” he said.
“This move aligns with the current trend in the banking industry to leverage popular messaging platforms to provide customers with convenient and accessible banking services. This initiative augments the bank’s customer base through enhanced customer retention.”
POSB also launched an internet batch processing service for businesses of all sizes, enabling efficient handling of high-volume transactions.
“The bulk payments feature is ideal for vendor payments, payroll or any other large-scale transactions, our new functionality allows customers to initiate multiple payments in one go and say goodbye to manual entry and hello to efficiency,” Changunda said.
Enerst Denhere, deputy chief investment officer of the Mutapa Investment Fund, POSB’s shareholder urged the company to invest in generative artificial intelligence (AI).
“The world, and regions around us, are changing rapidly and this presents challenges and opportunities. For example, generative artificial intelligence applications will be extended to larger audiences and will likely further disrupt the banking industry,” Denhere said.
“POSB should embrace fintech by collaborating with fintech startups to leverage their innovative solutions. This could involve areas like mobile payments, remittances and digital lending as well as open banking APIs to enable new services through third-party developers.
Fintech refers to the use of technology to improve activities in finance, which includes the delivery of financial services, facilitating financial transactions and enabling financial management.
He also urged the bank to be wary of customer safety in the ever-digitalizing environment.
“Data security and privacy protection of customer data should be given due attention in new technology solutions and POSB should ensure robust data security measures are in place to protect customer information when using AI and fintech solutions,” Denhere said.
“By embracing both fintech and generative AI, POSB can unlock new levels of efficiency, personalization, and innovation. This allows POSB to cater to customer needs more effectively in a rapidly evolving financial landscape.”
About Author
