Africa: Innovation Imperative

African banks invest to keep pace with treasury clients who are embracing new technology solutions.

Africa’s economy is expected to grow 3.9% in 2020 and 4.1% in 2021, according to the African Development Bank’s African Economic Outlook 2020. This is driven by a young, tech-savvy population open to innovative new products and services. Combined with regulatory regimes, this motivates companies to avail themselves of technology allowing efficent movement of cash and foreign exchange access while taking advantage of growth opportunities.

Not that this is a simple process of evolution. “Africa is a big continent,” says Isaac Kamuta, group head of cash management and client access at Ecobank, this year’s Best Bank for Payments & Collections and Best Provider of Short-Term Investments/Money Market Funds. “Fifty-four countries—with each country still trying to carve out an identity, often translates into different ways of doing business in each country.”

The rapid change in payment and collection solutions is driven mainly by innovation and changes in technology, policies and customers’ buying behavior. “As the use of technology for commerce increases,” says Kamuta, “regulators adapt to support new ways of doing business. The pace of reform is not as fast as businesses would wish; and this poses significant challenges.”

Continuous investment in technology is critical to keep pace with customer needs. “As the largest pan-African banking group [located in 36 countries], we are privileged to operate in this environment, helping clients respond to these changes and help their businesses to thrive,” says Kamuta. “For this reason, we are passionate about finding ways for our customers to pay and be paid seamlessly across the continent—including guiding the conversation with regulators on challenges where necessary.”

The biggest issues corporate treasury departments face in Africa, says Laura Berthout, Societe Generale’s payments director for Africa, is processing international transactions and domestic collections. “For the first issue, Societe Generale benefits from its large international network. And leader position in the different African countries,” she says, giving the bank “good access to hard currencies.”

Societe Generale, our 2020 Best Bank for Cash Management, has a dedicated team helping clients understand foreign exchange regulations, and a long-time presence in various African markets, enabling it to execute international transactions quickly.

“For domestic collection, in addition to the standard cash and check collections, we offer tools that help treasurers dematerialize the flows and execute efficient reconciliations,” Berthout says. “For example, we offer our own mobile payments solution, YUP, in six sub-Saharan countries, allowing clients to avoid using cash for salary payments. We also implement host-to-host solutions processing automatic and secure exchange of information between Societe Generale and the client’s treasury tool.”

Standard Bank–the Best Bank for Liquidity Management, also boasts a strong network and with China’s ICBC a 20.1% shareholder it can provide access to pools of capital globally.

Despite the adoption of new technology, most countries lag in updating their regulatory regime to fit the new digital landscape, Kamuta says. “The shortage of foreign exchange in most countries resulted in exchange control regulations governing the external movement of funds,” he says. “This complicates the management of working capital for corporates. There are various basic instruments available that corporate treasurers use for management of excess liquidity, ranging from fixed deposits and indexed deposits to tiered structures over corporate accounts.”

Banks need to innovate to improve services to their clients, according to Berthout. “Our role in Africa as a leading international bank,” she says, “is to anticipate all the changes that will be introduced in banking services in terms of digitization, transparency, automation and real time and to provide tools and new technologies that clients are asking for, such as Swift gpi, open banking, virtual accounts and instant payments.”


Best Overall Bank for Cash Management Société Générale
Best Bank for Liquidity Management Standard Bank
Best Bank for Payments and Collections Ecobank
Best Provider of Short-Term Investments/Money Market Funds Ecobank