The Innovators 2021: Africa

When the pandemic made paper-based transactions inviable, banks turned to a touchless digital environment.

In Africa, trade is a key enabler of economic growth. Cognizant of its importance to the continent’s post-pandemic recovery, Absa Corporate and Investment Bank (CIB) looked for ways to ensure that intra-African trade could keep flowing.

The African bank moved quickly. Since the start of lockdown in Africa, Absa CIB approved $3 billion in working capital transactions and credit amendments due to the circumstances. When possible, the bank used digital platforms or courier services to handle the many documents associated with trade consignments. It also saw the pandemic as an opportunity to onboard more customers to its Trade Management Online offering, where clients can monitor and manage online transactions more easily.

In making trade digital, the bank also recognized that this increased opportunities for fraud, and responded by utilizing the latest artificial intelligence and deep-learning tools while increasing its management and monitoring of possible fraudulent trade transactions.

On the payments and cash management side, the bank rolled out a suite of capabilities making it easier for companies to make single and bulk payments online. Absa CIB also launched Absa Access in June 2020, which provides a single sign-on for customers and a more user-friendly interface that permits the bank to deploy new offerings through multiple delivery channels (online, mobile and application programming interfaces) using a single set of credentials.

Banks are being challenged to create innovative solutions that help their clients run their businesses more easily, according to James Scott, head of Absa Digital and Platform Services.

“There has been a big shift in the way that businesses are looking for solutions from their banking partners,” he says. “It is imperative that the industry adopts the latest trends in digital, data, security, experience and design. The shift from traditional products to platforms will be a big trend unfolding on the continent in years to come.”

However, reducing customer-service overhead is not the only reason many African banks are deploying digital technologies. Pan-African banks like Ecobank are committed to the ethos of building a better Africa, which was the motivation behind its Ellevate Initiative that addresses the $42 billion financing gap for women-led businesses identified by the African Development Bank.

Women own roughly a third of all registered SMEs in Africa, and SMEs account for up to 90% of all businesses in Africa outside of the agricultural sector, according to World Economic Forum research. Ecobank officials note that strengthening women’s access to financing and leadership/mentoring skills is essential for the continent’s continued economic development.

Ecobank launched Ellevate in November 2020 which offers lending and other financial services, as well as nonfinancial services such as business-leadership training to women-owned and focused businesses in 33 sub-Saharan countries. Ellevate is specifically focused on businesses that develop products targeting women (clothing, fashion, cosmetics, health and wellness, and maternity and baby products).

Ecobank will support women-led businesses by giving them slightly higher interest rates on investments and more-favorable lending terms and conditions. Having risk-sharing partnerships in place with development banks also means Ecobank can lend to women offering minimal collateral requirements.

In addition to financing, Ecobank also provides bootcamps for young female entrepreneurs as well as networking and training opportunities to strengthen their leadership skills. Ellevate is different from similar initiatives aimed at women entrepreneurs, as it provides both financial and nonfinancial support, according to the bank.

Ecobank utilized a cross-functional team from its commercial banking, technology, customer experience, risk management and treasury organizations when designing products, to ensure its services adequately addressed the needs of women seeking to expand their business, plan for their children’s education and look after their own health and well-being.