{"id":468650,"date":"2018-03-01T02:46:49","date_gmt":"2018-03-01T02:46:49","guid":{"rendered":"https:\/\/ghana-mma.com\/2018\/03\/01\/africas-banking-markets-among-most-exciting-in-the-world-report\/"},"modified":"2018-03-01T02:46:49","modified_gmt":"2018-03-01T02:46:49","slug":"africas-banking-markets-among-most-exciting-in-the-world-report","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2018\/03\/01\/africas-banking-markets-among-most-exciting-in-the-world-report\/","title":{"rendered":"Africa\u2019s banking markets among \u2018most exciting in the world\u2019 \u2013 Report"},"content":{"rendered":"<p><\/p>\n<div id=\"medsection1\">\n<!-- End of html generated by this->header() --><\/p>\n<p class=\"floatLeft\">Business News of Thursday,  1 March 2018<\/p>\n<p class=\"floatRight\"><strong>Source: <\/strong>Myjoyonline.com <\/p>\n<p>2018-03-01<\/p>\n<div class=\"article-left\">\n<p class=\"article-image\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/ghanamma.com\/wp-content\/uploads\/2018\/03\/87265509.295.jpg\" alt=\"Banks Bank\" title=\"Banks Bank\" width=\"295\" height=\"161\" \/><span class=\"image_caption\"><span>According to the report, Africa&#8217;s banking markets are among the most exciting in the world<\/span><\/span><\/p>\n<div class=\"noPrint\">\n<div id=\"537626303\" style=\"width:300;height:250;margin:0;padding:0\">\n<p>\t\t  <noscript><iframe loading=\"lazy\" id=\"b2ad7fa7fd\" name=\"b2ad7fa7fd\" src=\"http:\/\/ghanaweb-d.openx.net\/w\/1.0\/afr?auid=537626303&amp;cb=151125813973067\" frameborder=\"0\" scrolling=\"no\" width=\"300\" height=\"250\"><a href=\"\/\/ghanaweb-d.openx.net\/w\/1.0\/rc?cs=b2ad7fa7fd&amp;cb=151125813973067\"><\/p>\n<p>\t\t  <img decoding=\"async\" src=\"https:\/\/ghanamma.com\/wp-content\/uploads\/2018\/03\/1519872409_650_ai\" border=\"0\" alt=\"\" \/><\/a><\/iframe><\/noscript><\/p><\/div>\n<\/p><\/div>\n<\/div>\n<p style=\"clear:right\"> The McKinsey Global Banking practice on Wednesday published a new report on African retail banking \u2013 \u2018Roaring to life: Growth and innovation in African retail banking\u2019.<\/p>\n<p>The report finds that Africa\u2019s banking markets are among the most exciting in the world. The continent\u2019s overall banking market is the second-fastest-growing and second most profitable of any global region, and a hotbed of innovation.<\/p>\n<p>Nearly 300 million Africans are banked today, a number that could rise to 450 million in 5 years. The report illustrates four segments of African markets \u2013 from the advanced markets like South Africa and Egypt to fast-growing transition markets such as Kenya, Ghana and Cote D\u2019Ivoire, to sleeping giants like Algeria, Nigeria and Angola, to nascent banking markets like DRC and Ethiopia.<\/p>\n<p>The report finds that Africa\u2019s top quintile banks \u2013 the so-called \u201cwinners\u201d &#8211; are simultaneously 4 times more profitable and over 2 times faster growing than bottom quintile banks. The report\u2019s key findings are that these \u201cwinners\u201d are defined by employing one or more of five winning practices:<\/p>\n<p>Draw the right map. In Africa, geography matters. About 65 percent of African banks\u2019 profitability (measured by RoE) and 94 percent of their revenue growth are attributable to their geographic footprint. Importantly, the report highlights a shift in exchange-rate-adjusted revenue pools to North Africa, East Africa and West Africa, and away from South Africa.<\/p>\n<p>Right segments, compelling offers. We find that 70 percent of revenue pool growth will occur in the middle segments, defined as earning between US$ 6,000 and US$ 36,000 in annual income. The mass market \u2013 individuals earning less than US$6,000 per annum \u2013 accounts for 13 percent of the growth but is the fastest growing segment. Whichever segment banks choose, having the right proposition is key. Our survey of 2,500 banking customers in 6 African countries finds that 25 percent of customers choose price as the most important factors in choosing banks. Equally important is convenience, also cited by 25 percent of customers. Service is the third most important factor, selected by 12 percent of customers. We also find huge cross-sell opportunities \u2013 while 95% of Africans have transaction products, fewer than 20 percent have lending, insurance, investment or deposit products.<\/p>\n<p>Leaner, simpler banking. While African banks\u2019 cost: income has been falling, we find that this is due to rising margins for banks, and their cost-to-assets ratio has actually been worsening. At 3.6 percent, Africa has the 2nd highest cost-to-assets ratio in the world. However, rapid efficiency gains are possible, and we spotlight eight African banks that have made strides in efficiency in the last five years, through a combination of three levers \u2013 end-to-end digitisation; sales productivity improvements fuelled by advanced analytics; back- and middle-office optimisation.<\/p>\n<p>Digital first. 40% of Africans prefer to use digital channels for transactions. In four major African countries \u2013 South Africa, Nigeria, Kenya, Angola \u2013 a higher proportion of Africans prefer the digital channel for transactions to the branch channel. Given low branch density in Africa, banks need to employ a digital-first approach.<\/p>\n<p>The report hones in on four themes of innovation emerging in Africa on digital \u2013 end-to-end digital transformations (e.g. Equity Bank); partnering with telco companies (e.g. CBA in Kenya or Diamond Bank in Nigeria); building a digital bank (e.g. ALAT in Nigeria); and building an ecosystem (e.g. Alipay in China).<\/p>\n<p>Innovate on risk. African banking still has the second highest cost of risk in the world. Poor data availability is part of the problem: 11 percent of Africans are on credit bureaus, compared to in excess of 90 percent in advanced markets. However, we are seeing innovations such as banks partnering with data and analytics fintechs like Jumo to improve credit underwriting; banks partnering with telcos to leverage telco data to issue small-ticket loans on mobile, and players employing payroll lending across countries.<\/p>\n<p>This new report draws on the experience of McKinsey\u2019s partners and colleagues serving banks across Africa; McKinsey\u2019s Global Banking Pools research; a proprietary database of the financial performance of 35 of Africa\u2019s leading banks; a survey of executives from 20 banks and financial institutions across Africa; and a broad-based survey of 2,500 banking customers from 6 Af<\/p>\n<p><!-- uploaded by: 49 updated by: -1 --><\/p>\n<p><!-- Start of html generated by this->footer() -->\n<\/div>\n<p>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a style=\"display:none\" rel=\"follow\" href=\"http:\/\/megatheme.ir\/\" title=\"\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633\">\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Business News of Thursday, 1 March 2018 Source: Myjoyonline.com 2018-03-01 According to the report, Africa&#8217;s banking markets are among the most exciting in the world The McKinsey Global Banking practice on Wednesday published a new report on African retail banking \u2013 \u2018Roaring to life: Growth and innovation in African retail banking\u2019. The report finds that [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":468651,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-468650","post","type-post","status-publish","format-standard","has-post-thumbnail","category-local-news"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2018\/wp-json\/wp\/v2\/posts\/468650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2018\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2018\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2018\/wp-json\/wp\/v2\/comments?post=468650"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2018\/wp-json\/wp\/v2\/posts\/468650\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2018\/wp-json\/wp\/v2\/media?parent=468650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2018\/wp-json\/wp\/v2\/categories?post=468650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2018\/wp-json\/wp\/v2\/tags?post=468650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}