By Muhammad Ali Bhikhan, Chief Information Officer, Absa Regional Operations
On June 27, 1967, in the tranquil town of Enfield, London, a curious crowd congregated around a mysterious, curtain-draped apparatus. Once unveiled, this machine, a novel invention at the time, required users to insert a specially treated cheque followed by a unique personal identification number. In return, it dispensed £1 notes, up to a total of £10. Marking the debut of the world’s first automated teller machine (ATM), this event revolutionised the banking industry and set the stage for a wave of self-service technologies that have since modernised sectors like healthcare, retail, transportation, and hospitality.
The ATM is one of many examples that inextricably link the history of banking to the evolution of technology, with innovations in the financial services sector consistently serving as catalysts for broader societal transformation.
This dynamic is particularly pronounced in Africa, where the sector is playing a pivotal role in driving the continent’s digital agenda. In regions characterised by widespread mobile adoption but limited traditional banking infrastructure, innovations like mobile money and app-based banking solutions have become essential in enabling millions to access financial services for the first time, fostering financial inclusion, boosting small and medium enterprises, and accelerating economic growth. Such advancements are directly aligned with the African Union’s Agenda 2063 and Digital Transformation Strategy, which envisions the continent achieving parity with the global community as an integrated e-economy and information society. The plan emphasises robust digital markets, characterised by enhanced financial inclusion, fair competition, and advanced consumer protection, with a focus on digital trade and financial services.
As early adopters and innovators in the digital space, financial institutions are key enablers in this regard. With 76% of banks ranking digital transformation as either their top priority or among their top three – and having already embraced technologies such as digital wallets and payment services, artificial intelligence, blockchain, and cloud computing – the sector is streamlining operations and creating forward-looking products and services which can be leveraged to enhance accessibility, improve security, and foster cross-border integration.
For example, banks like Absa are pioneering across African markets with innovations such as instant payment rails for 10-second money transfers, buy-now-pay-later capabilities on credit cards for instalment purchases, and mobile solutions that transform Android phones into Point-of-Sale (PoS) devices for SMMEs, significantly enhancing transaction efficiency and financial accessibility.
These technologies are being adapted across various sectors to enhance operational efficiencies and expand access to essential services. In agriculture, for instance, digital services are directly connecting buyers with farmers, streamlining farmland leasing, farm management, market access, and online payments. In healthcare blockchain technology is being used to securely manage patient records and transactions between practitioners, insurers, and patients.
This widespread adaptation demonstrates not only the versatility of these digital technologies but also their potential to reshape entire ecosystems. As these technologies continue to evolve, they promise to unlock even greater efficiencies and to forge new pathways for development across Africa. The challenge now lies in ensuring that these solutions are scalable, sustainable, and inclusive, allowing for equitable growth and prosperity across all sectors.
Financial institutions must take a proactive approach here.
This means actively investing in technology startups and innovators who are at the forefront of developing adaptable and cutting-edge digital solutions on the continent by providing capital, mentorship, and networking opportunities to catalyse their growth. Secondly, by better facilitating digital trade, financial institutions can streamline cross-border transactions, reduce costs, and increase efficiency for businesses and consumers alike. This involves implementing and supporting platforms that allow for seamless electronic payments, digital contracts, and e-commerce across borders – all of which minimise barriers to trade.
Furthermore, financial institutions must work closely with regulators to update and refine policies that address the complexities of digital transactions and cybersecurity. This collaboration will create a regulatory environment that protects consumers while promoting innovation and trust in digital services. Simultaneously, digital literacy among consumers must be intentionally enhanced through education programmes focused on understanding digital financial services, recognising online threats, and leveraging digital tools for personal and business growth.
By championing these initiatives, Africa’s financial sector is not only contributing to the continent’s digital agenda but is also setting a global standard for how financial services can underpin the digital and economic growth of a region.
The journey ahead is promising, and with continued commitment to these strategic areas, the continent’s financial landscape will undoubtedly flourish, driving Africa towards a future where digital empowerment is a reality for all its citizens.
