African banks need to develop new appropriate data management and data analytics strategies
This comes in the context of the rapidly evolving digital world of international business in the Covid era, where data is receiving increasing attention, not only in the financial services environment but also in a wide range of other industries. Given the potential value of data today, it comes as no surprise that many call data the "new oil".
For banks specifically, data helps identify new business opportunities as well as retain customers and acquire new ones, thus building a competitive advantage in the market. Data also enables banks to optimise and streamline internal processes, improving performance and reducing operating costs. Risk management is improved by providing data that is required by regulators and by developing and assessing customer risk profiles to enhance fraud detection and improve credit management.
The world of technology is changing rapidly and the need is to provide fit-for-purpose solutions for banks with low cost of ownership and that adhere to global standards. In our experience we have found that vast quantities of data assets within most organisations remain undiscovered and unexploited.
Why, then, is there a call for a brand-new look at data management and data analytics in African banks? One reason is that many African banks have data management systems that were imported or imposed from outside, often with serious downsides in the African context.
I would advocate that African banks need a "federated IT model" that can be applied to data management and data analytics and tailored to the specific needs of the bank, and unique circumstances of each country.
The strategic importance of data and the wide availability of tools available to probe it, make it an ideal time for African banks to develop their own data analytics strategies uniquely tailored to their environment. We personally love the opportunity to apply a custom solution that aligns with centre standards that addresses the local compliance and regulatory requirements of a particular country, but also takes cost effectiveness and local skills availability into account. Using our extensive experience within the South African banking sector, there are smart ways to make real, measurable differences to banks in the African region. The results of this approach retain the integrity of local banks and their ability to operate within their countries and their own specific contexts, while enabling integration with the systems of a parent or central bank. The key is the spirit of partnership.
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