The Future of Digital Financial Services in Africa: Game-Changing Insights from CEO Ashraf Zaki

The First Edition: Embracing Multi-Business Line Banking

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Exclusive interview with Ashraf Zaki, supported by research and real-world examples, on the evolving trends and challenges in African banking innovation

The African banking industry is undergoing a seismic transformation. Over the past decade, the region has witnessed an explosion in mobile banking, digital payments, and financial inclusion initiatives, driven by rapid technological advancements and a growing demand for accessible financial services.

According to a report by the African Development Bank, nearly 43% of Africa’s population remains unbanked, highlighting the immense potential for growth in the financial services sector. Moreover, the GSMA’s 2023 Mobile Money Report reveals that Africa accounts for 70% of the world’s $1 trillion mobile money market, underscoring the pivotal role of digital solutions in reshaping the continent’s financial landscape.

In this three-part series, we explore the key innovations shaping the industry, offering exclusive insights from Ashraf Zaki, CEO of CIT VERICASH, a leading fintech enablement platform driving financial inclusion and digital transformation. Ashraf Zaki shares his insights on the industry’s trajectory, the technologies shaping its future, and the role of collaboration in navigating this dynamic landscape. Each edition delves into critical aspects of digital financial services, uncovering opportunities and challenges in the evolving ecosystem.

This first edition focuses on the importance of multi-business line banking as a fundamental strategy for financial institutions seeking to remain competitive. As banks and financial service providers expand beyond traditional models, the ability to integrate multiple business lines under one cohesive strategy is becoming a game-changer.

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Multi-Business Line Banking: A Path to Innovation

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Zaki highlights the importance of multi-business line operations as a key innovation strategy for banks to thrive in a competitive landscape.

Every financial institution should establish itself as a multi-business offering entity," he explains. "This means going beyond traditional banking by integrating diverse operations like micro-businesses, fintech subsidiaries, and advanced financial services under one umbrella

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Every Financial institution should establish itself as a multi-business offering entity, '' he explains, this means going beyond traditional banking by integrating diverse operations like micro-businesses, fintech subsidiaries, and advanced financial services under one umbrella

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He elaborates on how this approach supports scalability and adaptability. "Imagine a banking group that has a traditional bank and has also created or acquired multiple micro-businesses, each focused on different customer categories and advanced services. With the right platform, they can manage all of this efficiently from a single system," Zaki notes.

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The ability to operate across different business lines provides banks with a significant competitive edge. "It's not just about covering more ground; it's about customizing and personalizing services for every customer while maintaining agility," he adds.

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Zaki emphasizes that speed and efficiency are crucial in executing this strategy. "Institutions must have high agility. They need to launch services in weeks, not months, and do so with minimal development costs," he says. This aligns with Vericash's vision of empowering banks to operate seamlessly and innovate rapidly.

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This multi-business line strategy positions financial institutions to cater to evolving customer needs while maintaining operational efficiency, making it a cornerstone for future success.

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Harnassing the multi-business line strategy empowers financial institutions to leverage their combined resources to compete effectively against both smaller fintech startups and larger established banks. By consolidating various services onto a single platform, institutions can harness their collective strengths, offering comprehensive solutions that meet diverse customer needs. This integrated approach allows banks to operate beyond their traditional domains, utilizing their full potential to gain a competitive advantage in the market.

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In 2024, the global embedded finance market is projected to reach $111.72 billion, with a compound annual growth rate (CAGR) of 32.81%, potentially reaching $1.43 trillion by 2033. This rapid expansion highlights the growing need for financial institutions to integrate multiple business lines, such as fintech subsidiaries and alternative financial services, to remain competitive.

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Additionally, 56% of businesses already offer embedded finance solutions, and 55% of non-financial businesses plan to introduce these services within the next two years, underscoring the scalability and necessity of diversification.

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Understanding Centralized Integrated Ecosystems

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A centralized integrated ecosystem in banking refers to a unified platform where all of a financial institution's services and operations are interconnected. This ecosystem enables seamless data flow and operational harmony across various business lines, enhancing efficiency and customer experience. One of the pivotal components of such an ecosystem is the 360-degree customer view.

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A 360-degree customer view consolidates all customer interactions, transactions, and preferences into a single, comprehensive profile accessible across the institution's departments.

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This holistic perspective allows banks to understand their customers deeply, facilitating personalized services and proactive engagement. For instance, with centralized customer data, banks can enhance customer segmentation, improve service delivery, and tailor products to individual needs, thereby boosting customer satisfaction and loyalty.

For financial institutions, adopting a centralized integrated ecosystem with a 360-degree customer view is crucial. It allows them to harness the combined power of all business lines, providing a unified approach to customer service and product development. This integration not only streamlines operations but also positions the institution to respond swiftly to market changes and customer demands, thereby maintaining a competitive edge.

Beyond the 360-degree customer view, a centralized integrated ecosystem enhances agility and scalability, allowing financial institutions to launch services quickly and expand seamlessly. It reduces operational complexity, lowering costs and streamlining workflows. Additionally, it strengthens cybersecurity and risk management by improving data governance and fraud prevention. Finally, it fosters better collaboration between departments, enabling seamless communication and superior customer service, driving long-term growth.

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CIT Vericash’s Role

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Vericash is shaping the future of banking in Africa by enabling financial institutions to manage all their digital services on a single platform. Ashraf Zaki explains, "While Vericash is predominantly a software technology company, we are not in the business of selling software to our customers. We are in the business of becoming a strategic partner to our customers."

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Vericash is well positioned for this next chapter in digital banking, ''Zaki adds, '' allowing financial institutions to operate across channels, businesses, & markets efficiently,''

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Its platform combines agility and operational excellence, empowering institutions to bring services to market quickly. "They cannot be thinking about the service and go live months later. They have to go live weeks and days later," he emphasizes.

The VERICASH platform supports financial institutions operating in multiple countries, allowing them to manage various financial services under a single, unified infrastructure. The platform integrates digital banking, payments, lending, and agency banking, eliminating the need for multiple disparate systems. This reduces operational complexity and lowers costs by consolidating services into one platform.

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Conclusion

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As financial institutions navigate the rapidly evolving landscape of digital banking, adopting a multi-business line strategy is proving essential for scalability, agility, and competitive advantage. The ability to integrate diverse financial services under one umbrella allows institutions to meet customer needs with greater precision while driving operational efficiency. With the global embedded finance market projected to grow exponentially, the time for financial institutions to rethink their business models and embrace diversification is now.

Through this series, Ashraf Zaki provides a forward-looking perspective on the major forces shaping Africa’s financial sector. Stay tuned as we continue to explore the evolution of digital financial services and the strategies that will define the industry’s future.

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References

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African Development Bank. (2023). Financial Inclusion in Africa: Trends and Insights. Retrieved from https://www.afdb.org/
GSMA. (2023). Mobile Money State of the Industry Report. Retrieved from https://www.gsma.com/
Allied Business Solutions Research & Business Development. (2024). Embedded Finance Market Statistics & Trends 2024-2033. Retrieved from https://www.absrbd.com/post/embedded-finance-statistic
Alloy. (2024). 11 Embedded Finance Stats for Banks in 2024. Retrieved from https://www.alloy.com/blog/11-embedded-finance-stats-for-banks-2024
360 View. (2023). The Power of Centralized Customer Data for Banks and Credit Unions. Retrieved from https://www.360view.com/blog/untapped-power-centralized-customer-data
Profisee. (2024). Customer 360 — What, Why & How? Retrieved from https://profisee.com/customer-360-what-why-and-how
McKinsey & Company. (2023). Integrated Channels: The Next Frontier Beyond Omnichannel Distribution. Retrieved from https://www.mckinsey.com/industries/financial-services/our-insights/integrated-channels-the-next-frontier-beyond-omnichannel-distribution
Salesforce ANZ. (2024). 10 Benefits of CRM in Banking. Retrieved from https://www.salesforce.com/au/blog/crm-in-bankin‍g
Stibo Systems. (2021). The Complete Guide: How to Get a 360° Customer View. Retrieved from https://www.stibosystems.com/blog/the-elusive-360-customer-view-why-its-needed-and-how-mdm-can-help‍