By: Anthony Sedzro
Interoperability, which is the ability of one subscriber to send money from one network operator to another should be pursued seriously by Ghanaian banks. As non-bank “FinTech” companies are disrupting the industry with major technological innovations, banks must partner and collaborate more to bring about interoperability to ease banking procedures for customers. This is according to Hasan Khan, Global Head, Transactional Products & Services, Standard Bank, who is on a working visit to Ghana.
“One area of banking that is evolving rapidly is Interoperability,” Khan told journalists at a special media session Kempinski Gold Coast Hotel in Accra on March 28.
“Banks have to allow for the customers to be able to do seamless transactions between different financial institutions and lowering the barriers that are currently in place. So if you think about direct debits, if you think about settlements that happen between the banks, the customer experience in moving funds from bank A to B or in paying a supplier or buyer between two different financial institutions is not the same as if they were both the same financial institution and that is because the interoperability that exists between the banks is not what it needs to be,” Khan explained.
He said that banks and regulators each have a role to play to ensure interoperability.
“…There is a role both the banks and the regulator need to play…so the banks need to be a lot open, in terms of their design and their thinking around allowing this to happen, with the level confidence that says they can separate different client offerings to a client based on their relationship with the client and how they price products”.
He continued: “Not allowing or making it difficult for the bank to do it doesn’t provide the answer to the question. Yet the regulator needs to continue the work that it is doing in terms of putting down some of the frameworks and design principles of how the banks will get to that stage and making sure that it is adhered to,” Khan added.
He commended Ghanaian regulators for been progressive.
Speaking on the same platform, Vinod Madhavan, Head, Transactional Products & Services for Africa, Standard Bank said other aggregators also have a role to play.
“One of the areas where emerging markets actually can bring is reducing friction in transactions. This friction just increases the cost of doing business…For any FMCG or any business-to-consumer corporate, the big chunk of their effort and initiative is lost in trying to invoice someone, collect money, and reconcile the money that has been collected so they can continue to do business with the counter party. There is whole set of services there which could be simplified through interoperability and which could be handled by aggregators. Aggregators can actually facilitate the industry to adopt that effort through mandate management, through the fact that all the banks are expected to participate in the same level of efficiency,” Madhavan said.
“So that is how you bring about the GhIPSS which is working on trying to see how they can roll out and adopt Instant Pay as a terminal. Instant Pay is great in reducing friction; I can transfer money from here to you almost in real time. So that is one aspect of how we can work to reduce friction,” Madhavan added.
Both executives explained that Stanbic Bank Ghana occupied a very central role in Standard Bank’s Africa operations and the bank will take digitisation seriously going forward. Standard Bank will also open a full-fledged branch in Cote D’Ivoire by July.