A report on the digital transformation of banks in Africa for the year 2023, published by the African Banker magazine and the financial technology platform Backbase, has revealed that only 28% of African banks spend more than $3 million per year on digital transformation and innovation.
Indeed, a quarter of these banks spend less than $300,000 annually on digital transformation, the same source added, explaining that only half of African banks consider digital transformation as the most important factor for their growth strategies.
Thus, the report noted that despite the opportunities offered by the Covid-19 pandemic, the pace of digital transformation continues to be “steady” rather than “accelerated”, adding that this transformation is still driven by factors such as the desire to increase profits, customer demand and the risk of being outpaced by competitors.
Furthermore, the study pointed out that 40% of respondents see fintech and telecom companies as risks, given that telecom companies provide financial services and do not rely on mobile access as is the case with digital banking.
The same study revealed that only one-fifth of banks consider themselves to be “digital natives”, while the rest see their strategy as one of “envelopment and digitalization”, consisting of gradually replacing the existing infrastructure.
In addition, the proportion of banks where the chief executive officer (CEO), president, managing director, vice president, or other director determines digital strategy and spending levels has increased from 15% to 35% over the past year, the report said.
This 3rd edition of the report, which is produced annually by African Banker magazine and banking technology developer Backbase, is based on a comprehensive survey of a record 153 banks on the African continent.