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The evolution towards e-commerce of foreign currencies in Africa, although slow to start, is now gaining considerable ground.
In South Africa, just five years ago, nearly 90% of all foreign currency transactions took place over the phone. Today, despite the challenges of illiquidity and complicated political and capital control environments, about 75% of transactions are conducted digitally, with only 25% on the telephone.
With 57.6% of the 174 million mobile money accounts registered worldwide in sub – Saharan Africa, the continent is becoming a global leader in financial technologies in general, and mobile money in particular. While African citizens and businessmen do business on a global scale, the highly developed Fintech culture of Africa not only deepens on the continent, but also emigrates from l & # 39; Africa.
The currency flows that the growing African fintech culture supports are very important to the continent's financial service providers, most of whom develop fintech capabilities or badociate with the most popular or successful African fintechs to make sure they capture this stream.
Standard Bank has been an integral part of driving this fast-moving digital move into Africa's currency trading landscape.
To function effectively as a market maker, we need to supply liquidity to the market. We must also, instantly, formulate risk-based prices in a world in constant evolution. Subsequently, we must distribute the prize.
In Africa, this requires developing solutions that allow individuals, businesses and institutional clients to access foreign exchange markets in several jurisdictions. At the same time, in most markets, "we also need to show central banks what we do," Hutchinson adds. All transactions must be transparent and electronically traceable so that local authorities are ready to approve digital transactions.
Today, banks must not only provide the systems and networks to facilitate basic transactions, but also provide information and advice beyond pure execution by offering complementary services based on value. settlement capacity. For example, searching for foreign currency is becoming an important requirement for customers. Having on-the-ground experience and local expertise as well as the ability to deliver this digitally, "differentiates Standard Bank's distribution capabilities in this regard".
In addition, banks are increasingly required to inform and guide their clients in the broader economic, legal, and political contexts in which transactions occur. For example, one of the considerations in the development of Standard Bank's digital capability was how to combine market intelligence and research with real-time pricing, trade execution and after-sales services. Today, it is not enough to run transactions. It is equally important that we advise and inform the wider universe in which the exchanges occur.
Technologically, Regulatory Technology (Regtec), for example, helps Africa manage new regulatory developments in highly currency-controlled environments. Likewise, the rise of Robotics Process Automation (RPA) and Artificial Intelligence (AI), "has allowed Standard Bank to develop solutions that go beyond the problems of the world. traditional affairs ".
Digital commerce in Africa is also changing very often very differently. We found that it is not just about importing developed country systems. Our approach with customers is to work with them to help understand their internal needs in terms of governance and operational efficiency. We then collaborate with customers to develop and implement digital solutions that meet the needs of their business.
Standard Bank's own Business Online (BOL) platform provides an example of how the bank has developed digital transaction capabilities that exactly meet the needs of customers. BOL, for example, allows customers to view balances across the continent while making third-party currency payments and supporting general cash management. This type of enterprise-wide digital vision and cash-flow capability puts control back in the hands of customers while allowing customers, rather than the bank, to manage their business. own cash flow.
be able to offer customizable solutions to clients who manage money on behalf of their investors. Standard Bank's investment in the Application Programming Interface (API) technology, for example, exactly follows the growing ability of its customers to integrate these capabilities into their own systems.
On the distribution side, Standard Bank's SHYFT application – a digital portfolio allowing global transactions in USD, EUROS, GBP and Australian dollars – has extended this element of control to the man of the street. SHYFT has been recognized globally and locally for its innovation.
Standard Bank presents a very interesting, unique and globally competitive digital trading proposition to local and developed clients seeking access to Africa. Our footprint across 20 territories – most at different levels of digital development – provides a compelling pan-African proposal for global and local customers.
While Africa 's track record in digital adaptation and innovation is impressive, the technological part is often the easiest part to implement. The human and cultural systems, and the changes in customer behavior needed to bring this digital evolution to life – such as making customer badog systems start pricing for transactions to be visible 24/7 – are often more difficult to achieve. In short, bank employees, customers and regulators must all undergo fundamental cultural changes in their way of doing and understanding the world.
It is often these changes in culture and market that Standard Bank uses a pan-African bank adviser as clients seek to understand and engage Africa effectively. Given the rapid pace of digital change in Africa's various markets, customers, legislations, and cultures, we must balance customer value and efficiency – and regulatory pressures to be more transparent – with what is, in the long run, the best. the market.
As a pan-African bank implicitly committed to the growth and success of the continent, Standard Bank's digital journey requires a clever blend of world-developed technologies and African insight and innovation. This mix should be able to balance customer needs and legislative oversight in the development of efficient and inclusive markets that support long-term growth.
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