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Wow, 2020 was a year that all the rules in financial services markets were brought to a hold. Traditional financial institutions were faced with challenging moments. Walk in services, face to face or over the counter services were suspended or operated at 20% capacity due to the lock down restrictions. Such a move to the sector so a reduce in the quarter earning in all banks across the board.

As we move into the 2021, the financial sector need to rethink and repackage its service offer. Increasingly the walk-in services are becoming expensive as cost of doing business. Bank need are relocating their budgets into technology infrastructure setups and seeking partners to propel their existing. It can be predicted that in the next 2 to 3 years, financial institutions will be spending more than 45% of budget on IT infrastructure set ups and maintain support.

Today, it is noted that banks are now moving fast to embrace and transform their traditional walk-in service users to mobile app and web-based platforms. Most of the banking halls are limited with staff; as banks were organically forced to down side the non-critical staff and allowing other staff to work from home.

The Uganda market has not been left untouched, with only 21% of the population banked, institutions are slowly focusing the conversion of these individuals to mobile apps, USSD for feature phone users and to web-based platforms. Yes, this is possible for the bank since over 53% of the population in Uganda have access to mobile phone. It is not a surprise that the Mobile Network Organization (MNO) are making transactions that three times bigger that all banks combined in a month.  These companies have access to the numbers of registered users due to the alterative service offers predesigned in their business models.

The individual bank consumers are looking for convenience and less mindful of the cost of service. It is true that mobile based transactions are more expense than banking cost, the users of mobile services are happy with the service due to availability, reliability, outreach and presence in their remote areas of abroad. It is time for the banks, sector regulators to rethink the service delivery models for the common individuals and more so the unbanked 79% of the Ugandan population.

Changing trends in the financial sector - A wake up call for financial institutions
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