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African Development Bank spearheads exchanges on Digitalization

The African Development Bank (AfDB) organized, on February 11, the third virtual webinar on the acceleration of digitization in financial institutions in Africa, the objective being to discuss issues related to this digital acceleration and the adoption of digital financial services since the arrival of the coronavirus pandemic.

This meeting, dedicated to banks and microfinance institutions, is part of the technical assistance program for the financial sector of the European Investment Bank (EIB) for Central and West Africa.

According to the AfDB, before the pandemic, the digitization of financial services had already advanced rapidly for more than a decade, in particular thanks to the rise of FinTech companies, of mobile network operators offering innovative digital products, and also to the increase of electronic commerce. In addition, traditional banks and microfinance institutions were catching the digitalization train, albeit at a mixed pace on the continent.

This webinar focused on several questions including: how has the Covid-19 crisis accelerated the implementation of digital solutions for the provision of financial services? ; how has traditional project planning been shortened? With what challenges, risks and results and what lessons have they been learned ?; how did financial institutions start to prepare for the “new economy” triggered by the increasing diffusion of digital solutions?

In addition, there are issues related to the emergence of electronic commerce, the positioning of financial institutions in the digital landscape in order to compete or cooperate with new players who have also been at the heart of the debates.

For the AfDB, this crisis has, in fact, led companies in general and financial institutions, in particular, to accelerate the adoption of digital solutions, in order to reduce physical contact between their staff and their clients but also to reduce costs in a context of reduced business volumes, interest rates and, in the case of lenders, increased credit risk. This process is accompanied to varying degrees by measures taken by regulators to promote digital payment transactions and services, the virtualization of the workforce.

“Financial institutions, in particular, have been pressured to implement digital solutions much faster than would have been the case under normal circumstances, sometimes reducing their planning horizon from 2 to 3 years to just 3 years. at 6 months ”, indicated the AfDB’s Making finance work for Africa initiative.

The meeting was attended by members of financial institutions from Central and West Africa.