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Banks retooling for 4IR

THE Institute of Bankers of Zimbabwe (IOBZ) last week held its annual summer school in Victoria Falls where the issue of the opportunities and threats of the Fourth Industrial Revolution (4IR) came under focus. Deputy business editor Kudzai Kuwaza (KK) caught with the IOBZ chairperson and People’s Own Savings Bank (POSB) chief executive Admore Kandlela (AK), to discuss a number of issues which include the Summer School, opportunities and threats of the 4IR and the level of progress in terms of the planned privatisation of POSB. Below are excerpts of the interview:

KK: Your theme for this year’s Institute of Bankers of Zimbabwe Summer School was The Fourth Industrial Revolution: Opportunities and Threats: Can you elaborate on this?

AK:  The 4IR is all about trying to adapt to the changes in technology ever since the First Industrial Revolution, which was during when we were using the steam and water engine.  The Second Industrial Revolution was when production was used to mechanise processes using electricity. The Third Industrial Revolution was now about mass production and automating the whole process of production. Then now in the Fourth Industrial Revolution, we are seeing a situation where there is a seamless relationship between the physical, technological and the biological. You cannot quite differentiate whether one is operating away from a physical building. So the whole theme of the Summer School was how this 4IR is affecting the banks. The first thing we realise is that this is now calling for new training of all the bankers. We have to retrain. We now need employees who are technologically savvy, economically savvy, socially sensitive and also who can deal with the digital aspects of the banking sector.

KK: What are the opportunities for bankers in the 4IR?

AK: The opportunities are immense. As bankers, we used to do diplomas which we now have to think again about. Our diploma did not have aspects such as crypto currency, never had digital aspects of banking, never had cyber security. Now we are saying the opportunities are there to retool and reskill. This literally means we have to retrain people and we need to up skill, which means we have to uplift their skills to the necessary levels. The opportunities mean that unfortunately we are going to use less labour but with more productivity. We are reaching out to the target person who is the customer. The customer will have less trouble in enjoying the banking services.

KK: You talked about less labour. Does this count among the threats of the 4IR?

AK:  Yes. This is a big threat.  There are certain skills that are needed and that is why we are saying that when you move over to adapt to the 4IR, there are certain banking skills that will be required. You now need these guys to retrain. What we are seeing within the banking sector is that we have identified challenges that we face like when there is interface with a customer, you find that in terms of information knowledge, there is a knowledge gap.  You may have a knowledgeable customer and interface with an unknowledgeable banking adviser.  Imagine what happens. It means that we have to change things. Then we have the knowledge gap where you find that both the adviser and the customer are not knowledgeable.  This is where the government has to intervene through commissions like the Consumer Council of Zimbabwe, but in some other quadrants we are saying we are able to intervene and assist the situation. This is in terms of knowing our products and how to up skill the customers as well.

KK: How would you describe the year 2021 in terms of attendance of the IOBZ Summer School?

AK: I will tell you one thing that has happened. From the last conference we had in 2020 I think this has been a better year in terms of outturn. Because we are seeing a lesser impact of Covid-19, the outturn at this conference had over 100 delegates that have attended this year. Last year we did not even have half of that. Last year it was held partially virtually and partially onsite. This year we have done the same.

KK: What are your plans for IOBZ in 2022?

AK: Obviously realising that the 4IR is coming on, it is going to have a huge impact on the banking sector. We have to think of the relevance of our diplomas. We are relooking that. We have entered into partnerships with both foreign and local universities. So in future you will see long-term degrees, such as that of an MBA coming up as well as shorter-term qualifications, which we will introduce to upscale our staff and avoid retrenchments.

KK: Now to take you to the aspect of your bank POSB, you are undertaking a digitalisation programme. How far have you gone with that?

AK:  Well I will tell you that POSB has automated most of its processes. We are now paperless. If you want your statements or moving things, we can do it digitally. Now what we have just done is that we have done a tender and have offered services for an omnichannel. An omnichannel is going to provide us with a situation where you can do Whatsapp banking and you can use artificial intelligence so that our customers will be able to interact with our technology during that digital process. So as POSB, we are not left behind. We are moving and I think what lends credence is that you guys at the Zimbabwe Independent have awarded us looking at the transformation of the sector. We are quite proud of that. We are happy that the market is watching and is actually recognising our efforts.

KK: Of course there is the unfortunate aspect of having to reduce labour. How many have you retrenched in terms of digitalisation programme?

AK: Ever since the financial crisis, which was around about 2008-2009, POSB saw this coming. Being a responsible bank, which aspires to various aspects of responsible banking, we knew it was going to come. So what we did is that we never moved our establishment much from the staff complement of 300. The only time we retrenched was in 2009. From then on we have been using a fusion of contract workers and permanent staff. That has carried us on to the present day.  So you will see that you will not be seeing much retrenchment.

KK: How much progress have you made with your privatisation programme?

AK: Well we have progressed pretty well. We have, as you are aware, awarded a tender and have carried out a situational analysis. We are currently holding consultations with key stakeholders within government and after that we are going to submit that document before the end of the year to Cabinet for a decision in terms of the modus operandi of privatisation. Obviously within our Act, it is embedded that we have a portion of our shares going into the private sector and the options that are open to us are an initial public offering and private placement. So anytime from now, once we get the concurrence, we are going ahead with it.

KK: What time frame have you set for this?

AK: What usually happens is that from the time you inform the Zimbabwe Stock Exchange, they will need about three months to consolidate the register and see the kind of customers and all that. So give or take we expect it to happen in the early part of 2022. Because you remember there is the authorisation from the Cabinet and there is also the festive season

KK: What are your plans for 2022?

AK: It will be a logical sequel of what has transpired. You will remember that POSB was a parastatal and we had to commercialise it which is what we have done. Then after we have commercialised it we digitalise it, now we are in the process of trying to privatise it which is bringing in a private sector partner. The thing is that this bank, going forward as a savings bank, if we maintain it with its momentum, we will  be one of the biggest banks in this country. It has been proven in other countries where you see savings banks grow. In Belgium, the Belgian Savings bank is one of the biggest banks. In Nordic countries you see that the savings banks become some of the biggest banks if you fuse the private public partnerships properly.

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