Sazini Mojapelo, Absa Group Head of Citizenship and Community Development
How digital transformation can be shaped to create a more inclusive and socially responsible world.
Globalisation has facilitated easy access to information and the deepening connectivity among nations, cities and villages. Over the past decade, as a response, the banking sector has evolved to create business ecosystems and facilitate lifestyle solutions for its customers to transform and adapt to the rapid pace of digital transformation. Equally so, the interconnectivity of people has created a platform for the rapid rollout of disruptive technologies which has had its own challenges and consequences.
With the rapid development of technology in society the world is increasingly faced with new ethical questions. Such as what will be the impact of automation on employment and the general social fabric? How will increased isolation and lack of social bonds impact on levels of depression?
Absa’s roles as a good corporate citizen and an active force for good enable us to consciously think of ways to shape digital transformation in a way that will contribute to the creation of a more equitable and socially responsible world.
At a global level, It is worth noting that a task force of the United Nations Development Programme (UNDP), co-chaired by Achim Steiner, was mandated to investigate the changing nature of the financial market and how its digitisation can enable the achievement of the United Nations’ Sustainable Development Goals (SDGs). A look at the disruptor economy from a financial markets point of view, will show that it offers more choice and value to consumers.
Greater access to financial services has been deemed to be a key enabler for SDGs and by providing financial access to individuals and small businesses that were previously excluded, mobile money has been a positive disrupter in Africa. One of the many benefits of mobile banking is its socio-economic impact. Mobile money solutions have allowed migrant workers to conveniently send money home by facilitating access to low-cost remittances. Crowdfunding has managed to unlock the potential of capitalisation of projects that would otherwise struggle to raise money from a single financial institution or a few investors who might have a singular business focus.
It is important that we look carefully at how the digitisation of money unfolds. Peter Drucker in his seminal work, makes a distinction between efficiency and effectiveness. He notes that efficiency is doing things right; while effectiveness is doing the right things. What we should seek to achieve is a digitalisation process that will lead to more effective financing: where capital is directed towards sustainable development and includes everyone. This cannot be achieved without a fresh approach to financing. We have a window of opportunity to ensure that the sweeping advances of the fourth industrial revolution help governments, business and society to be more effective in their approach.
This will entail mitigating adverse consequences of change and adopting a bias towards the positive social and environmental benefits.
Africa is a hotbed of innovation that will influence much of the financial digital revolution. Projects being pioneered by African fintech companies include new payment mechanisms, cheaper delivery methods and leveraging data to improve credit scoring and access to basic financial products. Established banks and financial services providers initially saw these disruptors as a threat, but now see them as partners to engage, to integrate each other’s system for the mutual benefit of society.
African technology and financial institutions must continue to innovate to address customer needs and embrace cutting-edge technology to create efficiencies and to improve customer experience. This technology will also enable them to automate their processes seamlessly to achieve improvements in frontline productivity and open new streams of revenue to remain competitive.
In embracing the digital revolution, caution should always be taken to avoid making decisions that will only make financial systems more efficient but in the process bar new entrants from meaningfully participating in the mainstream economy. The digital transformation will become meaningless if it contributes to the status quo of unsustainable growth and misses the opportunity to find solutions to poverty, environmental degradation and bridging the inequality gap.
The UN task force ultimately seeks to answer some of the new ethical questions to which digital transformation has given rise.
As spokes of the global financial system, banks are grappling with fundamental questions around their licence to operate. In a new digital age good corporate citizenship necessitates that we reimagine a society where the state, capital and society operate in a manner that seeks to find solutions to societal challenges such as employment, poverty and inequality, in an effort to build intergenerational equity.
These solutions should ideally encompass increased access to finance, with a bias towards the most vulnerable groups in society, so that they too can be elevated towards economic development and independence. Much creative thinking remains to be done about how the upstream effects of the digital revolution, especially on financial services, can advance the achievement of SDGs, particularly in Africa.
African industries and policy makers have the capacity and platforms to not only innovate for solutions to the challenges of the continent, but are uniquely placed to lead innovation that will ultimately shape the world.