African Regional Preparatory Conference for the WSIS

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African Regional Preparatory Conference for the
WSIS
Accra, 29-30 January, 2005 Break-out Session D
Sectoral e-Strategies

• e-Banking and Financial Services

Oumar Seck Executive Director Regional Programme
Coordinator Enterprise Africa
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ICT the Financial Service Industry Nature of
the Interface

• FI delivery tools / financial products services
• ATM, internet banking, mobile banking, home
  banking
• e-wallet or e-cash ( cash card, payment card,
  credit card, smart card)
• e-financial information (securities, loan rate,
  mortgage rate, analyst, ..)
• e-BPP
• e-clearing and collections (checks, drafts,
  receivables)
• e-borrowing, investment, advisory services

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e-Finance Landscape
e-financial services
e-finance platforms
Financial Services Providers
Customers
Financial Conglomerates Global Money Center
Banks Specialized Financial Services
Providers National Treasurer Central
Banks Utilities Companies

• ATM
• Internet Banking
• Mobile Banking
• Home Banking
• e-wallet
• Cash card
• Payment card
• Credit card
• Smart card
• e-clearing
• e-financial information
• e-BPP
• POS

Consumers Businesses Financial
institutions Government Ngos International
Organizations

• Financial Portals
• Aggregator
• Broker
• Content creator
• Market-maker
• etc
• e-trading
• e-banking
• e-investment
• e-stock exchange
• e-derivatives exchange
• e-insurance
• e-clearing system

Access Devices
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ICT the Financial Service Industry Nature of
the Interface

• FI back-office system
• Transaction processing
• Credit administration
• Investment administration
• FI financial decision-making perspective
• Informational finance
• Computational finance (pricing, risk modelling)
• KM and CRM
• Treasury integration
• Netting, X-currency pooling
• Trading (securities, derivatives)
• FSI is one of the most ICT-intensive industry
  among all non ICT industries.
• (above 200 Billion in ICT spending in 2005)

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Financial Institutions ICT Portfolio
Strategic (positioning, first mover) (e.g. home
banking)
Informational (control, integration, quality,
decision-making) (e.g. CRM software)
Transactional (cost reduction, throughput
increase) (e.g. ATM)
Infrastructure (base foundation of shared ICT
services) (e.g. Global router network)
Source adapted from Weil Broadbent, 1998
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Defining an e-Strategy for the African Financial
Service Industry

• Challenges
• Strategic objectives
• Strategic action plan

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Challenges of the African Financial Service
Industry

• Low banking / financial services penetration
• Low savings mobilization,
• Limited institutional term-finance
• Limited functional efficiency
• Limited allocation efficiency
• Limited depth and width, rudimentary financial
  infrastructure
• Limited access to international capital and risk
  management market
• Limited cross-border capacity of national
  economies
• Huge financial industry gap compared to advanced
  and other emerging economies
• Repression against SMME
• Limited access to SMME information
• Fragile and non-integrated national financial
  systems

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Action Plan for the African e-Finance Strategy

• Building the foundation of an e-Finance industry
• Information infrastructure (network layer
  service infrastructure)
• Human resources (engineers, technicians, skilled
  workers, and ICT economists)
• Promoting the functional efficiency of the FSI
• Incentives for back/front office ICT investment
• Global, regional and national ICT connectivity
  and compatibility (e.g. FinNet in Hong Kong) of
  the FSI
• Dematerializing financial securities and other
  trade finance related papers / documents
• Supply of ICT solutions

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Action Plan for the African e-Finance Strategy

• Promoting the allocation efficiency of the FSI
• Benchmark and adopt ICT-enable SME financing
  schemes (e.g. SMEloan scheme in Hong Kong, Pride
  Africa, CitiBusiness Direct) and Micro-finance
  schemes (e.g. Planet Finance, ACCION
  International, Gemcard , Standard Bank)
• Promoting policy / regulatory / judiciary
  measures to preserve and deal with information
  security issues
• Violation of personal information
• e-signature
• Promoting e-Finance related know-how transfer
  through
• Industry and competitive intelligence
• Benchmarking of good practices within and outside
  Africa
• Capacity building

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Action Plan for the African e-Finance Strategy

• Developing clusters of ICT-based businesses that
  would support the e-Finance industry
• Targeted FDI and JV
• ICT business parks
• Mobilizing financial resources regionally and
  globally to implement the strategy with the
  following precautions
• Funds mobilized for Africa must be earmarked and
  effectively disbursed for Africa
• Disbursement and programme / project management
  activities must be managed by Africans or
  Africa-based institutions