Plunged into a severe recession, accentuated by the health crisis and the sharp drop in oil prices, Algeria could be forced to resort to external debt. Anxious to preserve its sovereignty, Algiers has so far excluded all financing from the International Monetary Fund. But it may better to go early, while it still has room to negotiate terms.
South Africa’s digital Bank Zero: on track to launch despite pandemic
Bank Zero, the digital bank which in 2019 postponed plans to launch in South Africa until mid 2020, says it still plans to become operational in the face of COVID 19.
“We are still on track to launch,” the bank’s co-founder and executive director Lezanne Human told The Africa Report, without giving a date. “The benefit of being a digital bank is that we can work remotely very easily,” and the group’s disaster recovery program can be carried out remotely. As a precaution, the bank’s team went into self-isolation a week before South Africa’s lockdown started, said Human.
The lockdown may work in favour of new players like Bank Zero. According to research from BrandsEye covering the period from 1 March 1 to 2 April, South Africa’s banks are struggling to respond to consumer queries online.
BrandsEye found that in six South African industries, social media conversation has increased by nearly 150% since President Cyril Ramaphosa declared a National State of Disaster on March 15. Across all industries, the rate of response to customer posts that require attention dropped by 26.6% after 15 March. Banks suffered from the largest response rate drop of 39.2%.
BrandsEye CEO Nic Ray told The Africa Report that banks and insurers have been slow to make the shift from using social media as a marketing channel to a customer service channel.
- “COVID-19 will force organisations to revise the ways they serve their customers and place a greater emphasis on digital channels,” he says.
- But separating the noise from the critical messages is a challenge that the financial services industry has yet to meet.
- “Too many banks and insurers still rely on systems that do not filter and then prioritise incoming social media conversation.”
Now is the perfect time for banks and insurers to invest in advertising to a captive, locked down audience about the merits of digital channels, says Nolwandle Mthombeni, investment analyst at Mergence Investment Managers in Cape Town.
- Within the financial services sector, banks stand to benefit more than insurers from a long-term shift to digital channels, she says.
- “Insurers are only contacted if there’s a claim and under those circumstances, some clients prefer face-to-face contact,” she says.
Social media teams need to be given greater responsibility, says Ray at BrandsEye.
- “Financial services firms must upskill social media teams and provide them with the requisite permissions to answer and resolve customer queries.”
- The asynchronous nature of digital channels reduces the cost of providing service and provides a better experience for customers, Ray says.
- Banks and insurers that had already begun investing in digital customer service capabilities before the pandemic will have a head start once lockdown ends, he adds.
- “The organisations that have not will find it challenging to procure and onboard new systems in the current crisis where business continuity is paramount.”
Bottom line: Banks which treat social media as a channel for customer feedback, and not just as an advertising platform, will be best placed for life after COVID.