Lowering cost of digital financial solutions by adopting innovative banking solutions

Malawi has experienced commendable digital transformation and increased access to financial services over the last 5 years. Most financial institutions have adopted digital technologies and innovative banking solutions to expand access to digital financial services.

According to the Reserve Bank of Malawi (RBM) figures released earlier this year on the uptake on digital financial services transactions in the country, there has been about 62.8 percent increase this year from the 39.9 percent observed in the previous year.

National Bank of Malawi plc has led this transformation with a 90% growth in digital services uptake over the last 12 months alone. Mo626 is arguably one of the countries most used applications.?

However, there are still a few challenges. Consumers cite high transaction costs as one of the reasons hindering them from utilising these services. A good example is business owners' lack of enthusiasm to encourage use of POS terminals in spite of the convenience it offers both the customer and the business owner.

“Most banks charge a small commission to cover the cost of the POS machine which is very high but is given to the business enterprise for free. We understand that this could be the reason behind the lack of enthusiasm,” NBM plc Digital Financial Services Head of Department, William Kaunda, said during a stakeholder engagement dinner at Ryalls Hotel by Marriot in Blantyre.

“As a market leader, it is important to understand the market and offer suitable solutions. As one way of lowering the cost of digital financial services, NBM plc is piloting Mo Pay, a digital platform for making payments. Our customers will now be able to use a smartphone to scan Quick Response (QR) Codes to send and receive payments through the Mo Pay platform to improve ease of use and cost efficiency, ’’ added Kaunda.

ICT Association of Malawi President, Bram Fudzulani, who also attended the event, has commended the bank for its efforts in digital and financial inclusion.?

“National Bank of Malawi is doing well as far as digital financial inclusion is concerned. We have witnessed the bank bringing together various stakeholders to discuss digital solutions offered by the bank, this will contribute towards the government’s program of mass digital literacy,” said Fudzulani.

Fudzulani added that National Bank of Malawi’s efforts will tap into the majority of Malawians that are unaware of the available digital services in the country. He also said the engagement programs initiated by NBM Plc combined with Cyber security literacy will ensure that Malawians are aware of the basic safety measures surrounding these digital services.