Digitization is a core part of Standard Chartered Bank's strategy

Standard Chartered Bank has restructured its operations to be lean focused, innovative, and prepared for growth. During a recent visit to Uganda, Karen Fawcett, the Standard Chartered Group, Chief Executive Officer - Retail Banking spoke to the New Visions, Samuel Sanya about the banks strategies to increase its revenues, customer service and cut its cost to income ratios.

Below are excerpts of what she said;

What proportion of your business in Uganda is Retail Banking?  What achievements can you share, despite the challenging environment?
 
We announced our strategy in November last year (2015) and it's all about getting ourselves lean focused, innovative, and preparing for growth. We are in about 70 countries in the world, but from the retail point of view we are in 30 countries and we are very clear on where we want to focus, which is the retail market, focusing on the white collar professionals, the urban affluent in the urban centers and you will really see us focusing building our capabilities in these big urban centers.
 
Retail banking here is about 30% of our business and it is a very important part of our business and Kampala, within Uganda is about 70% to 80% of the retail wallet. What we are aiming for is building our capabilities here in Kampala and allowing people to access from the rest of the country using our digitization. So the digitization platform is a core part of the bank's strategy across all our segments whether it is corporate or commercial or our retail clients. It is a matter of focusing on the digitizing, getting our clients processes sorted out and particularly, on the customers diligence - getting friendly with the client and positioning ourselves to help our clients get through these difficult times.
 
You announced a more  aligned strategy for Retail Banking across the Group last year - can you provide an outline of what this strategy entails, and how the Group's refocused approach will benefit Africa, and Uganda specifically?

 We have been very clear that when you look at our retail business, our cost to income ratio is too high. It's about 70% at the moment and it is started that we want to get to about 65%. We set out a path to 2021, to get this done. So it is gradual, but it is matter of us getting the digitization improvement and also changing the business mix.

So for example, here in the Uganda, the rules on Bancassurance have just been approved so we are going to be able to offer a wider range of insurance products to our clients. So we can expect that as the product mix changes with more wealth management, more advisory services to our clients and obviously we expect the mortgage sector to grow here, and that enables us to shift the banks performance as well.

 Looking at our branch network, there is an opportunity to save costs. In reality, client behavior is changing dramatically and we have put an awful lot of effort in building our digital platform, and we have focused on putting that in Africa first. Our first roll out of our AC mobile platform, which is a joint mobile and banking platform, was in eight countries in Africa. That is an example of how we are merging our need to be more efficient with meeting client needs. Since we launched that platform we have seen our online transactions go up 70% and we have had somewhere between 170,000 and 200,000 downloads across Africa.   

 
"Digitisation" is a catch phrase Standard Chartered seems to use regularly - what do you mean by "digitising your strategy", and again how is this going to benefit your clients in Uganda?

 
Digitization means, firstly, it is about on boarding our clients digitally - when you first come to us as a client, we need to get to know you; we need to do the KYC (Know Your Customer) and CDD (Customer Due Diligence).  

We can do that by asking you to fill out a piece of paper where you do ten signatures, just to make sure or we can do it on our work bench, which is our mobile app, which is coming into Uganda next year. This allows us to on board a client digitally; we take a photo of your ID card, we collect the character recognition automatically through that system, so we have done your CDD as a result of that and we collect all your details.

So no mistakes upfront and very quick; we use this system in Korea and we have launched it in 10 other markets around the world. It is also in Kenya, and Nigeria. In Korea, where our systems are linked end to end, we can on board a brand new client with a new account and an ATM in 5 minutes. Korea has very strong government data bases for the credit bureaus, for the taxation and for the social security; so if those are already in Uganda, we will be using them here as well.

The other thing we are doing is on our AC mobile platform to enable our clients to do transactions themselves. That is still on the front end. The next part of digitization is making sure that the processing happens seamlessly at the back end. So the client should never be aware of it. At the moment we can collect something digitally but it still has to be keyed into our system manually; so the backend is equally important.

 
How is Standard Chartered different?  Why should the people choose Standard Chartered over other Banks in Uganda?

 
We are unique as a bank globally. We have been in the emerging markets in Asia for 150 years; we have been in many countries in Africa for over 100 years. This is our home; Africa, Asia and the Middle East, we do not have a big market in the US or Europe. Africa is one of the most important areas in our strategy, we believe that we can add a lot of value to African economies; and we have a huge number of loyal clients that we can work with. We have clients that have been with the bank for more than 20 years.

We have clients who had their first account with us when they were 3 years old, 57 years ago. That's a long time to be with the bank. They are growing on their personal side as well as their businesses. So we have the ability to bank individual people and the corporates. We are doing this by making sure that across the businesses we bring in the right level of investment.

You have seen our digital channels here; we are going to be bringing in some new things like the touch ID for your telephone - we are in the testing period. We are bringing in bancassurance and video banking - we have that in some countries in Asia. We are a very conservative bank with high levels capital. We have a network across Africa and the Middle East to facilitate growing trade, if Africa is the door to China, then we have the key.

 
What are your plans for Retail banking in Uganda? Where to from here?

Bill winters, our group CEO, announced us investing $2b in the bank over the next 5 years, at least $1b is going towards retail banking. As you can see we have prioritized bringing digital innovations to Africa, we have brought the AC Mobile platform here first. So we are taking Africa very seriously.