What are the benefits of DFS ecosystem partnerships and to what extend can they impact on financial inclusion? To enhance our financial services and in order to reach the marginalised, it is imperative that we make an effort to create a digital financial services partnership ecosystem which will include stakeholders such as the identity authority (Registrar-General), Mobile Network Operators (POTRAZ), Financial Clearance Bureau (FCB), Finscan and Salary Services Bureau (SSB). These integrations will address the following challenges that have been a hindrance to financial inclusion efforts;
- Financial frauds through identity theft.
- Improve customer experience through online account opening and credit application.
- Better compliance and regulatory management through automated KYC and AML checks.
- Better data insights for decision-making as accurate information will be ready on demand.
- Lower operational costs – cost-income ratios for Zimbabwean banks are in excess of 70% which is higher than regional averages, making our market uncompetitive.
Figure 2: Proposed Collaborative Framework by Stakeholders (Source: Author)
The above proposed framework is made up of critical stakeholders that have a bearing on the status of financial services in Zimbabwe although the list of ecosystem providers is endless. Similar attempts to setup a DFI ecosystem have been done in neighbouring countries such as Kenya and Rwanda and with much success. It is my humble view that Zimbabwe can learn from the experiences of these countries that have made significant strides in creating DFI ecosystem partnerships.
Kenya – The government of Kenya has implemented the Huduma integrated government service model encompassing civil registration, financial services and all other government services. Huduma is an integrated service delivery, one stop shop that allows one to access government public services in an efficient and courteous environment. This means one will be able to get birth certificates, national identity cards, passports, get a sim card and register a business in one place and immediately open an account from the same centre. One of the most significant barriers of financial inclusion in parts of most African countries has been and remains inaccessibility of these services. The first Huduma Centre was launched in 2013 and it is through this Huduma Ecosystem that one can open an account at a bank of their choice and get credit easily in the comfort of their homes.
Rwanda – The government has developed the Irembo integrated government services model with various technological capabilities. Rwanda is also investing intensively in connectivity and digitalisation of all facets of the economy which is of interest. The initiative by the Government of Rwanda is aimed at achieving financial inclusion and improving its service delivery to the citizens and businesses. It is the one-stop portal for e-Government services as well as financial services. Its role as a platform is the provision of Government services online with ease, efficiency and reliability. The word Irembo means gateway or door and represents literal access. The Irembo brand is welcoming, user-friendly and open.
Government or private sector players can lead the implementation of a DFI Ecosystems but in most jurisdictions, it is the government model that has prevailed. Legislation is the single biggest enabler of DFI Ecosystems in most African countries. In the case of Zimbabwe, it is understandable that legislation may be lagging behind in terms of creating the enabling environment for digitalisation to be effected. Unlike other European markets, it is critical that stakeholders’ including the Government of Zimbabwe work together to improve data access as that is fundamental to improving the access and quality of financial services for all including the marginalised. It is also gratifying to note that a few of the initiatives being recommended are in line with the open banking principles which are being worked on to improve the operating environment. In as much as we are aware that in some cases the enabling legislation is not yet in place, we recommend a ‘test and learn’ approach which has been key to enabling some of the market-changing initiatives which have transformed other countries’ financial services landscape.