Financial institutions have been urged to employ smart fiscal strategies in their activities as this is expected to assist them to remain profitable, especially in this critical time of the COVID-19 pandemic.
This call was made by the Regional Chief Executive Officer (RCEO) for West Africa of the United Bank for Africa, Mrs Abiola Bawuah, at an Integrity Magazine webinar where she spoke on the theme ‘Effects of COVID-19 on Corporate Ghana: The Banking Sector.’
While urging financial institutions in the country to make long-term adjustments regarding a human strategy to keep their staff safe in the face of the crisis, she said that in addition to the economic contraction, banks have had to contend with a reduced transactional activity which is impacting on their fees and other income. There is therefore the need for strategies to curb these effects.
“COVID-19 has hit us hard but also presented opportunities to think outside the box and learn our lessons for future interventions. It is no longer business as usual in the banking industry. In addition to the economic contraction, banks are having to contend with a reduced transactional activity which is impacting on their fees and other income and therefore there is the need for financial institutions to increase awareness and focus on smart fiscal strategies,” Bawuah stated.
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Giving the example of UBA, she pointed out that the bank’s strategy of investing more in the digital banking products to compensate the traditional face-to-face banking for bill payment, purchases and deposits. According to her these has gone a long way to address the needs of customers during the lockdown period.
Explaining further, she said, “The recent lockdown has increased awareness and focus on digital banking products to compensate the traditional face-to-face banking for bill payment, purchases and deposits. On our part in UBA Ghana, we adapted to every possibility technology presents. We upgraded our digital banking platforms and also revamped LEO, our virtual banker, which was painstakingly developed to answer the call of the time where little or no human intervention is required and as Ghana’s first virtual banker. LEO is an answer to improved customer service and remains the best thing to happen to Ghana’s financial sector during the pandemic,” Bawuah said.
Speaking on the general effect of the pandemic on the economy, she noted that Ghanaian economy like most other African economies was significantly affected in the area of reduced demand of global oil, reduced international trade (both imports and exports), and inflows of foreign direct investment. Also, there was a decline in demand for tourism, travel and hospitality services. This, she explained, has further resulted in a depreciation of the cedi as well as an increase in the inflation rate.
“Ghana like many countries is fighting to minimise the effects of the virus on health, economy and its social systems. Government’s approach for handling the pandemic reflects the situation that, not only human lives are at risk, but the wellbeing of our markets and industries,” Bawuah told viewers at the webinar.
“The banking industry as the backbone of the financial sector has felt the full effects of the economic impact of the pandemic and this pandemic should refocus our operations and help us reposition our product offerings,” she said.