digital_banking_innovation_and_transformation_oct_2025_p_1.pptx

Oct , 2025
Addis Ababa, Ethiopia

CaFEC
Digital is the new Black.
It seems to have taken over our lives, both personal and
professional -
smartphones, tablets, eBooks, digital newspapers,
digital storefronts, doctors tweeting from operation
theatres, digital ecosystems in our living rooms, digital
notes, mobile commerce, digital media libraries,
digital payments and even digital supply chains!
Digital is the new Black.
(A NEW ERA OR AUTHORIZER OF THE WORLD, POPULAR, DOMINANT, FUNDEMENTAL)
It seems to have taken over our lives, both personal and
professional -
smartphones, tablets, eBooks, digital newspapers, mobile
commerce, and digital payments!

Introduction
Digitalization
The use of digital
technologies to change
a business model and
provide new revenue
and value-producing
opportunities
Digital banking
The transformation of
traditional banking services
into digital formats, enabling
customers to manage their
financial accounts, conduct
transactions, and access
various banking services
through online channels
Digital
Transformation
• Comprehensive integration of
digital technologies in to all areas
of a business, Embraces new digital
methods to improve efficiency,
innovation, and competitiveness

The Digital banking ecosystem
Digital banking today is not just a channel—it is the bank itself
 The ecosystem is built on an interconnected architecture that enables
seamless, smart, and secure financial services.
 It is customer-centric digital interfaces, real-time processing,
comprehensive data and security infrastructure, and open integration with
third-party services, all driving a transformative banking experience

The Need for Modern Banking
Conventional banking framework
 Physical Branch Network
 Standardized Products
 Limited Operating Hours
 Focus on Local Markets
 Cash Handling
 Credit Assessment Process
Contemporary banking models
 Digital-First Approach
 Enhanced Customer Experience
 Integration of Fintech Solutions
 Open Banking
 Omnichannel Banking
 Agility and Innovation
 Focus on Sustainability
 Alternative Lending Models

Digital Banking Trends
Branch
as the primary
access point
Self-service
banking
Emergence
of the smart
phone
Banking
everywhere,
never at bank.
Bank 4
Bank 3
Bank 2
Bank 1

Banking model of the past
CaFEC

CaFEC
Banking model of the present

Challenges of Digital Banking Transformation
While the benefits of digital
transformation in banking are
significant, there are also several
challenges that need to be
addressed in order to successfully
navigate this transition.

0
1
Security concerns
02 Legacy system
integration (the difficulties in
connecting outdated, established
systems with modern applications
03 Regulatory
compliance
limit issue)
04
Customer
adoption and
experience
05
Operational disruption
and increased
competition
Challenges of Digital Banking Transformation

Digital Banking transformation
The main objectives of the digital transformation
Improve
operational efficiency
for
by
digitizing
processes
Maximize customer value &
expand outreach through
leveraging on digital
channels
Increase
effectiveness of
operations
Additional revenue by
introducing more
digital products &
services
Cope with competitive
pressure from other
financial service
providers
Explore new market
opportunities

Digital banking transformation Framework
Discussion Questions
–What qualities do you think are essential for a leader to
effectively guide digital transformation in a bank?
–How can banks ensure that their employees are continuously
developing the skills needed for digital transformation?
How can banks balance visionary leadership with the need for
operational efficiency during digital transformation?
–In what ways can a lack of leadership commitment hinder
the success of digital transformation initiatives?

–Why is it important for banks to place customers at the center of
their digital strategies?
–Can you think of an example where a bank successfully improved
its services based on customer feedback?
How can banks leverage advanced technologies like AI and machine
learning to enhance customer personalization beyond traditional
methods?
–What are some potential ethical considerations when using
customer data for personalization in banking services?

–What does it mean for a bank to be agile, and why is this important
in today’s fast-paced digital landscape?
–How can implementing agile methodologies improve the
development of new banking features?
–How can banks maintain agility while ensuring compliance
with regulatory requirements that may slow down innovation?
– What are some challenges that banks might face when trying to
foster a responsive culture, and how can they overcome them?

 CUSTOMER CENTRICITY
Placing the customer at the center of all strategies and operations is
vital for successful digital transformation.
•Personalization: Using data to tailor products and services to
individual customer needs.

 AGILITY
Agility involves the ability to adapt quickly to changes in the market,
technology, and customer preferences.

 COLLABORATION AND COMMUNICATION
Effective collaboration and communication across departments are
essential for cohesive digital transformation efforts.
• Cross-Functional Teams:
Forming teams that include members from different departments (e.g.,
IT, marketing, compliance).
• Transparent Communication:
Maintaining open lines of communication throughout the organization.

 DATA-DRIVEN DECISIONS
Leveraging data analytics to inform strategic decisions is crucial for
effective digital transformation.
• Data Analytics Tools:
Implementing advanced analytics tools to extract insights from
customer data.
• Performance Metrics:
Establishing key performance indicators (KPIs) to measure success.

 CYBERSECURITY
As banks digitize their operations, ensuring robust cybersecurity
measures is paramount to protect sensitive customer information.
•Risk Assessment: Regularly evaluating potential cybersecurity
risks and vulnerabilities.
•Employee Training: Providing training on cybersecurity best practices
for all employees.

 INTEGRATION
Integrating various systems and technologies is essential for seamless
operations and enhanced customer experiences.
•Legacy System Modernization:Updating or replacing outdated
systems to improve interoperability.

 INFRASTRUCTURE
A robust technological infrastructure is foundational for supporting
digital banking initiatives.
• Cloud Computing:
– Definition: Leveraging cloud services for scalability and flexibility.

Digital Banking transformation Initiatives
Four
Automate in-branch
activities
Six
Build a digital delivery
operating model
Two
Outsource ATM /
POS
Three
Grow leadership in
mobile money
one
Expand agent
network
Five
Add additional
functionalities to MB. app
Seven
Stand up a digital factory
Eight
Digital Banking Spend
Reduction

Expand agent network
 Partner with local businesses, cooperatives, and micro-entrepreneurs to act
as banking agents in rural and urban low-access areas.
 Implement shared or cluster agent models to cover large rural areas cost-
effectively.
 Recruit and train women and youth as agents to enhance inclusivity and
trust.
 Develop mobile-based agent management and monitoring tools to optimize
agent performance and liquidity management.
 Provide liquidity support and regular training to agents on transaction
handling, customer service, and financial literacy outreach

Outsource ATM / POS
 Outsource ATM management and POS deployment to specialized third-party
providers to benefit from operational efficiencies.
 Maintain in-house oversight with internal teams coordinating maintenance
and security during outsourced operations.
 Select experienced vendors with proven track records in Ethiopian banking
infrastructure and compliance.
 Leverage outsourcing to rapidly expand ATM and POS coverage, especially
in underserved regions.
 Ensure service-level agreements include uptime guarantees, timely cash
replenishment, and fraud management protocols.

Grow leadership in mobile money
 Strengthen partnerships with telecom operators to leverage their
networks and customer base.
 Diversify mobile money use cases beyond payments to include
savings,
credit, and insurance.
 Enhance agent liquidity management systems to support mobile money
cash-in/out efficiently.
 Invest in financial literacy campaigns targeting women, rural populations,
and youth to boost adoption.
 Introduce interoperable platforms for seamless transfers across banks

Automate in-branch activities
 Deploy smart branch technologies such as interactive teller machines (ITMs)
or cash deposit and withdrawal kiosks.
 Introduce workflow automation for routine processes such as account
opening, loan applications, and service requests.
 Train branch staff on new digital tools to improve efficiency and
customer service.
 Integrate automated systems with mobile and online banking for unified
customer experience.
 Monitor automation impact with key performance indicators (e.g.,

Add additional functionalities to MB. app
• Expand mobile banking app features to include utility bill
payments, government payments, school fees, and merchant payments.
• Introduce personal finance management tools such as budgeting, savings
goals, and transaction alerts.
• Enable secure and user-friendly credit application and disbursement via
mobile banking.
• Incorporate multilingual support and USSD options for low-literacy and feature
phone users.
• Use analytics to personalize offers and recommend services based on user
behavior.

Build a digital delivery operating model
 Establish centralized digital delivery teams responsible for end-to-end
service management and continuous innovation.
 Develop cloud-based infrastructure for scalability and disaster
recovery.
 Implement agile development cycles with rapid testing and deployment
of digital products.
 Create customer feedback loops and data-driven performance dashboards
to optimize delivery.
 Foster cross-functional collaboration between IT, operations, marketing,

• Set up a dedicated digital factory as an innovation hub for rapid
prototyping, testing, and scaling of digital banking solutions.
• Recruit multidisciplinary teams combining IT, UX, business, and data
experts.
• Use design thinking and lean startup methodologies to iterate solutions.
• Partner with fintech startups, universities, and external consultants for
fresh ideas and technologies.
• Align digital factory projects with national financial inclusion goals for
measurable social impact.

 Innovation & product development
 Agile Development
 User Experience Design
 Data Analytics and Insights
 Cybersecurity and Compliance
 Automation and Robotics
 Collaboration with Fintech Partners
 Continuous Improvement & Experimentation

Digital Banking Spend Reduction
 Conduct spend analysis to identify and eliminate redundant or low-value IT
projects and vendors.
 Negotiate volume discounts and consolidate contracts for software licenses and
hardware procurement.
 Migrate infrastructure to cost-efficient cloud services.
 Automate routine IT operations to reduce manual intervention and labor costs.

Emerging Digital Banking
Solution Technologies

Case
With the rise of emerging technologies such as artificial intelligence (AI),
Blockchain, Biometrics, cloud computing, big data analysis,RPA and others.
,traditional banks are facing increasing pressure to digitally transform their
services to stay competitive in the rapidly evolving financial landscape.
You are tasked with enhancing your banks digital banking offerings through
the adoption of emerging technologies.
How would you advise the bank's leadership team on identifying key
technologies to invest in, setting priorities for digital transformation, and
ensuring a smooth transition while maintaining customer trust and regulatory
compliance?

Case
 Technology Assessment and Selection
 Setting Priorities and Investment Strategy
 Implementation Plan
 Employee Training and Change Management
 Customer Trust and Regulatory Compliance
 Monitoring and Optimization

Biometrics
Biometrics as a digital banking solutions
 Fingerprint Scanning
 Facial Recognition
 Voice Recognition
 Iris Scanning
 Behavioral Biometrics

Robotic Process Automation
(RPA)
RPA is utilized in digital banking transformation
 Account Reconciliation
 Fraud Detection
 Customer Onboarding
 Customer Service
 Compliance and Reporting
 Mobile Banking

Big Data Analytics
Big Data Analytics and digital banking transformation
 Customer Segmentation and Personalization
 Fraud Detection and Prevention
 Risk Management
 Operational Efficiency
 Compliance and Regulatory Reporting

Cloud Computing
Cloud Computing and digital banking transformation
 Cost Efficiency
 Scalability
 Enhanced Security
 Innovation

Quantum computing
Quantum computing and digital banking transformation
 Fraud Detection
 Portfolio Optimization
 Risk Assessment
 Encryption
 Personalized Banking Services

Cybersecurity
Cybersecurity and digital banking transformation
 Multi-factor Authentication (MFA):
 End-to-End Encryption:
 Fraud Detection Systems:
 Secure Mobile Banking Apps:
 Cloud Security:
 AI-Powered Threat Detection:
 Biometric Authentication

Managing Digital Transformation Risks
Activity
Objectives Risk control
Enhance customer engagement
through personalized digital
experiences
Poor user adoption of
digital platforms due to
inadequate user experience
Conduct user experience research and
testing before launching new digital
products; provide training and support to
customers.
Streamline operations to reduce
costs and improve efficiency.
Operational disruptions
during the transition to new
systems.
Develop a phased implementation plan
that includes pilot testing and
contingency plans for operational
continuity.
Ensure compliance with
evolving regulatory frameworks.
Failure to meet regulatory
requirements leading to
fines or sanctions.
Regularly update compliance protocols
and conduct training sessions for staff
on regulatory changes
Strengthen cybersecurity
measures to protect customer
data.
Cybersecurity threats such
as data breaches
Invest in advanced cybersecurity
technologies, conduct regular security
assessments, and establish an incident
response team.
Finalize and present the Objective – Risk – Control Mapping Matrix

Digital Banking Digital Marketing

Digital Banking Digital Marketing
You are a digital marketing consultant tasked with developing a
comprehensive digital marketing strategy for one of the leading banks
in Ethiopia, The bank aims to increase its customer base, enhance brand
awareness, and promote its digital banking services, particularly among
the younger demographic (ages 18-35) who are increasingly relying on
mobile and online banking solutions.
How would you design a digital marketing strategy for the Bank to
achieve its goals? Please outline detailed activities under each
component of the strategy

Types of Digital Marketing
Content Marketing
This is the use of generated content by the
organization to drive sales from various
consumption points, this could be posts on
social media, podcasts etc.
Affiliate Marketing
This is a model where companies use 3rd
party companies to push their products or
services to their target audience. Eg the use
of social media influencers to drive
purchasing based on the influencer's audienc
Display & Video Advertising
Use of display videos and images to drive
sales, by positioning the videos and images in
targeted areas based on customer
segmentation. Eg, use of family-based videos
in malls that families frequent
Search Engine Optimisation
Improving a website's visibility and
ranking in search engine results
pages
Social Media Marketing
Use of social media platforms like
Facebook, Twitter, LinkedIn, and
Instagram to promote content, products
or services
Email Marketing
Display & Video Advertising Use of display videos
and images to drive sales, by positioning the
videos and images in targeted areas based on
customer segmentation. Eg, use of family-based
videos in malls that families frequent.
©

customer experience in digital Banking
What are the key components of a positive customer
experience in digital banking?

customer experience in digital Banking
 User-Centric Design: – Intuitive Interface
 Personalization” – Tailored Experiences
 Omnichannel Experience: – Seamless Integration
 Speed and Efficiency – Quick Transactions
 Security and Trust:– Robust Security Measures
 Proactive Customer Support:– Accessible Assistance
 Feedback Mechanisms:– Continuous Improvement:
 Educational Resources:– Empowering Customers

Thank You
Tesfakiros Gebremedhin
Tel +251912673975

digital_banking_innovation_and_transformation_oct_2025_p_1.pptx

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