Ghana Consumers Snub Banking Technology

What's Next In Payments®
5:01 PM EDT May 9th, 2013

Customers in Ghana prefer to keep some things old fashioned: specifically when it comes to banking. A 2013 KPMG survey revealed that consumers in Ghana are snubbing self-service ATMs and opting to complete banking transactions at local branches, reports GhanaWeb.

Ghana and other countries in Africa have been pushing new technology to consumers and investing billions into expanding consumer channels. Several payment technologies have been rolled out in the last few years, including advanced ATMs, online banking, POS devices and terminals, and mobile banking applications. Despite all of these innovations designed with the intention to make life easier in Ghana, some consumers still prefer making the trip to bank branches.

Sixty percent of the survey’s participants reported they go to a branch to withdraw cash, and 83 percent said they are still making bill payments at branches. The survey also reported that only 8 percent of Ghana consumers were utilizing online banking services.

Online and mobile banking was created for those consumers who were looking to perform small tasks, such as quickly checking account balances or pending payments. Fifty-six percent of respondents admitted that they still prefer walking to the bank to check their balances. Thirty-eight percent use ATM machines to get account balances and a small 3 percent are taking advantage of mobile baking to check such information.

Presently, there are 26 commercial banks in Ghana, and 889 retail bank branches. About 30 percent of the Ghanaian population (out of 25 million) use banking services. According to GhanaWeb, Ghana’s banking sector has a GH¢25billion total asset base, which was reported in 2012.

The survey questioned the reason for low banking penetration in Ghana and reported a few influencing factors. KPMG reported that the multiple bank charges from banking services may be deterring consumers. It was also suggested that the bank products available did not directly meet the Ghanaian customers’ exact needs.

Signing up for services and registering new accounts requires lengthy paperwork and time that many consumers find unappealing. Bank branches are not as pervasive as they are in other countries, and travelling distances may also represent a barrier for people in Ghana adopting banking services.

Despite the minimal and slow adoption of newer technologies, the survey predicted that Ghana consumers will eventually give in to other channels. Branch visits and ATM preferences are expected to shift to alternative payment channels.

The more consumers that switch to online banking and mobile apps will reduce the high costs of employing branch staff, which will trickle down to the consumer level thus resulting in lower charges and lower capital expenditure.

Banks in Ghana understand that in order to promote a shift from retail to branchless banking technologies, they must create greater awareness amongst consumers. In order for Ghanaians to feel comfortable making a switch, they must properly understand procedures, services and the implications or benefits.

To read the full KPMG report at GhanaWeb, click here.

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