Ugandan Banks Extend Hours To Compete With Mobile Money Services

Banks in Uganda are being forced to extend business hours to compete with the 24-hour-a-day availability of mobile money services.

Traditional banks were once the go-to for financial services, but advanced technology has allowed customers to access money around the clock, reported All Africa. Financial institutions across Uganda need to adjust operation times to delivery services and products, or risk losing customers to mobile money competitors.

“The banks either have to work 24 hours or they will run out of business,” a telecom company in Uganda reported to All Africa.

Banks are responding to new demands, as a survey by Business Vision indicated that banks such as Diamond Trust and Standard Chartered have extended hours and now have branches open on Sundays. Other banks are open as late as 7:00pm Monday-Friday, and close at 3:00pm on Saturdays, compared to the 12:00 pm closing that was standard just a few years ago.

Ugandan banks are finding other ways to keep customers in addition to extending hours: they have also resorted to mitigating service fees for various over-the-counter transactions. Banks have even hyped up the convenience of ATM services and are encouraging customers to use ATMs more often.

At Centenary Bank, bank staff will approach customers waiting in line at branch locations and ask them if they’ve registered for CenteMobile. CenteMobile is the bank’s 24/7 banking program that enables customers to complete transactions and retrieve banking information through their mobile phone. Centenary Bank is attempting to combat mobile money competitors, telling customers they can use CenteMobile anytime and anywhere.

Those in the financial industry acknowledge that new trends in the market are largely due to rising popularity of smart devices that allow for online banking services. The Head of Consumer Banking at Standard Chartered, Raheel Ahmed, reported that the bank’s over-the-counter transactions have dropped by over 20 percent in the first half of 2013 – evidence that online banking programs are rapidly growing. Ahmed said new consumer trends are strongly influenced by digital advances. This underscores the importance of traditional banks moving away from brick-and-motor services to more of an online presence.

However, All Africa reports that mobile phone services have grown popular for reasons beyond added convenience. The shift in consumer behavior is partially due to the growth of new technology, but it can also be traced back to new customer attitudes.

“People are tired of the bureaucracy of being asked for signatures and IDs, the ATM being swallowed up or the money running out of the machine and so on,” Joseph Omoria, a banking professor at Kyambogo University told All Africa. “They would rather go to a mobile money operator who only requires the cell phone number of the person he is sending money to without all of the rigid bureaucracy.”

At present, there are more consumers in Uganda who have registered for mobile money services in the last three years than Ugandans who’ve signed up for bank accounts in the last five decades. Banks, longstanding and government-backed, have a greater variety of services than mobile money providers, which are still struggling to overcome network instabilities and other issues. Yet still, more consumers in Uganda are still turning to them for financial services. It may take more than extended hours and reduced costs to convince Ugandans that traditional banks are more appealing.

To read the full story at All Africa click here.