The introduction of electronic or digital banking has eased banking capturing customers who originally preferred to keep their monies elsewhere. In as much as the genesis of financial technology dates back as the 1850s, Bank of America in the 1950s was among the first institutions to moot and develop the idea of electronic banking with a futuristic aim of taking over the rather labor-intensive banking tasks of handling cheques and balancing accounts.

The other financial institutions at the time eventually bought into the idea and started progressing away from using paper transactions and moved towards electronic banking. In Uganda, e-banking was introduced into commercial banking in 1997.

In 2019, analysts put the adoption of e-banking by our banking system at a meagre 39 per cent. However, the adoption grew way more than that. For example, looking at agent banking, by February 2020 transactions by agents had grown to Shs 1.6 trillion from Shs 457 billion in December 2018.

Banks in Uganda have embraced e-banking and are working to ensure that the population gets fully accustomed to it as it is the future. The integration of mobile and digital banking has traversed, ensuring different categories of people are catered for.

A USSD code is available for people who do not possess smartphones and mobile banking applications available for those who do. Banks have also invested in internet banking and the biometric system which enables paperless transactions as you do not need to sign any document for withdrawal. 

In order to mitigate the spread of coronavirus, at the height of lockdown in 2020, banking institutions encouraged customers to use digital channels and avoid crowding in banking halls. Bank’s went further to increase their investment in digital channels, e.g increasing the number of agents to support customers wherever they are.

More was done for customers to use the digital channels, for instance, Centenary bank in March 2020, waived agent banking withdraw charges for transactions above Shs 50,000 per day, they also waived charges for money transfers from account to mobile money for monies of above Shs 30,000 per day and waived charges on ATM CenteVisa transactions above Shs 50,000 per day.

Centenary bank customers were availed the opportunity to buy fuel at petrol stations, pay for drugs at pharmacies, shop at groceries among other options while using the CenteVisa card, agent banking, and CenteMobile.

Before e-banking, the traditional banking customer had to visit the bank in-person to perform banking operations as simple as account inquiry, funds transfer and cash withdrawal.

Due to advancements in technology and the embracement of e-banking, convenience has been achieved as now one can fulfil their banking needs and obligations without having to leave their workplace or home. The system has uncrowded banking halls and set forth an environmentally friendly system for sustainability.

Ioannis Koskosas in his short review; The Pros and Cons of Internet Banking argues that electronic transmissions are environmentally sustainable and should be embraced by all institutions.

Financial literacy is given to customers on how to guard their digital accounts against fraudsters. Customers are advised not to share passwords, not to give out their ATM cards, to register for SMS alerts so that any transaction on their account is immediately seen, they are further advised to change passwords often and report any suspicious transaction as soon as possible.

With e-banking, there is low cost of maintaining branches and cuts the number of staff that the banks would otherwise be spending on. To enable an efficient e-banking system, the banks need to ensure that all internal controls are implemented, and that ATMs are serviced as promptly as possible for the customers to access their funds as and when they need them.

There should also be transparency and efficient communication to the customers in case of any upgrades to the system so that customers who are using online banking are aware of any inconvenience caused. Banks should also invest in trainings and marketing of E-banking products.

Using another example of Centenary Rural Development bank, the new CenteOn the Go feature that was introduced on the CenteMobile offers more convenience and ease of doing business. 

It enables customers to open up a bank account without the need to visit any bank branch and submit paperwork. Pretty much summarizes the evolution of e-banking in Uganda and the wild extent it can go to. With such innovations, literacy trainings are vital for Bank customers as the digital movement in the country takes shape.

The author is the general manager, corporate communications & marketing, Centenary bank