NMB Bank’s innovation success story transformation gives unparalled customer satisfaction

The Head of Innovation at NMB Bank, Ms Josina Njambi, shares the institutions’s journey to digitisation in this interview given as part of marking Innovation Week 2021.

QUESTION. Would you tell our readers what NMB’s Innovation hub is all about?

ANSWER. NMB Innovation hub, helps the bank to continue being at the fore front of technological innovations by anticipating customer needs and provide an extensive range of banking solutions and operation efficiency delivery. Key strategic focus include driving the bank’s digital transformation journey and create new business opportunities using technology. Our formula to success is rooted in the belief that extraordinary results can be accomplished by taking a unique approach in each client’s needs in mind through Human Centred Design. As part of our new Medium-Term Plan, the bank has adopted a new value – ‘#Innovation’. This value serves as a reinforcement of our DNA in the context of the environment which is constantly evolving and our focus on ensuring we continue to serve the needs of our customers.

What are some of the achievements NMB has made, thanks to technology and digitalisation in the bank?

Technology and digitisation has given us the capability to offer banking services through: Mobile (USSD) and application, Internet, Wakala and ATM, which allowed customers to access services without visiting the branch. Over the last few years, due to the efficiency and effectiveness of our digital channels, supported by our state-of-the-art-technology, we have seen a strong pickup in adoption of digital offerings. Digital channels transactions currently account for 93 percent of all transactions done in NMB. The number has been growing year on year by 24 percent while branch transactions dropping by 10 per cent. Value of transactions processed by self-service digital channels have grown by more than 496 percent over the last five years. The number of accounts being opened in our digital channels consist of 70 percent of the total account opened, which has allowed us to reach a huge accounts base of four million. This demonstrate a big shift towards the digital economy in Tanzania and the region in general. With over 93 percent of customer transactions happening outside the branches, it means less cost to serve customers and we have transferred these cost savings benefits to our customers where we’re now able to offer more services at a lower cost.

Some key flagship solutions are:

• Payment and collection services. Our enhanced technology platform allow us to offer seamless and secure integration to our corporate, government institutions and SME customers’ statements.

• Customized solutions that fit different segments. For example- Pamoja solutions (a proposition which allows groups to open, manage, get credit facility through their mobile phones).

Dunduliza solution: NMB & Non-NMB account holders to collect small amounts of money towards their health insurance in partnership with NHIF.

• Digital forex kiosk; an advance machine which allows customers to perform self-service foreign exchange using competitive banking rates converting: USD/EURO and Pound into Tanzania Shillings.

What should we look forward to in this Innovation Week from NMB?

The NMB Innovation Lab is excited to invite the public into our first Hackathon design sprint event, where we will work with a group of selected youths including; computer programmers, graphic designers, interface designers, project managers, domain experts, and students from across the country in a one week event to deliver the application of the future. We have received many applications, where we will select 15 top applicants to join us for the event. The individuals will work in groups.

What are some of the innovations in the pipeline that will enable NMB as a bank digitize further?

Tanzania is transforming and we are living in a ‘Digital Tanzania’. Our digital banking journey will focus on three key areas including:

• Digitising channels: by creating seamless multichannel experiences, re-designing our distribution model – as transactions are starting to shift away from branches.

• Digitising the banking experience through payments, transactions and automation. Digitize customer engagement process end to end, automation of main banking products from account opening to transactions. Use integrations from other platforms like national identification systems to pre-populate customer details and digitize service requests to facilitate the process.

• Digitising core processes: Digitise the back office and front office processes by leveraging on emerging technologies like Chatbots, Artificial Intelligence and Block Chain technologies.

What is the most successful innovation at NMB handled by your department?

As a department they are many innovative solutions that we are proud of, but one which stands out for now is our; Groups/Pamoja Mobile Proposition. This innovation has greatly transformed, the lives of many Tanzanians, who can conveniently access reliable formal financial channels and aid in bringing more Tanzanians into the formal economy.

This digital application offers four key areas including:

• Open & manage their group accounts.

• Credit facility from the banks and the group.

• Contribution management.

• Groups account information.

For a customer to access this solution, they simply need to dial our USSD short: *150*68#, from any mobile network provider where they will be routed to the platform which they can open group account, manage the accounts, add members, view statement, balance enquiry, send contribution to their group accounts and apply for a loan within the group or from the bank. The platform has been designed, developed and managed by local Tanzania experts, which continue to showcase how the bank invest heavily in ensuring the technical expertise of our local Tanzania youth.

Where do you see NMB in terms of innovation and Digital Transformation in the next 5 years?

The future is very exciting as customer expectations is changing very fast and improved technological capabilities continue to be discovered.

This has results in rising competition from Fin-tech start-ups that use technology to create unique customer experiences around banking and other financial services. Further, the threat of cyber-security breaches has meant that banks need to be more agile than ever before.

The three top key areas in the next 5 years include:

• Fintech Partnership: As NMB we have well positioned our self to work closely with Fintech, through our Fintech partnership program which will be launched before the end of Q-2/2021. This program will allow us to partner with FinTech, which will help banks drive down costs, innovate and enhance customer service. Through our Sandbox Environment we will facilitate smooth integration with the Fintech eco-system whilst ensuring customer information is well protected.

• Advance cyber security: The prevalent threat of cyber-attacks on financial institutions remains one of the bank’s top focus. The bank has in place a well-defined cyber security approach and our cyber security practices and controls that provide confidence in the security of customer data.

• Emerging technologies adoption: Over the next 5 years, we will leverage on relevant emerging technologies that will help us to position our digital offerings including; Big Data Analytics, Machine Learning, Cloud computing, Chatbots, etc.

What would your advice innovation enthusiasts about digital transformation and the banking industry?

‘Cash is King!’ This quote is facing a serious threat as the world is marching towards becoming a cashless society. The recent trends suggest that digital money will soon replace physical cash. Many countries are making active efforts to remove cash in circulation – Sweden is prime example.

The banking and wider finance industry is facing a huge change through digital banking innovation across the spectrum of payments, cash, lending, money transfer, investment management, among other areas. Each one of us has a role to play in ensuring Tanzania is not left behind!

The digital transformation will facilitate the move towards the ‘cashless society’. The many major benefits of a cashless society including; reduced cost and business risk, increase the speed of transactions, seamless international payments, better compilation of economic data, an efficient tool to fight corruption and elimination of the middle man.

Whilst a fully cashless society may appear to be many years away! Adoption of technological advancement through the banking and other relevant sectors which process transaction, could very well shorten this period.

With the introduction of cutting-edge technology and constant improvement of existing technologies, we might see faster, more transparent and more secure cashless payments than ever.

Who should do what to ensure that the banking sector stays up-to-date with digital technology?

For the banking sector to stay up to date, there is a need of multiple players in the market to work closely together on facilitating the adoption of digital technology for the benefit of the Tanzania population. This include:

• Relevant ministries: to ensure policies that are set reflect the changes in the technology space and they aim to facilitate easy adoption to the Tanzanians citizen and banks. For example: by setting Research and Innovation Lab for the country, where technologies can be accessed, analysed and critically evaluated.

• Regulatory bodies: ensuring regulatory bodies are at the fore front of technological knowledge and impact analysis, to fast track approvals of new technologies within the banking industry.

• Education curriculum; review curriculum to ensure it is relevant and includes the key technology and digital changes. This will help prepare the next generation in adoption of these technologies and increase their career progress.

• Banking associations; ensure banking associations facilitate discussions among banks to adopt on technologies that can be shared so that we reduce the capex investment made by each bank and increase efficiency of delivering the service to the customers.