Innovation Unlocks a World of AI, Digitalization, and Predictive Analytics: NMB Bank's Transformational Journey into Fintech.

By ABSP Staff Writer | 02 Nov 2023

Innovation Unlocks a World of AI, Digitalization, and Predictive Analytics: NMB Bank's Transformational Journey into Fintech.

In developing countries like Zimbabwe, stability and a transparent regulatory framework are crucial to attract investment and talent. Unfortunately, Zimbabwe has been characterized by hyperinflationary pressures, inconsistent monetary policies, and an exodus of skilled workers. Despite these challenges against this backdrop, NMB Zimbabwe has embraced innovation and pragmatism, propelling itself into the digital age. By taking bold and innovative steps, NMB has the potential to revolutionize the banking industry in Zimbabwe, reshape the economy, drive efficiencies and create new markets. Examining NMB Bank's experience gives us insights into the immense power of innovation and its remarkable impact on an organization's agility, responsiveness to changes, valuation, and scalability.

The Power of Innovation:

NMB Bank's management and executive team identified opportunities for growth, sustainability, and relevance by blocking out the noise and seeing past dominant narratives that describe the challenges of doing business in Zimbabwe. One of the boldest steps NMB took was building its core-banking system from the ground up. This three-year journey has resulted in the creation of a strategic asset that drives the bank's operations. Additionally, the project has raised the knowledge base, skillset, inclination, and culture of everyone within the organization to embrace innovation and change.

While some might argue (usually the most decorated and distinguished amongst us, holding key influential positions) that buying off-the-shelf banking platforms developed abroad is the best approach. For far too long, this misguided notion that acquiring the so-called "best" banking platform has been regurgitated as expert advice as a safe bet, leading to an enormous capital outlay, extensive trainings, and system rollouts, that lock in a Bank with a OEM vendor like T24 and Oracle. However, it's imperative to note that context is everything, and what may be considered the "best" is relative to the specific situation. The times call for a break free from this out-dated mentality and acknowledge that there are better, more customized solutions available that can provide the same, if not better, results. Take the Zimbabwean context.

Currently, banks using the "best" platforms do not own them but instead pay annual license fees in hard foreign currency to use and get support for the application from vendors. When changes to the systems base model are required, necessitated by changes brought about by a new SI, for example, ie. the introduction of the ZiG currency, the banks have no option but to engage with their support vendor partners who are usually in India or abroad to make the changes. These changes are often time-bound, unbudgeted, and treated like a project where ongoing communication, implementation, and support issues with the support vendors arise, almost always resulting in banks missing these deadlines. Furthermore, often, when banks using "best" solutions need changes or updates to the systems, they are met with responses like, "our system doesn't do that," "you have to upgrade to the next version to get that feature," "this request is outside the scope of your maintenance agreement and is, therefore, chargeable," etc. that are additional stumbling blocks that complicate and compromise the success of the project.

In the case of NMB Bank, owning the code to their banking platform has freed them from these license fees in forex, the uneven yoking to 3rd party support partners, and unbudgeted spend necessitate by regulatory changes and product releases, for example. By owning the solution, they can quickly respond to any change requirements before the deadline. Most importantly, they have created a balance sheet asset that appreciates in value based on the bank's performance. This way, the core banking platform can contribute to the core capital of the overall business.

Conclusion:

NMB Bank's transformative journey serves as a testament to the power of innovation. By embracing a new system, NMB Bank is now in the fintech space, focusing on creating new product lines and markets instead of day-to-day banking operations. They can take the savings from license and support fees and plow those funds back into the business in R&D and innovation. The new application will continue to boost the asset and capital positions of the balance sheet as bank performance metrics around improved operational efficiency, enhanced customer experiences, and increased competitiveness in the market register in the bank's financial statements.

Most importantly, with their access to the code and information, they can begin critically looking at the data to explore ways to unlock value using AI and predictive analytics. NMB Bank's journey serves as a beacon of inspiration for aspiring innovators and disruptors, demonstrating that remarkable transformation awaits those who have the courage to challenge the status quo and embrace the power of innovation. At ABSP, we can be your trusted partners on such a journey for your business. Whether it's in banking, manufacturing, retail, or any other industry, we can help you unlock the value, power, and potential of innovation. Contact us at info@absp.online or call us at +263774820057 and lets have a discussion.