Barclays’ inclusion agenda hailed 

SHARE   |   Monday, 27 November 2017   |   By Kealeboga Masalila
Barclays’ inclusion agenda hailed 

Barclays Bank has been in Botswana for 67 years, having started operations in Lobatse in 1950 and, subsequently it has served the Mahalapye area for over 50 years. This is from the time when banking services were offered through an agency operating from Palapye, followed by the opening of a full-fledged branch in 1963 located in Xhosa 2; and now the relocation here at the new Watershed Mall.  The new branch is, inevitably, more modern, secure, convenient and links well with digital and electronic platforms and options provided by the bank; therefore contributing to an enhanced range and quality of services for customers.  In this respect, Barclays Bank has enhanced the digital channels for services delivery, including upgrading of Automated Teller Machines to incorporate “intelligent” functionality. These ”Intelligent Automated Teller Machines” provide customers with additional services beyond cash withdrawals, such as cash deposits, card-less transactions and bill payments. Furthermore, alongside other banks, Barclays Bank has also leveraged on new information and communication technology and the high rate of mobile phone penetration in Botswana and partnerships with the mobile network operators to widen access to banking services. These include convenience with respect to money transfers and remittances, as well as value added services such as payment of bills and prepaid utilities or services.  Overall, the opening of branches, adaptation of digital and electronic channels and other platforms for offering banking services, to cover a greater number of individuals and businesses, including the small and small-scale enterprises, agricultural pursuits and the informal sector, augurs well for the Government’s financial inclusion strategy.  Even then, it is necessary to repeat the Governor’s caution in the Keynote Address at last week’s Banking and Wealth Expo that, banks need to move at a measured pace, taking into account the resilience of public infrastructure and other development needs, in transitioning from brick and mortar banking branches to exclusive offering of electronic and digital channels. Noting, in particular, that there is anecdotal evidence which suggests, for various reasons, such as, cultural, literacy and human psychology factors, that customers, even in this digital age, need physical access and engagement with a human being to understand and resolve banking relationships and account queries. It is also important to ensure that Automated Teller Machines, mobile and internet banking products are relevant, customer oriented and, as promised, available for 24 hours every day.

While the benefits of new information and communication technology are significant and should be embraced; but risks of compromise of banks’ systems, cyber-crime, and fraud and identity theft should also be understood.  As such, businesses and individuals must be vigilant to mitigate these risks. Moreover, the sharing of information relating to these crimes and threats thereto is crucial to containing their spread and impact, as well as cooperation in development of mitigation strategies.  It is also appropriate to continue to caution against engagement and participation in illegal deposit taking and pyramid schemes, which can lead to loss of hard-earned resources and financial ruin. The tell-tale signs of these illegal and dangerous activities is the offer of returns that are substantially higher than the rate of growth of the economy, the interest rates obtaining at the formal financial institutions and the returns on the stock exchange. The expansion in formal and licensed banking business and extension of services by banks, including Barclays obviates the need to engage in such risky and illegal ventures; but rather for businesses and individuals to work with institutions that are properly regulated and are accountable.  At this point, let me also point out that the Bank of Botswana and other regulatory authorities, as well as the banking and financial sector community recognise the challenges relating to the know your customer requirements, that they may appear onerous and at times disproportionate; indeed that they can work against the financial inclusion agenda. To this, I will again repeat the Governor’s message from last week at the Banking and Wealth Expo that both the Financial Intelligence Agency and the Bank of Botswana subscribe to a risk-based approach and seek to avoid undue regulatory burden.  That said, he also indicated that, it is equally important to safeguard the integrity and overall stability of the country’s financial system by implementing and adhering to the international standards on Anti-Money Laundering and Combatting the Financing of Terrorism matters. In this respect, there is need to guard against the impact of de-risking and loss of correspondent banking relationships that could be detrimental to trade, procurement, financing and payments arrangements. From the perspective of the Bank of Botswana, as well as public policy generally, participation in the formal financial sector by a greater number of businesses and individuals enhances the potency of macroeconomic policies. This is because financial institutions are an important channel through which policy is transmitted. For example, monetary policy action involving changes in interest rates will affect saving and borrowing decisions of those that use banks and other financial institutions; and ultimately such decisions collectively influence the rate of economic growth and speed of change in prices. A greater use of the formal financial sector also feeds information necessary for monitoring and, where needed, initiatives and responsive action for developmental purposes and for mitigating risks and maintenance of financial stability. It is relevant to highlight the fact that Barclays Bank Botswana Limited is listed on the Botswana Stock Exchange, which provides an opportunity for share ownership by locals and institutions that invest on behalf of individuals, such as pension funds and other asset managers. In turn, as part owners, investors benefit from the growth and profitability of the bank. The listing on the Botswana Stock Exchange further demonstrates the commitment of Barclays to Botswana. 

Indeed, while there have been recent announcements relating to changes in ownership of Barclays at holding company level, we are assured and need to communicate the message that the local operation remains integral to the Botswana financial system and should continue to grow, with full and expanding service to customers, as I alluded to earlier. You will recall that the Bank has previously issued public statements to this effect. You will note in this regard that Barclays Bank has grown to a total network of 34 branches and 109 “intelligent Automated Teller Machines” and currently employs 1200 staff members. As it continues to participate actively in the economy, the bank has in the past 10 years, grown the amount of deposits raised from the public from P8.7 billion to P11.2 billion. Meanwhile, while lending to a wide range of business sectors and for a variety of households needs more than doubled, from P3.9 billion to P9.4 billion between 2007 and 2016.  It is also fitting to highlight the important and impactful social responsibility initiatives undertaken by Barclays Bank. These include the Shared Growth Strategy, which aims to educate individuals and small to medium enterprises about financial management, as well as attaining financial inclusion; Madi Majwana, which is an education and entertainment radio programme, and theatre production, focusing on financial literacy; and the Ready To Work Programme, which is geared towards empowering the youth on financial management, entrepreneurship and employability.  Barclays Bank also provides financial assistance to excelling university students, through the Barclays F.G Mogae Scholarship.  The bank also participates in conservation and through the Rhino Debit Card programme, a share of profits is donated towards saving rhinos in Botswana. Finally, let me take this moment to thank the Board, executive leadership and staff of Barclays of Botswana generally, for their efforts over the years. In particular, furthering the government’s financial inclusion agenda, participation in social responsibility and community development programmes and also ensuring that the bank is well-managed, safe and sound, and meaningfully contributes to the economic development of the country. 

*This is part of a Keynote address by the Deputy Governor of Bank of Botswana Kealeboga Masalila at the official opening of the Mahalapye branch of Barclays Bank on November 21, 2017