StanChart Ghana's ‘SC Mobile’ digital bank opens new revenue streams

Standard Chartered Ghana (StanChart Ghana) operates as a full scale banking player in Ghana deriving more than 30% of its bank revenue from retail financial services. Within retail, revenue is driven by deposits, loans, credit cards and wealth management. The bank commands a market leading credit card business in the upper segment with its Visa Infinite card and is unrivalled among its peers in the scope and depth of the wealth management business in a market with most banks offering traditional deposit accounts, as well as a limited number of investment products and services. By launching a full digital bank on mobile called the Standard Chartered Mobile (SC Mobile) in the first quarter of 2019 in line with a wider digital transformation in the African continent, StanChart Ghana started delivering on its digital agenda not just to future-proof its businesses, especially during crises such as the COVID-19 pandemic, but also to make digital banking safer, faster and more intuitive for clients.

Restructuring the financial service sector

Ghana’s financial services industry has gone through one of the fastest restructuring exercise of any African country in the last years. Between August 2017 and end 2018 the government cleaned up an unprofitable growth and stagnant sector by setting new capitalisation standards and closing banks or forcing them to consolidate. In total, it drastically cut back the number of financial institutions from more than 640 to 227 institutions with the numbers of micro lenders reduced by around 70% and commercial banks by a third to 23. At the same time a number of first tier banks implemented their next generation in core banking to power operations for retail and corporate banking. The industry returned to positive growth in 2019. The COVID-19 pandemic accelerated the digital transformation journey of lenders and prompted customers to adopt digital channels in large numbers. Ghana’s central bank permitted at the same time know your customer (KYC) requirements on mobile-money and current account and savings account (CASA) accounts. Standard Chartered Bank’s digital infrastructure was already in place and proved vital in managing COVID lockdown. Today, serving clients digitally is top of the game for all banks.

The bank’s mobile-led digital bank improved market position and attracted new to bank clients

The mobile-led digital banking app of StanChart Ghana features a range of innovations and functionality improvements to offer a more seamless experience for its clients. The app includes an end-to-end digital client onboarding for CASA accounts, a fully enhanced payment proposition including mobile money and a wealth solution. By end 2019, the bank achieved a digital client onboarding of 85% which increased to more than 90% by mid-2020. This process is supported by a robust process of client authentication. At the same time, it applied facial recognition and fingerprint analysis for client log in. The bank was able to onboard more than 10,000 new to bank clients in 2019. This was driven by the ability to move clients from the e-wallet directly into its bank account. This was as significant to attract a wider target audience beyond affluent as was the amount of deposits collected. Retail deposit grew by 19% year-on-year (YoY) in 2019 compared to below 6% compound annual growth rate (CAGR) in 2016 to 2018. However, Stanbic Bank grew 40% YoY in 2019 while Fidelity Bank grew by 25% in the same period.

By looking at their most prominent client service requests and transactions it translated more than 70 service requests into end-to-end digital processes, moving the bank ahead of local competition in small requests such as cards and cheque book. It introduced in February 2020 its fixed income trading platform on SC Mobile which gives clients the opportunity to buy and sell government-issued bonds. The bank is in the process of digitising bancassurances, credit cards and personal loans. The results of these efforts were also reflected in a 3.9 mobile app score on Google android (see Figure 2),  the highest scoring among top banks in Ghana, and a high mobile net promoter score (NPS) close to 50.

Moreover, the bank is rolling out its digital hubs that are fully self-service. It is equipped with digital banking devices including intelligent ATMs for cash withdrawal, deposit, cardless services, credit card payments as well as internet-enabled banking terminals to cater to in-branch services like investments. Additionally, the digital hub has installed phone services for clients to engage directly with the client care centre. Adequate security is provided 24/7. The bank also aims to service its client better through agency banking as it sealed agreements with two major agents and will add US dollar banking to capture wider market for its digital solutions. 

The bank also took a proactive approach to manage clients during the COVID-19 pandemic. The bank was forced to address how to operationalise work from anywhere and to engage clients. More than 70% of priority clients were engaged via digital channels and electronic direct marketing (EDMs) in the first three months of the pandemic. The bank also waived transaction fees in mobile money and general bank transfers since moving money between mobile wallets and StanChart account became critical for clients. Beyond general repayment holidays for loans, it also extended its repayment cycle for credit cards from 50 to 55 days.

StanChart Ghana outperformed major local peers Stanbic Bank and Fidelity Bank in digital journey, customer experience and risk management

Based on a 10-dimensional balanced scorecard which takes into account a player’s critical corporate achievements, a sustainable financial performance, the ability to generate core retail deposits, and the digital journey, StanChart Ghana achieved 17.6 out of 50 points, relegating banks such as Stanbic and Fidelity Bank into lower positions.

StanChart Ghana was leading its country peers in five out of ten assessment dimensions. It earned strong points for the progress it made in its digital journey and in customer experience driven by its NPS and Android score. It also scored high in key client impacting customer initiatives including the successful rollout of its SC mobile platform that was an achievement in this year’s programme. It also achieved robust scores in its quality of the retail assets where non-performing loans were significantly lower compared to Stanbic Bank at 10% and Fidelity at 4.8%, respectively. 

As for is digital journey, StanChart Ghana had a higher degree of digital onboarding compared to local and regional peers. However, its open banking initiatives are more limited and only prominent with its digital onboarding. Its digital active base is about one third of its customer base putting the bank in the top league of banks under review, although Capitec Bank South Africa is leading the field with 40%.

StanChart Ghana recorded a robust financial performance compared to all top African banks but a smaller nominal revenue size from retail banking compared to its peers in Ghana, lower profitability or return on equity (ROE) and higher cost to income ratio (CIR) were drag on its financial score.

As with most local first tier banks having modernised their technology stack and core banking system over the last two years, StanChart Ghana will have to address those points eventually, too. Cloud migration in the country, in general, is comparatively lower compared to other African peers.

As part of BankQuality™ Consumer Survey and Rankings which also contributed to its customer experience score, TAB gathered feedback from 3000 consumers in Africa about their experience and satisfaction with their retail banks. The BankQuality™ Consumer Survey assesses consumer perception, attitude and loyalty to financial institutions based on their experience with service, channels, products and COVID-19 support initiatives.

StanChart Ghana was voted among the top 10 premier banks in Africa in the 2020 BQ survey. The bank was regarded, in particular, helpful in its customer response to the COVID-19 pandemic where it scored as the third best African bank and received high scores in its digital channels. The bank, however, was not among marketing leading players in Ghana for home loans, personal loans, overall credit card portfolio, remittances and savings accounts where its peers fared better

While its overall product score lacked a competitive edge,  StanChart Ghana received a high customer score for  its digital  platform driven by its SC Mobile platform and was voted the best internet bank in Africa among 30 top players.

The strong performance of its SC Mobile app, improved customer experience initiatives and response to COVID-19 pandemic propelled StanChart Ghana into the top retail bank in Ghana this year. The bank has to be on guard though as its peers have upgraded their technology infrastructure and shown stronger product propositions and financial performance. StanChart Ghana needs to close these gaps going forward to keep its number one spot in the country.

SWOT Analysis

Strength

• Scope and depth in wealth management offerings
• Visa infinite card related to its wealth offerings
• SC digital mobile led platform
• No interruption in the transaction platform during COVID-19 pandemic

Weaknesses

• Lack of US dollar platform to reach out to wider range of clients
• Higher cost to income ratio and lower profitability compared to local peers
• Outdated technology infrastructure
• Back office digitisation and lack of digital sales options beyond new to bank client onboarding
• Inability to grow better its retail deposit base in the past compared to peers
• Lacking market leading proposition (top 3) in all its retail products based on the BankQuality Consumer Survey 2020 with the exception of retail payments

Opportunities

• Accessing a broader target customer base with US dollar and agency banking
• Re-strategising its existing product propositions in order to gain a competitive market advantage

Threats

• Local peers gaining edge in agility, speed of new products to market and innovation with new core banking systems
• Prolonged COVID-19 pandemic