As Q3 2022 comes to an end, two big announcements in the financial and technology sectors indicate that collaborations are in vogue.
Liquid and Standard Chartered Bank
Sonny Zulu was announced CEO of the Standard Chartered Bank Zambia location in Q2 2022 and his first order of business was to introduce himself to the local business community. What better way to announce that Zambia’s favorite banking son was back from Dubai with the announcement that he would be teaming up with Mark Townsend of Liquid Intelligent technologies in an agency banking venture that makes sense at every level!
Agency Banking 101
According to Digipay Guru,”Agency banking is a type of branchless banking that allows the traditional banks to extend their network of branches and services in a cost-efficient manner through authorized agents. Agency banking is gaining popularity due to various reasons like product availability, risk management, improvement in financial inclusion, and many more”.
Why a Townsend – Zulu Collabo?
Mark Townsend’s Liquid Intelligent has been on a quest to take internet and technology solutions providers services to far flung areas which by coincidence is where government is seeking to connect people to the “technology grid”.
On November 22, Diggers newspaper published an article that exposed government’s concern over Standard Chartered Bank’s closure of 8 branches. The depletion of branches was part of the bank’s aggressive move to becoming a digital bank. However, there was only one problem. Natives were accustomed to brick-and-mortar banking as digital banking was quite nascent.
Enter Liquid Intelligent and its growing network of branches across the country which has become Sonny’s answer to restoring Standard Chartered Banks presence in locations it was once domicile.
Both entities bring much to the table. Liquid has been growing its brand and visibility. It has put in place the infrastructure that would allow any prospective partner who seeks to bring its services into the tech’s ecosystem very seamless. The bank has extensive experience in risk management and has built technological infrastructure that would allow any prospective partner to easily adopt and amalgamate into its business ecosystem. Tech and Banking marriage made in digital heaven.
FNB Zambia and Spar
First National Bank Zambia and Spar retail outlets announced their collaboration in Q2 this year. According to a statement published in the Zambia Daily Mail, “Commenting on the development, FNB Zambia chief executive officer Johan Maree said the partnership with Spar has given the bank an opportunity to expand its points of presence in line with its strategic goal of increasing accessibility for customers”. Fast forward to 13 September and CEO Bydon Longwe said that “With Cash@Till and eWallet@till, the bank was excited to introduce product enhancements that will revolutionlize how customers transact, particularly for this digitally savvy generation”
Through FNB’s introduction of services such as Cash@Till, this collaboration brings an interesting offering to consumers. For FNB, it has added value to the customer experience of its VISA card which has now allowed them to have bidirectional transactions on the go. For Spar, the value-added service makes them a preferable destination for shopping considering the extra banking services that are part of the shopping experience.
Decoding the Strategy
Game Theory provides an apt explanation to why we are seeing emerging collaborations. In game theory, “a cooperative game (or coalitional game) is a game with competition between groups of players (“coalitions”) due to the possibility of external enforcement of cooperative behavior (e.g. through contract law)”.
The aforementioned business collaboration scenarios are known as Cooperative games. Cooperative games are often analyzed through the framework of cooperative game theory, which focuses on predicting which coalitions will form, the joint actions that groups take and the resulting collective payoffs.
The coalitions that have formed provide all involved players an opportunity to create differentiation in the customer service experience. Through differentiation, it also extends to creating opportunities for business growth that may not have been realized had the collaboration not been in place earlier on.
All the scenarios discussed show collaborations that have potential to increase foot traffic into the business premises. It allows the parties involved access to a larger demographic of customer whom they can collect data from to give them insight into how to provide a better customer experience. It also presents an opportunity to present new products or value add products to the larger demographic of customer.
For the balance sheets for all involved in the collaborations, technology investment is the major asset that requires an increase in investment. Labour costs are marginally increased in terms of head count attribution. However, increasing diversity in skillsets may require increases in wages due to an increase in accountabilities. The impact of operations and maintenance costs can either be shared or weigh heavily on either host or tenant party. This is largely determined by the nexus of contracts that exist that enable the management of the relationship.