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Banking sector must leverage off AI — First Capital chief



FIRST Capital Bank chief executive Tapera Mushoriwa says Zimbabwe’s banking sector should leverage off global technological advancements such as artificial intelligence (AI).
Speaking at this year’s Banks and Banking Survey Awards ceremony held in Harare on Thursday, Mushoriwa said global consideration for AI in the banking sector has increasingly garnered traction in recent years.


“Intelligence algorithms that can assess credit risk, detect potential defaults or accurately calculate probability of default, and recognize fraudulent activities carry welcome implications like increased productivity and cost benefits that have become widespread in global financial markets,” Mushoriwa said at the Banks and Banking Survey Awards ceremony held in partnership between First Capital Bank with the Zimbabwe Independent.

“Zimbabwe’s banking sector can also leverage off these technological advancements.”

He said across the globe macro-economic conditions are changing, making it imperative for all organisations to adopt and/or adapt to stay afloat.

“Zimbabwe is no exception, we have faced challenges as a country, challenges that have tested our resolve, indeed such challenges have forced us to innovate and find pathways of growth in ways never thought possible,” Mushoriwa said.

“At industry level, the banking sector has not been spared, but we too have displayed sheer resilience that has kept us moving forward, even more so in the last two quarters.”

He said the economy has experienced increased dollarisation, pointing out that key to the higher US dollar flows in the formal banking sector have been the mining and agriculture sector.

Mushoriwa said the US dollar flows have played a key role in driving a rebound in forex cashflows in other sectors of the economy which, in turn, has enabled players in these various sectors to retool and re-energise their operations, setting the stage for stronger performance in years ahead.

He said the growing base of US dollar deposits has been instrumental in the strengthening of banks’ balance sheets and reduction in currency risks.

“While all these positives have provided the sector with room to reorganise itself, questions over the sustainability of the USD as the primary currency of trade and, by extension, the banking industry’s operations, have echoed louder,” Mushoriwa said.

“What measures are in place to ensure NPLs [non-performing loans] — which have increased —  remain well below the 5% benchmark? The market is short in USD liquidity and therefore earnings are flat, in some cases compressed vis a vis growing cost base.” Mushoriwa said confidence concerns remain strong hence the US dollar remains in the growing informal sector.

“Credit fuels economic expansion. These are a few of the questions that have kept the sector’s leaders up at night,” he said.

“This calls for solutions that will see the banking sector moving forward regardless of the challenges that lie ahead – sustainable solutions.”

The FCB chief executive said attracting foreign direct investment and lines of credit becomes key and complementary to efforts for formalisation of deposit efforts.

“However, it is key for the banking sector to ensure that there are strong and best practices policies and practices on ESG,” he said.

“The Reserve Bank of Zimbabwe has been leading efforts on the Global Reporting Initiative through OECD which provides guidelines for use by organisations, especially us banks, who are intermediary players to organisations, on the economic, environment and social dimensions of their activities, products and services.”

Mushoriwa added: “In finding answers to these questions, we are charged with several issues that encompass sustainable finance, rebuilding confidence, artificial intelligence (AI), digitisation, financial inclusion, collaboration, smart partnerships, forging international alliances, and regional integration. This of course must be underpinned by increased transparency.”

He said as a sector, they have begun aligning their growth with sustainability in mind, as is now the norm in other countries.

“We are funding green projects, supporting micro-small and medium-sized enterprises: MSMEs, and uplifting the underprivileged and vulnerable groups in our society, among many other initiatives,” Mushoriwa said.

“The banking sector is reducing its carbon footprint by harnessing solar energy in its operations, increasing the use of recycled materials, and going paperless with the help of digital platforms. Taking a more expansive view, forging alliances with international partners and integrating with other regions has never been more imperative for us.”

He said free movement of capital enhances allocative efficiencies, attracts capital, and can open doors for improved macroeconomic stability.

“Again, we have a lot to do, and steps on the continent albeit slow are in the right direction such as Africa Trade and Pan-African Payment and Settlement System,” he said.

He said as First Capital Bank, they are ready to play their part and collaborate with others.

“We look to facilitate growth for all our stakeholders within our chosen markets, not only limited to financial solutions but also including interventions such as these events and supporting the communities in which we operate,” Mushoriwa said.

The Banks and Banking Survey Awards ceremony were graced by Reserve Bank of Zimbabwe governor John Mangudya, European Union ambassador to Zimbabwe Jobst von Kirchmann, First Capital Bank Limited board chairperson Patrick Devenish, Alpha Media Holdings group CEO Kenias Mafukidze, Pax Africana Holdings Pvt Ltd chief sustainability consultant Ndumiso Hadebe, African Sustainability Consultants representative Tawanda Muzamwese and several banking executives and captains of industry and commerce.

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