Technology experts have predicted that by year 2025 to 2030, a market economy could readily emerge without banks, as we have traditionally known them.

Consequently, they urged banks in the region to embrace technology and redefine their operations models to meet the emerging demographic and social change or lose relevance, as more core banking services would be delivered outside the regulated banking industry.

The experts warned that the current shape and makeup of the banking industry in Africa and particularly in Nigeria is inevitably going to change.

The sheer scope and speed of evolution in customer behaviour, technology, changing market dynamics and aggressive non-bank competitors such as telcos and technology companies mean banking in the future cannot simply be a continuation of banking as it has been.

Scores of industry stakeholders including bankers, financial analysts, media, risks analysts and financial technologists who gathered in Lagos at the eNNovators Breakfast Series (EBS) 10, organised by financial technology magazine agreed that for banks to continue to be relevant, management of the banks should invest heavily in technology, rediscover and reassert their roles in society and connect with  millennial generation aspirations.

Experts at the interactive knowledge-sharing EBS, which has as its theme 2025: the End of Banking as We Know IT agreed that Central Banks across Africa require a radical orientation. They informed that Central Banks need to change their mindset and approach, as currently banking regulators  appear to be focused on tactical responses and their strategic objectives for the future of banks and banking are clouded by political expediency and the ‘too big to fail’ debate.

Emmanuel Agha, CEO of Innovectives, an e-payment company, who presented the lead paper, which is a summary of PricewaterHouseCoopers’ research on “The future shape of banking – time for reformation of banking institutions”, explained that banks are facing rapid and irreversible changes of which the current models are no longer sustainable into the future.

According to him, while the PwC paper did not looking at the end of banking as a grouping of services focused on meeting financial needs, it is imperative to look at the end of banking and banks as we currently know them.

He warned that a failure to adapt could also mean the end of some regulatory bodies and instruments.

Agha explained that the substitution of non-bank providers of banking services is a challenge, which does not reflect in banking regulatory frameworks, or yet – fully at least – in policy and regulatory change agendas.

The Innovectives CEO argued that, “the challenges and dilemmas posed by the parallel changes in technology, customers and revolution are not confined to the incumbent banks or even the non-bank pretenders. Banking policy and regulatory community would face its own challenges and struggle for relevance”.

Quoting from the research, Agha painted a future with three fundamental hypotheses. The first is a future in which core banking service delivered outside of the regulated banking industry. The second is a situation where banks still have advantages but – to be part of the future – they need to invest heavily, rediscover and reassert their core role in society, and secure the ongoing support of policymakers.

The third harped on regulators, regulation and the need to radically change orientation, realignment “from policing to protecting and with public policy shifting its focus – to some extent – from institutions to markets and services”.

Also speaking, Chinenye Mba-Uzoukwu, managing partner, Grand Central, who presented supporting paper noted that bankers today are challenged intellectually and managerially to respond to a socio-economic formation undergoing radical change.

According to him, “A banker is challenged to claim a role in the emerging dispensation or be shunted aside by the more professional group outside the sector. He faces the task of redefining his roles and relationship; his competition and alliances; his goals and mission. His key resources in this new dispensation are information technology”.

He stated that one might state unequivocally that the extent to which “a financial institution commits to, and implement a pervasive deployment of IT tools and strategies will be the primary indices for accessing growth and longevity in the new dispensation”.

He therefore identified several drivers of the new dispensation to include convergence, ubiquity, omniscient, elastic, infinite and speed.

Others are diversity, personalization, free, fragility and openness.

In his reaction, ‘Deremi Atanda, executive director, SystemSpecs Limited, argued that technology will continue to be a major disruptor across all industries, particularly in banking.

Atanda said technology itself now rides on social trends as against technology leading social trends as it was largely before now.

He also warned the regulator that technology innovation especially those that emerge based on social trends can hardly be legislated.

He said there would be a deeper interface and partnership between the banking industry and technology providers. According to him, more banks will exit being “IT Businesses” and leverage multi-layered and multi-partner technology services collaborations. Besides, he predicted that it would become increasingly difficult for banking brands to present themselves strictly as banks because technology firms are already presenting themselves as banks.

He disclosed that major technology innovations will be birthed in the banking environment, which will lead the redefinition of banking, and these will attract global attention and promotion of these local technologies to the global landscape.

“Disaggregation of the banking industry will continue to be accelerated with the emergence of smaller trust units that offer multiple services of which “transformed contemporary banking” will just be one of their services,” he submitted.

Also, Niyi Ajao, executive director, Technology and Operations, Nigerian Inter-Bank Settlement System (NIBSS), said managing a transformation programme of this scale would be a huge challenge for most of the banks in the region.

He however explained that banks do not need to do all of this in-house, since at least some of the innovation and technology work can be achieved through partnerships.

Collins Onuegbu, executive vice chairman, Signal Alliance, said banks have to invest heavily in customer service and operational innovation, at least at the pace and standards set by telcos and technology companies that are gearing up to provide banking services. “The banks must change their mindset. They must stop treating their customers just as numbers,” he warned.