With its innovative Engagement Banking Platform (EBP), Backbase has been engaged in providing its services to sure financial institutions deliver seamless and personalized experiences to today’s customers. For 20 years, the Dutch company headquartered in Amsterdam been empowering banks and credit unions to drive the future of banking.
With 12 offices worldwide and a strong partner network, the company supports clients both locally and globally. Its portfolio includes over 150 financial institutions of various sizes from different regions. “While technology is a key strength, our real asset lies in the knowledge and experience we’ve gained through close partnerships with our clients. We have a solid presence in Africa, particularly in South and East Africa, working with clients like Mauritius Commercial Bank, Standard Bank Group, and I&M Kenya. In the North and West, we serve clients such as Libya Islamic Bank and BIAT Tunisia,” says Nohaila Ibn El Farouk, Backbase Executive sales Director for Europe, Middle East, and Africa (EMEA).
“As internet penetration increases, digital banking solutions that don’t rely on physical branches will be particularly effective. Fully digital institutions like Tyme Bank in South Africa, Mizan Neobank in Kenya with its Islamic banking offering, and Orange Bank in West Africa are paving the way. However, for the large population in rural and remote areas, USSD mobile banking remains a viable solution for those without smartphones,” she argues.
Recently she spoke with New Business Ethiopia about Backbase’s services and its operations in Africa and future plans to work with financial institutions in the continent.
Below is the excerpt:
New Business Ethiopia: What are their major services and products?
Nohaila Ibn El Farouk: We are a software company offering our main product “ Backbase Engagement Banking Platform”. Backbase is an omnichannel digital banking platform that provides banks with one central system of engagement that orchestrates frictionless journeys across all touchpoints, at every stage of the customer lifecycle. From client onboarding, servicing, loan origination and investing. We recognize that digital transformation is not only for end users but also internal users within the bank, hence we offer our employee portal to provide an end-to-end seamless digital experience.
New Business Ethiopia: What is your take about the banking sector in Africa and the way forward in terms of using the latest technology and reaching the unbanked segment of the society?
Nohaila Ibn El Farouk: Africa’s banking sector has made significant strides, particularly with the rise of mobile money, digital banking, and fintech solutions, which have extended financial services to many previously unbanked individuals. This transformation isn’t just a technological upgrade but a fundamental shift in how financial services are accessed and delivered across the continent.
According to the World Bank, between 45% and 50% of people in Africa now have access to banking services, with North Africa on the higher end of this range. While this is a promising sign of increased financial inclusion, it also reveals a substantial gap: around 55% of the population still lacks access to essential financial services like savings accounts, credit, and digital payment systems.
Bridging this gap is both a challenge and an opportunity to enhance financial inclusion and improve the economic well-being of millions in the region. Mobile banking has been a game-changer in Africa. With services like M-Pesa in Kenya, the continent has become a global leader in mobile financial services, providing millions with access to financial tools, even in areas where traditional banking infrastructure is lacking.
However, despite its rapid growth, Africa’s banking sector faces significant challenges. Many regions still lack the infrastructure needed for traditional banking, such as physical branches and reliable internet access. The continent’s diverse regulatory environments add another layer of complexity for both local and international banks.
Additionally, a general lack of trust in formal financial institutions complicates efforts to broaden financial inclusion. From my experience and daily conversations with clients and banking sector experts, I can confidently say that technology will be crucial in reaching the unbanked in the future. Mobile and digital banking will continue to play a vital role. Expanding the network of mobile money agents and integrating services like savings, credit, and investing into mobile platforms can further drive financial inclusion.
As internet penetration increases, digital banking solutions that don’t rely on physical branches will be particularly effective. Fully digital institutions like Tyme Bank in South Africa, Mizan Neobank in Kenya with its Islamic banking offering, and Orange Bank in West Africa are paving the way. However, for the large population in rural and remote areas, USSD mobile banking remains a viable solution for those without smartphones.
Partnerships between traditional banks and fintech companies can accelerate the development and adoption of innovative financial solutions. Collaboration with telecom companies is also crucial, as they provide the infrastructure and reach necessary to support mobile banking services.
Leveraging big data and artificial intelligence can help banks better understand and serve their customers. AI can be used to develop more inclusive credit scoring models that consider non-traditional data points. Data analytics can also personalize banking services, enhance customer engagement.
Governments and regulators need to support environments that encourage innovation while safeguarding consumers. Harmonizing regulations across the continent can also facilitate cross-border banking services and investments, further driving growth and inclusion in the sector.
Finally, increasing financial literacy is essential for driving the adoption of banking services. Educational campaigns through mobile platforms, social media, and community outreach can inform people about the benefits of formal financial services and how to use them effectively.
New Business Ethiopia: And what are the challenges you are trying to address by introducing your services, especially on African content?
Nohaila Ibn El Farouk:
We are focused on addressing several key challenges in the African banking sector:
1. Financial Inclusion: We help banks provide digital banking services to underserved and unbanked populations, making financial services more accessible, especially in remote areas.
2. Digital Transformation: Our platform modernizes outdated banking systems, enabling banks to streamline operations and stay competitive in the digital age.
3. Customer Experience: We offer a seamless omnichannel experience, ensuring consistent and personalized experiences across all customer touchpoints.
4. Infrastructure Gaps: We enable banks to deliver effective digital services even in regions with limited physical banking infrastructure and unreliable internet connectivity.
5. Regulatory Compliance: Our platform helps banks navigate diverse regulatory environments while innovating and expanding their services.
6. Trust and Security: We provide robust security features to protect customer data and build trust in digital financial services.
7. Partner Ecosystem: Our platform integrates easily with other fintech solutions, helping banks expand their service offerings and have more flexibility offering tailored offerings and products.
New Business Ethiopia: What makes their services different or unique from others? (Which type of business or companies need your service? Why do companies work with you?)
Nohaila Ibn El Farouk: We mainly partner with banks that are looking to upgrade their legacy systems or enhance their current digital offerings. Banks choose Backbase for several reasons: our cutting-edge technology, which drives innovation and architecture flexibility, our focus on delivering an exceptional customer experience, our ability to scale and adapt to the customer needs as well as our seamless integration with existing systems. Additionally, our strong security provides the reliability and protection that banks require.
New Business Ethiopia: Anything you would like to stress in relation to your products and services and its relevance to companies operating mainly in Africa and beyond?
Nohaila Ibn El Farouk: As I mentioned, we’ve worked with clients across various countries in Africa, each with unique needs, business goals, and regulatory environments. Despite these differences, our platform’s flexibility has allowed us to effectively meet the diverse requirements of each client and adapt to their specific expectations.
We also understand that technology is one part of the equation, banks should also focus on their strategy and unique offerings. Cultural differences can significantly impact the success of digital initiatives. For instance, while M-Pesa achieved great success in East Africa, similar efforts in North Africa haven’t been as effective due to differing market dynamics.
We understand that quite well and beyond providing our software, we also assist our clients in developing their digital strategy to align technology with their bank’s overall strategy and country’s vision. Our value-added consulting services help them craft a strategic roadmap that integrates our solutions effectively, ensuring they get the most out of their investment and achieve their long-term goals while putting the customer at the heart of everything they do.