Understanding the Future Market




The Ethiopian finance sector might seem a bit ramshackle from a distance, but it is and remains a lucrative and attractive enterprise.  It faces the challenge of transitioning from traditional way of doing things to one to the world of modernity and innovation. We have seen many banks and insurers adapting technology like core banking and insurance software packages and that is a great thing. The use of credit cards, ATM and mobile banking are some of these examples.

In the last decades of developmental thinking, it became apparent some forward thinking leaders were pushing for innovation but were meeting with resistance from their higher ups.

The underlying debatable issue of 21st century’s innovation is whether lifespan of technological products will offset cost incurred to acquisition and training in the short run. The pace of change leaves no room until trained human resources and better customer service reaches to the consumer. Because of such reasons traditional leaders develop business anxiety and abuse their leadership and prefer swimming in the existing pods. This is really perilous and will drag companies back to square one.

We may argue on top of the amount of deposit mobilization and gross written premium the sector holds and would like to be rewarded in terms of bonus and salary increment. I am not opposing theses parameters and denying their motivating power in our perspective but things are changing and we should make sure that they stay longer, both in the executive desks and even within the purse of insurance employees.  Such parameter does not allow companies to navigate in the dynamics of business and intense completion.

Only current capacity and current technology rewards every member in the sector adequately and fairly. The sector is in need of new product developments and weak in regional competition has become the norm instead. The rank of banks and insurers lie within the range of 100 to 120 financial companies in Africa. This implies how we are currently trading in the 21 century and that we are our own competitor and each of us champions.

We may shift the downward curve of hard currency trading locally through technology attracting as large foreign customer. By building our capacity to compete in tomorrow’s market of the sector which is an inevitable for international companies. The challenge will come very soon. Regional financial sectors are welcoming one, but we are fondling marketing myopia and averting competition while rationalizing ‘fear of the unknown’

How many banks and insurances are here in Ethiopia, Djibouti or South Sudan?

I wonder when we are going to reach the international market. These questions will lead us to the potential challenges that stun regulator’s appetites to seek the best cake which is international experience and global competition. The sooner, the better. We have to decide what will bring about optimum return to the nation even to the extent that citizen has to dwell, as to access to WTO.

Why are we fearing real competition?

The Ethiopian financial sector is significantly influenced by local thinking and relatively inefficient technology (automation is not last resort). That is because of inconsistency and sustainability emanating from serve three different ideologies two of   them are defeated respective of their chronology. Another challenge is yet to come and from Ethiopian economic growth trends and the country’s capacity of attracting international companies and ever increasing of technology, facing a new and emerging risk

In the international market the financial industry is not a single market governed by a single regulatory regime, but a number of separately regulated, related markets. This is the fact for African financial institutions. I hope there will be an African market, which is big enough to bring technology and competition, to see it grow and prosper. Our readiness seems we are the tail in the continent both in terms of regulatory capability and operational performance. Our rank reflect the fact.

We need to shift the focus swiftly and vigilantly debate the future market and it is an inevitable one. We need to have strong bankers and insurers in terms of capital technology and human asset. The first and foremost is the human capital particularly leadership who can adequately solve international assignments and challenges. We really should love competition which is inalienable and incarnate with the biology of business.

That is the avenue of being a trans-national company through which we ride to the world market.



By Asseged G/medhin G/Mariam


Published on Jan 03,2017 [ Vol 17 ,No 870]


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