The African financial services landscape is undergoing a profound transformation as technology reshapes the traditional model of mass-market retail banking.
Driven by growing consumer demand for instant, personalized access to services, banks are shifting from serving broad retail segments to catering to a “segment of one.”
A survey by African Banker titled “African digital banking: Competing For The modern African customer”, reveals that retail banking remains the natural starting point for digital rollouts. This is because it offers the largest customer base and significant growth potential, particularly in reaching the 45% of Africans who still lack access to formal financial services.
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Digitalization in this segment not only supports socio-economic development but also lays the groundwork for expansion into SME, corporate, and investment banking.
According to 2024 research, 39% of African banks prioritise retail banking in their digital investment strategies, followed by 26% focusing on SMEs, 13% on corporate and business banking, and 8% on investment banking. While most banks begin with basic digital services balance inquiries, transfers, and payments, many now leverage technology to automate credit assessments, reducing loan approval times from weeks to minutes. This has expanded financial access, particularly in rural areas, enabling customers to bank 24/7 wherever internet access is available.
Two key forces are driving digitalisation which are:
Pull factors – Cost reduction, operational efficiency, and customer base expansion.
Push factors – Competition from fintechs and digital-first banks, which operate without the heavy infrastructure and legacy costs of traditional players.
The density of bank branches in Sub-Saharan Africa has been declining, from a peak of 4.5 branches per 100,000 people in 2015 to 4.2 in 2022. Increased access to financial services has instead been driven by mobile money, agency banking, and online platforms.
Despite these advancements, many customers remain offline as only 54.8% of surveyed banks reported that more than 40% of their customers use mobile or online services. While the share of Africans able to make or receive digital payments doubled from 28% in 2014 to 50% in 2021, borrowing access remains low at under 10%.
Bank Priorities For Digital Adoption
The survey identified operational efficiency as the top priority, with a strong emphasis on digitizing back-office operations, automating onboarding, and integrating advanced technologies such as AI and cloud computing. Expanding financial inclusion ranked second, with 56% of banks aiming to reach underserved and unbanked populations. Increasing market share through innovative offerings came third, with 57% citing it among their main goals.
Personalisation is emerging as a critical differentiator, with 42% of banks prioritising enhanced customer loyalty. Leveraging data analytics and AI, banks are tailoring products and services to individual needs, creating customised experiences that foster long-term relationships.
To deliver these experiences, forward-looking institutions are deploying next-generation digital banking platforms that integrate services, break down silos, and allow incremental system upgrades.
Cybersecurity also remains high on the agenda, with 41% of respondents investing heavily in advanced protections to safeguard sensitive financial data and maintain trust.
This shift in the digital transformation signals a new chapter for African retail banking one in which success depends not only on offering digital channels, but on delivering secure, personalized, and frictionless customer journeys that evolve alongside the needs of each individual.