Savings and Credit Co-operative Societies (SACCOs) across the continent of Africa are embracing digitization rapidly to catch up with the fast changing business and financial services landscape globally.
Ranging from the use of digital core banking systems to customer support to tech-enabled information management systems, SACCOs are transforming age-old business models, facilitating greater efficiencies and better results for their members.
However, with this changes there comes a number of risks in data privacy and security — which many SACCOs have failed to properly mitigate so far,hence translating to disastrous consequences.
It is equally important to point out that, SACCOs have, for a long period of time, been community-led entities run through simple, traditional business management methods that include numerous manual forms to be filled, thousands of physical records and constant walk-ins to the administrative offices.
READ ALSO:
Farmers to face Ksh1m fine or jail for unlicensed ndengu farming
In a nutshell, this scenario is slowly changing in the wake of digital banking and a continuously evolving financial ecosystem across the world.
Why should SACCOs be digitized?
Digitalization is at its peak and let us get to understand why it is necessary to digitize a SACCO and here are some of the key reasons:
- Changing customer needs and preferences
It is critical to understand that, the world is currently going through digital revolution, changing the way of doing business virtually across the world. It all started after the COVID-19 impact, making the needs and preferences of customers change with the dynamic business and consumer landscape globally.
It is evident that, customers today do not have time to waste and believe in as much convenience as they can get, especially in financial service economy.
Awake to the increased penetration of mobile device users and mobile money services, it is now necessary to allow Sacco members access to financial services through their mobile devices anytime and from anywhere at their comfort.
Additionally, majority of the members of these SACCOs are small business owners away from centralized banking facilities.
To say the least, they need the best financial partner that can provide smooth functioning and quality services to grow their business with ease.
It is indeed true that, smarting from the drastic impact that COVID-19 had on the payment and financial services industry, the digitization of SACCOs has reached a wider customer base, including those who do not have access to traditional banking services.
- Enhanced efficiency
Digitization has really revolutionized the way SACCOs operate by facilitating enhanced efficiency and cost savings. In reality, by utilizing digital technologies such as cloud computing, mobile banking and artificial intelligence (AI), SACCOs can streamline their operations and increase their productivity by eliminating the need for manual processing and paper transactions.
In other words, digital technologies facilitate SACCOs to offer improved customer service and real-time access to their accounts information.
- Minimized Costs
It is something obvious that, when a SACCO becomes efficient, it automatically minimizes unnecessary costs. From automated payments to digital banking services, digitization has facilitated SACCOs to reduce their operational costs and more importantly focus on providing better services to their members.
In the presence of digital tools, SACCOs can now track transactions in real-time and reduce paperwork which ultimately translates to reduction in extra costs. This means, by digitizing their operations, SACCOs can minimize costs while still offering quality services to their members.
- Data Analytics
Having SACCOs embracing digitization in their operations sounds a great way to leverage data analytics and insights. Digitizing their operations, SACCOs can gain access to real-time data and analytics that they can use to make informed decisions. This facilitates them in understanding their customers better, managing their finances more efficiently and most importantly improving customer service.
In matters strategic planning, it also provides access to a back-up data that can be used to identify market trends and make predictions about the future.
That is to say, this kind of information can then be used to develop strategies that will help the organization meet its goals by identifying potential areas of improvement or areas where further investment may be needed.
- Improved security
Digitizing SACCOs translates to improved security by implementing various measures to protect sensitive data and transactions from unauthorized access, detect, prevent fraud and suspicious activities. However, SACCOs do it in the following ways:
- Data encryption to members’ personal information and account details is encrypted to protect them from unauthorized access and potential breaches.
- SACCOs can limit access to sensitive information and transactions to authorized personnel only.
- SACCOs can implement two-factor authentication, like passwords and fingerprints for accessing account information.
- AI-based security software can be used to detect and prevent fraud and suspicious activities
- Transparency
Having digital systems in place, records are easily accessible and updated in real-time. This basically allows every member of the SACCO to view their account balances and transaction history at any time and from anywhere, hence, creating a sense of transparency, accountability and confidence among the members.
This further, provides a clear and complete audit track, making it easier to track transactions. This assures that the information is accurate, up-to-date, and available to all members.
- Competitive advantage
Digitizing SACCOs facilitates more efficient customer service, since customers can access services quickly and conveniently.
Additionally, it also allows SACCOs to access and analyze customer data to better understand customer needs and respond with tailored solutions, allowing SACCOs to take advantage of new technologies and tools, which can help them to stay ahead of their competitors.
By Ben Oroko
The Writer is a Communications Practitioner and Correspondent Based in Kisii.
E-Mail:benoroko2000@yahoo.com
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
