Article by Claudia Appiah-Asiamah, the Chief Operating Officer, UBA Uganda
As we navigate the complexities of the modern financial landscape, it is clear that digital banking has revolutionised the way we access and manage our finances. To drive financial inclusion and empower individuals, businesses, and communities, banks must remain committed to harnessing the power of technology.
The State of Financial Inclusion in Uganda
Uganda has made significant strides in financial inclusion, with statistics from the Ministry of Finance, Planning and Economic Development indicating that overall financial inclusion in Uganda was recorded at 78% of the adult population in 2019, an increase from 54% in 2006. Of this, formal financial inclusion accounted for 58% compared to 28% in 2006. However, despite this progress, many individuals and small businesses still face significant barriers to accessing basic financial services.
The Role of Digital Banking
Today, digital banking has emerged as a game-changer in addressing financial services challenges. By leveraging mobile phones, internet banking, and other digital platforms, banks can reach the unbanked and underbanked populations, providing them with convenient, secure, and affordable financial services in real time.
Digital banking solutions offer a range of benefits that encourage financial inclusion. These include the ability to access banking services 24/7 from anywhere, reducing the need for physical branch visits; quick transactions, payments, and account management at any time; reduced fees, lower transaction costs, and potential savings; advanced security measures such as encryption and authentication; and the ability to reach underserved populations, rural areas, and those with mobility challenges.
Other benefits include immediate fund transfers and updates; tailored services, account management, and alerts; reduced paper usage to promote sustainability; instant customer support through digital channels; improved financial management tools such as expense tracking and budgeting; user-friendly interfaces with intuitive design; and expanded access to banking services for underbanked populations in both rural and urban areas.
Banks are committed to expanding their digital footprint and increasing financial inclusion through initiatives that make banking easier and reduce congestion in banking halls. For example, mobile banking enables customers to perform transactions, check balances, and pay bills using their mobile phones, provided they have a smartphone and data. Internet banking provides a secure and convenient way to manage accounts and conduct transactions online — for instance, a company can pay its employees without visiting a branch.
USSD banking allows customers to access banking services by dialling simple codes that do not require a smartphone or internet connectivity. Chat banking, an AI-powered chatbot available through social media platforms like Facebook Messenger and WhatsApp, enables customers to access both banking and lifestyle services — for example, UBA’s “Leo.” Cardless withdrawals also make it possible for customers to withdraw cash from an ATM without using a card.
The impact of digital banking on financial inclusion cannot be underestimated, as it has the potential to transform Uganda’s financial landscape, enabling us to reach more customers and drive economic growth. By embracing digital banking, we can increase access to financial services, improve financial literacy, and serve everyone.
At UBA Uganda, we are committed to leveraging digital banking to drive financial inclusion and empower individuals, businesses, and communities. Through technology and innovation, we are creating a more inclusive and prosperous financial future for all Ugandans.
