(Ecofin Agency) - The report reveals that 76% of banks surveyed in 35 African countries rank digital transformation among the top three priorities in their growth strategies, with 24% considering it important.

Facing fierce competition from fintechs, neobanks, and telecom operators increasingly venturing into financial services, 60% of active banks in Africa claim to have already digitized most of their operations. This is a finding of a report published on May 31, 2024, by digital banking technology provider Backbase and African Banker magazine.

Titled "The African Banking Digital Transformation Report 2024," the report is based on a survey of executives from 155 banks of various sizes operating in 35 countries across different sub-regions of the continent.

Slightly less than half of the banks surveyed claim to have digitized more than 75% of their operations. Additionally, 28% report having digitized between 25% and 50% of their activities, while 12% have undergone minimal digital transformation, affecting less than 25% of their operations to date. This suggests there is considerable room for further digital adoption in the banking sector across the continent.

Moreover, 36% of the banks surveyed consider digital transformation their main priority, 40% place it among the top three priorities in their growth strategies, and the remaining 24% view it as important.

While the majority of African banking sector players see digital transformation as a key element of their growth strategies, fewer allocate significant financial resources to digitize their services and better withstand competition from agile new entrants. Indeed, 25% of African banks spend more than $3 million annually on digital transformation. About 22% allocate an annual budget between $1 million and $3 million, while 32% spend less than $300,000.

In the current year, banks operating on the continent are expected to focus their digital investments primarily on retail banking (39.5% of respondents), the small and medium-sized enterprises segment (26.3%), and corporate banking (13.2%).