At the second round table of the 1st E&M-PwC Banking Forum, held on Thursday 18 April in Maputo, “The State of the Art of ESG, the Ongoing Digital Transition and the New Challenges of Cybersecurity and Artificial Intelligence” was the topic that brought together, for the first time, the CEOs and Chairmans of some of the main banks in the Mozambican interbank market. Nedbank, Access Bank and FNB, represented at the highest level, delved into the complexities of environmental, social and good governance (ESG) sustainability, and took a look at the challenges and opportunities brought by cybersecurity in the context of the digital transition of the financial system.
ESG adoption in banking institutions
Manuel Gameiro, NetBank Mozambique’s chairmans, shared the group’s pioneering experience in subscribing to some of the principles advocated by the ESG. “Our strategy is based on our fundamental purpose: to use our financial knowledge in favour of people’s well-being, creating value for families, companies and society in general. To this end, we have been developing and implementing various initiatives in line with the ESG criteria,” shared the chairmans.
Mr Gameiro also made it known that the group has set the year 2050 as the milestone for achieving zero greenhouse gas emissions, such as carbon dioxide. “We face this goal with prudence and clarity, aware that the transition is indispensable. We are fully committed to financing and supporting our customers in this process of change,” said the NetBank Mozambique chairmans.
Marco Abalroado, CEO of Access Bank, emphasised the implementation of ESG in daily operations and its positive impact on the real economy. “Sustainability is ingrained in our operation. We deal with diverse geographical challenges, but our mission remains: to drive growth, especially among SMEs, which are the heart of the economy,” said Abalroado.
Abalroado also emphasised the extremely strict credit criteria that Access Bank applies throughout Africa. “It is not feasible to adopt a uniform standard of credit guidelines across the continent, especially considering regional peculiarities such as those of mining in Congo, South Africa and Zambia. This represents a significant challenge to harmonise expectations,” he explained.
In the debate on governance, Peter Blenkinsop, CEO of FNB Mozambique, emphasised the First Rand Group’s commitment to ESG principles, applied through rigorous governance. “Every significant transaction is scrutinised through the lens of ESG, reflecting our dedication to long-term positive impact,” said Blenkinsop.
“We have an environmental, social and governance committee at the highest level of the bank. Any sizeable deal we do has to go through that and an audit to see if we’re meeting ESG objectives, especially in the larger deals,” he added.
Digital Transition, Cybersecurity Challenges and the Artificial Intelligence Frontier
Participants also discussed how digitalisation is revolutionising financial inclusion. Gameiro highlighted NetBank’s advances on this front. “We are reducing information asymmetries and democratising access to financial services with cutting-edge technology,” he said.
NetBank’s chairmans also pointed out that, “financial inclusion through the traditional method of establishing physical branches is costly and the return is often limited, given that the role of these branches goes beyond the commercial, encompassing a vital social function.”
“This is why digitalisation has emerged as the decisive vector for financial inclusion. Although it requires an initial investment in technology, the resulting economies of scale will far outweigh the costs associated with traditional expansion. The example of mobile wallets is emblematic: between 2008-22, we saw a 50% increase in the number of accounts, and more than 500% in the volume of payment transactions, showing the transformative impact of digitalisation on the financial system,” he explained.
Abalroado from Access Bank commented on the importance of digital transformation as an ongoing process at the bank, “digital transformation is not a project with a beginning and an end, it is a constant evolution that challenges us to better serve our customers and society.”
The PCE added that “the exponential growth of mobile wallets is testimony to the massive adoption of these services by the population, marking a notable departure from the reality of a few years ago. This progress represents a unique opportunity to strengthen our relationship with the community, extending our capacity to serve well beyond the 1% currently achieved. We are now in a position to expand our influence to the 50 to 80 per cent of the population that is still unserved, mainly due to the lack of concrete data on their location, activities and income.”
With cyber risks on the rise, digital security has become an unavoidable priority.
FNB’s Blenkinsop emphasised the need to rethink security strategies. “We need to balance technological advancement with appropriate regulation, avoiding the extremes of freedom that causes litigation or excessive control that stifles innovation,” he said.
He highlighted Nigeria’s success in implementing e-commerce and banking apps and expressed concern about the sufficiency of cyber stress tests, proposing a critical review of these practices. “The challenges of AI are enormous; fraud prevention strategies need to be more sophisticated than current cyber tests,” he concluded.
In line with this perspective, Abalroado from Access Bank shed light on digital transformation as a never-ending journey. “Digital transformation is not a project with a finish line. It’s an incessant process that accompanies us and challenges us every day,” he emphasised. He nostalgically recalled the days of past digital initiatives, emphasising the speed with which the world and technology advance.
Continuing the theme, he laid out a pragmatic view of the banking sector, “Contrary to predictions, traditional banking has not only survived the rise of FinTechs but has also grown stronger,” he revealed, pointing to a success story in microcredit. “In just one month, we lent 40 million dollars through our collaboration with M-Pesa. These are figures that show that risk can pay off.”
FNB Mozambique representative Blenkinsop shared the aspiration that Mozambique could reach technological milestones like those seen elsewhere: “The FNB app in South Africa is an example of what is possible. It transforms not only banking operations but customers’ lives by integrating diverse services,” he explained, but also recognised local realities, “We are a little behind in Mozambique, but there are no insurmountable barriers. Skills and technology are transferable; what we need is the will to move forward.”
Finally, the debate centred on the need for more balanced regulation that can protect against risks without inhibiting growth potential. “Current cyber stress tests may not be enough. We need strategies that really match the threats we face,” concluded the FNB representative, closing the forum with a call to action for stronger collaboration and a continued commitment to innovation and digital security in the Mozambican banking sector.
The panel highlighted that Mozambican banks are not just keeping up with global trends, but are proactively shaping the future of the financial sector by adopting sustainable practices, embracing digital innovation and strengthening their defences against digital threats.
The first edition of the Banking Forum, a joint initiative of Media4Development, the Mozambican publisher that owns Economia & Mercado magazine and the Diário Económico and 360º Mozambique portals, in partnership with the PWC consultancy, had as its theme “Banking and the Challenges of ESG and Digital Transition in Mozambique”.
The first edition of this Forum took place in a context in which the emerging challenges of ESG (Environmental, Social and Governance) and digital transition and transformation are central to Mozambique’s Sustainable Development and brought together, publicly and for the first time, the main CEOs of some of the largest national banking institutions – BCI, Standard Bank, Millennium bim, Access Bank, FNB and Nedbank, as well as the Mozambican Banking Association.
Watch the full video of the event:
