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Keep pace with fintech trends, build partnerships: Mangudya

BELOW is a speech by Reserve Bank of Zimbabwe governor John Mangudya read on his behalf by the central bank’s director bank supervision Phillip Madamombe (pictured) at the launch of National Building Society (NBS)’S Corporate and Institutional Banking (CIB) Division in Harare on May 5:

i am representing the governor of the reserve Bank, dr John p mangudya, who cannot be with us this evening due to some prior work commitments.

it is a great pleasure and, indeed, an honour for me to be part of this evening’s ceremony, which marks the official opening and launch of national Building society’s (nbs) Corporate and institutional Banking (CIB) division.

i wish to thank the nbs Board and the managing director, mr tapera mushoriwa for inviting the reserve Bank to witness this milestone.

Banks’ intermediary role

as you are all aware, banking institutions are the bedrock of the financial sector as they play a critical financial intermediary role in the economy. Through their intermediary role, banking institutions have the power to redirect capital to accelerate the pace and scale of positive change in our economy.

on its part nbs has largely been contributing to national development through financial inclusion and housing development. This focus is in line with Zimbabwe’s vision of becoming an upper-middle income economy by 2030 and is in support of the national development strategy 1 (nds1) (2021-2025), whose overarching goal is to ensure high, accelerated, inclusive and sustainable economic growth, as well as socioeconomic transformation and development.

Business model

The global economy and financial systems are yet to fully recover from the adverse effects of the Covid-19 pandemic, the rising geo-political tensions, supply-chain disruptions are contributing to global banking system turbulence.

The Covid-19 pandemic, spill-over effects of geopolitical crisis has stress tested financial institutions balance sheets in terms of operational resilience and sustainability as well as going concern.

post these disruptions, financial institutions including nbs are expected to contribute to sustained recovery of economies.

it is only strong and resilient institutions can play a meaningful role in supporting sustainable, inclusive economic growth and development.

nbs’ realisation of the strategic need for entering the corporate and institutional banking space, is a reflection of a deliberate strategy to align the business model to the vision of supporting industrialisation though offering a bouquet of corporate banking products and to enhance stakeholder value in a fast-changing world, thereby ensuring the long-term viability of the institution.

This strategic thrust to on-board corporate and institutional businesses will help diversification of the institution’s funding sources and strengthen the nbs balance sheet and thus contribute to institutional sustainability.

Corporate governance, risk mgmt

Financial crises experienced all over the world indicate that banks by the virtue of their financial intermediation and maturity transformation roles, are inherently fragile and prone to turbulence, hence the need for us to reflect on the necessity of maintaining certain safeguards and high standards.

We trust that as nbs on-boards the corporate and institutional businesses, it will continue to strengthen its corporate governance and risk management systems in order to manage the attendant risks and give impetus to its mandate of contributing to national development through housing delivery and financial inclusion.

Furthermore, as nbs repositions itself, it is critical that it adopts sustainable banking practices and make impact in the corporate and institutional banking space. nbs should endeavour to profitably deliver sustainable social, economic and environmental solutions within its Corporate and institutional banking activities.

Technology leverage

Cognisant of the evolution in the digital world, we encourage the building society to ride on the technology wave to optimise service delivery as technology has inevitably become the future of banking.

The RBZ, as regulators emphasise the need for banking institutions in general, and nbs in particular, to keep pace with fintech through leveraging on big data and forging partnerships with technology firms to develop digital solutions at lower cost and increased efficiency.

Conclusion

in conclusion, let me remind you that most importantly, as banking institutions are the key pillars for savings mobilisation and resource allocation, payments infrastructure and economic development, the delivery of their services is primarily premised on trust, and as such have a fiduciary responsibility and duty to protect the integrity and reputation of the banking system, to engender public trust and confidence in the financial system.

let me also remind you of the need to continuously evolve and review your areas of comparative advantage in order to remain relevant, effective and strategic by tapping into vast opportunities in the financial sector and transforming your institutions by making sustainability the key focus.

For nbs, to truly impact on the country’s development agenda, you are expected to continue to re-engineer your institutions’ operations to deliver on the goal of contributing to economic development with the highest level of professionalism and integrity.

Congratulations and best wishes on your successful launch of the Corporate and investment Banking division. may your business prosper in the years to come.

i thank you.

NBS

en-zw

2023-05-26T07:00:00.0000000Z

2023-05-26T07:00:00.0000000Z

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