International banking on the rise in Africa

By Nina Kinyany, Head of Distribution, for International Personal Banking Africa Region Stanbic Bank

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Opportunity beckons in Africa as markets mature, incomes grow and trust in financial services increases. This is driving the need for bespoke Wealth Management and Banking solutions which can be delivered seamlessly in any country, across the continent and offshore.

The recent political changes in Zimbabwe, for instance, have opened the door for the repatriation of money back into the country, while there is a shift to externalize funds in economies that have exchange controls

Exchange controls and policy changes, together with political stability remain crucial factors dictating levels of demand for International Banking solutions. Namibia is a good example of a country which has reviewed its exchange controls and is, therefore, experiencing far more interest in offshore banking solutions. Externalisation of money from a country like Kenya, in contrast, remains high due to the large number of International organizations, NGOs and foreign multi-nationals headquartered there and in need of sophisticated international banking solutions.

The local political environment will continue to contribute strongly to any future increase or decrease in of Wealth in Africa – at 51% (according to Knight Frank) this factor is much higher than the 14% globally). A lot of decisions will, therefore, be made based on the political conditions and regulations in place and these need to be well understood.

Ghana and Nigeria have complex economies and regulations and at Stanbic, we remain in regular contact with decision-makers at their central banks to ensure we know how best to manage the international flow of money on behalf of our increasingly mobile client base.

At the end of the day, increased wealth is driving the need for advanced, bespoke international banking solutions. In the recent Knight Frank 2018 Wealth Report, 76% of African wealth managers say they expect their client’s wealth to increase in 2018 compared with a global average of 67% - and more of these affluent individuals are looking for international personal banking solutions.

One of the major trends in the mass affluent space at the moment, for instance, is putting away money for children’s education. This is often housed in College Trusts so that children can be sent to colleges in countries like the US, UK, and Australia to gain international exposure. Noticeable demand for these types of externalised solutions are seen in Kenya, Nigeria, and Ghana. According to Knight Frank, 43% of those in Africa expect to send their children overseas for their education compared with a global average of 41%.

All of this means individuals and their families need to spend more time planning to meet their goals – especially if these goals need to be paid for in a more expensive foreign currency.

Saving for a rainy day and for retirement are other major trends as more people realise they do not want to become burdens to their families. This entails quite a big shift from the traditional thinking of life insurance, investment and health management solutions increasingly needed for individuals and corporate customers.

As Africa’s largest bank by assets, Standard Bank believes peace of mind comes with effective forward planning in a goals-based financial plan. The level of complexity within markets has heightened risks, ushering in the need for specific expertise across a broad spectrum, from investment specialisation and system sophistication to the management of endowments, retirement funds, and institutional mandates, among others. At the same time, absolute discretion and confidentiality are crucial.

But just because your money is not on the same continent or country as you, does not mean you cannot have control over it. An international banking account is one of the best ways to open the door to a vista of opportunities, including personalised and 24/7 digital service wherever you are. One account enables you to access foreign exchange, savings, and other structured products.

These solutions are available today and can ensure the seamless movement of money across the continent. If you need to make payments abroad, have children abroad or want to diversify investment or have international transactional needs, it is all at your fingertips.

Access and control over international funds and transactions is certainly a reality today and as Africa continues to grow, demand for these services will only continue to increase. Standard Bank – Africa’s largest bank by assets and with a footprint in 20 countries in sub-Saharan African, as well as in Jersey, the Isle of Man and London – continues to provide international solutions that matter to individuals, families, and corporates.

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