Breathing life into Malswitch
Change is inevitable. It is the currency of progress. Yet, naturally, human beings resist change. Change occurs in two ways: Either positive or negative. Fear of the unknown is usually what breeds resistance to change.
John Fitzgerald Kennedy, the former president of the United States of America, once said about change: “Change is the law of life. And those who look only to the past or present are certain to miss the future.”
I am not surprised to hear that the Malawi Switch Centre (Malswitch), a one-time baby of the Reserve Bank of Malawi (RBM), which is involved in an integrated technologies business with core activities in electronic-payment and information technology infrastructure, has raised eyebrows over the move to launch the National Switch (Nat Switch).
In a nutshell, Nat Switch is a baby of the country’s 11 commercial banks in which will contribute a combined 10 percent out of the $3 million (K1 billion) required to implement Nat Switch, a shared switch platform, expected to go live by March 2014.
Largely funded by the World Bank through part of a five-year $28.2 million (about K9.8 billion) loan under the Financial Sector Technical Assistance Project (Fstap), the Nat Switch is expected to interconnect banking operations and financial transactions through automated teller machines (ATMs), point of sale (POS) devices, mobile banking, e-banking transactions, Visa and MasterCard gateway and other over-the-counter transactions.
But, as they say, ‘one man’s meat is another man’s poison.’ Whereas consumers of financial products such as you and me are eagerly awaiting the roll out of this switch that will link all banks as well as save customers’ time and cut on transactional costs, including transport, Malswitch’s survival is under threat.
Documents show that Malswitch, which could also connect to the national switch, gets 64 percent of its revenue stream from commercial banks through switching services, and with the national switch 75 percent of jobs could be on the line.
The beauty of Nat Switch is that once it is up and running, it will no longer be necessary for each commercial bank to have so many ATMs/POS devices to give customers the convenience they often look for when choosing a banking service.
In all aspects, the Nat Switch is a bodily blow for Malswitch. However, life must still go on for Malswitch.
By way of background, Malswitch was set up some 13 or so years ago to provide connectivity between financial institutions and other players seeking information technology solutions.
Unfortunately, from its inception, Malswitch’s Universal Electronic Payment System (UEPS) faced resistance from major players in the banking sector who opted to buy own switches or link to Visa or Mastercard platforms. Basically, the banks complained that the solutions Malswitch was offering were not ideal. This left Malswitch with only State-owned Malawi Savings Bank, Nedbank (Malawi) Limited, Indebank Limited, NBS Bank and Opportunity Bank.
With time, NBS Bank, MSB and Indebank each bought their own switches, leaving Malswitch with only Nedbank and Opportunity Bank as financial industry clients.
From what I gather, Malswitch has found itself in the current position where its technology is not as attractive to banks, as it were, due to delayed decision-making. It needed to act swiftly when banks gave a lukewarm response to its technology and offer what its customers, the banks, wanted.
But all is not lost for Malswitch.
During times of crisis or change like Malswitch is going through, I have always found soothing words of Charles Darwin, the British scientist (February 12 1809 to April 19 1882) who laid the foundations of the theory of evolution and transformed the way we think about the natural world. He said: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”
To adapt to change, Malswitch needs to change direction and the way it does business.
Opportunities abound for Malswitch. For example, Malswitch can strengthen its internet service provision (ISP) business using the Escom fibre cable it uses and compete with other ISPs such as Burco, MalawiNet and Skyband.
Malswitch can also take as its competitive advantage, its business with government where it provides applications for the payment system.
Really, all is not lost!
