Courtesy of strides in information and communication technology (ICT), few individuals and organisations still undertake transactions manually.
From industrial production processes to making payments, bookings and all, ICT has simplified the way business is conducted.
Today, one does not need to physically visit a travel agent to buy an air ticket as they can do the same in the comfort of their home, office or any corner. With a smartphone or computer, both the booking and its subsequent payment can be made online.
Some fast food outlets have also embraced ICT as they have in place facilities that enable customers to buy food online and have the same delivered at their door steps.
The financial sector has not been left behind. In recent years, commercial banks have introduced ICT-based services that have transformed the way banking is done.
Such platforms allow customers to carry out banking transactions such as funds transfers and bill payments from any corner of the world without stepping their foot in a banking hall. The beauty of it all is that online banking can be done around the clock.
Banks deserve a round of applause for introducing services that save customers’ time while giving them convenience. I will not talk about the cost that comes with the services, that is a story for another day.
However, there is still room for improvement in service delivery, especially on interbank money transfers by individuals or businesses. The delayed clearance of such transfers causes inconvenience and defeats the whole purpose of electronic banking.
Most electronic money transfers, both domestic and international, use the platform called Swift standing for Society for Worldwide Interbank Financial Telecommunication network. The network works more or less like a messaging protocol such that the information may not be passed on directly from one bank to another. What this means is that when money is transferred from one bank to another, there is no instant transfer of funds per se, but mere instructions to credit the beneficiary account.
That said, it is my humble plea to the Reserve Bank of Malawi (RBM) in partnership with the Bankers Association of Malawi and other stakeholders to revisit the interbank electronic funds transfer system, especially the arrangement where the system goes to bed at night or takes a break on weekends and designated public holidays.
Currently, it works in a way that if I transfer money from my account held at Standard Bank Malawi plc to a customer holding an account with National Bank of Malawi plc or FDH Bank plc, the funds may not be cleared the same day, especially if transferred in the afternoon. It is worse on weekends and public holidays as the transferred funds may only be cleared on the next business day or after.
Ironically, if I carry out the same transfer, but from my bank to mobile money platforms, notably Airtel Money and TNM Mpamba, the transaction is instant. Is the transfer of values from bank platforms to Airtel Money or TNM Mpamba not regulated by RBM as regulator of financial services? If yes, then why the difference?
Malawi is still a cash society where many people transact using hard cash. However, if we are to promote embracing of digital services, then fine-tuning services such interbank electronic funds transfers will be one of the major incentives for improved uptake.
I understand that RBM set clearance times for interbank transfers. It is high time there was flexibility in this area to improve the speed of interbank electronic money transfers in 2022 and beyond.