Friday, 14 July 2017

Zimbabwe's Bond Notes And Archaic Banking Systems

Success or Failure
My recent experiences with my bank have shown me that our banking system needs a complete overhaul. I have seen queues growing and being told that there is no cash available. I have had my money transferred and getting lost in our banking systems. 

The fin-tech overhauls are necessary if we have to make our banking systems work. The cash shortages and bank queues are symptoms of archaic traditional systems and technology which is still being used by most of the banks. 
I suggest we get rid of the RTGS , the Reserve Bank of Zimbabwe force bank to adapt to new technologies and give the Bond notes the respect they deserve. I will discuss how and why below.

REAL TIME GROSS SETTLEMENT SYSTEM
 

Our economy and the world is going digital at a fast pace than the banks can match. Our banks still talk of  RTGS as if it is real time. It is not!! Real Time must be real time, not four weeks or four days it must be real time. It must be immediate.

REGULATED OR FORCED ADAPTION
The general banking public and I in particular needs improved customer service and products. I want my bank to have effective and efficient data. I need to bank with a bank that meets all regulatory requirements.  All my banks have archaic legacy core software systems, implemented decades ago, are letting me down. The Reserve bank must put in place regulations that force banks to replace old systems and adopt new financial technologies.
 
INCENTIVES ON NEW TECHNOLOGIES 
Cash or plastic money
It's a fact that adopting new technologies is costly in terms of retraining and retooling. Government via the Reserve Bank must offer incentives and tax rebates on training and waiver customs and exercise duty. These costs are deterring most banks from even trying to overhaul their systems. 

THE BANKING PUBLIC ATTITUDES
We have blamed banks and the Reserve of Zimbabwe for the queues and cash shortages.However, this is a mistake, the banking public has to familiarize themselves with the new technologies use this knowledge to reduce the queues and avert cash shortages in our economy.
I believe the Reserve Bank of Zimbabwe and banks are doing very little to familiarize the banking public on new technologies and persuading them to use the new technologies such as mobile banking.
 
BOND NOTES FUNGIBILITY 
The bond notes are now being used as a currency. They can cross the borders of Zimbabwe and can be moved from bank to mobile wallets. The fungibility of the bond notes is the cause of its shortage in our banking system.
Bond notes are crossing our borders 





The bond notes fungibility is higher that of neighboring countries notes. This is a positive development but our banks, including the Reserve Bank of Zimbabwe, still treat the bond note as a surrogate currency. It is time for the research on the movement, value, and quantity of the physical bond notes. The Reserve Bank of Zimbabwe can use this information to carry out market operations by printing the deficit in the physical bond notes in order to wipe out the bank queues and cash shortages. 

The reduction of bank queues and cash shortages is the responsibility of the Reserve Bank of Zimbabwe and the banks.The banking public expects action and results from them.

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