How technology is changing the face of Commercial Bank of Ethiopia
The computerized database system was nonexistent at most of the branches of Commercial Bank of Ethiopia (CBE) at the time I joined the bank. We used to calculate interest and prepare monthly transaction reports manually. The process was prone to mistakes and sometimes reports were delayed by several months due to data inconsistencies and difficulties in finding out where the mistakes happened.
Simple cash withdrawal process used to take up to 30mintutes. Compiling nonperforming loan data was a painstaking operation that required the formation of a project office of its own. Withdrawal used to pass through 5-8 people starting from helping customer fill forms, retrieving physical customer file, and ledger retrieval, and then authentication, transaction posting on the ledger, passing through internal auditor to check if all process has been done as per the rules and policy compliance and then authorize it for payment by tellers.
IT department was formed to handle automation projects to improve operational efficiency and thereby improving customer service hence contributing to the growth and profitability of the Bank. Out of total 150 branches, 5 branches in Addis Ababa were chosen for a pilot project of automation.
With the help of re-engineering and automation project, the bank was able to cut operation cost tremendously. The most significant part of change came in customer service improvement. From an average time of 30 minutes cash withdrawal time, some transactions were made possible to be done in less than 30 seconds enabling the bank to scale up operation and tap largely on unbaked society. The newly integrated computerized database system added service flexibility, accurate and timely report and operational scalability.
The strategic approach of using latest technologies for banking operation has enabled CBE to operate thousands of branches both within the country and abroad. Without computerized database system, it would not have been thinkable cutting cost and remain profitable let alone scale up operation.
Ethiopia’s new prime minister Masters Degree was based on cryptography, and last year Ethiopia signed a memorandum of understanding with one of the blockchain platform providers CARDANO to help the country adopt the technology and to help transform the economy of the country as a whole. This agreement made Ethiopia become one of the few countries that are ready to embrace the blockchain technology platform to transform sectors including banking industry use.
By being one of the early adopters of this new technology the Bank is now poised to become one of the largest commercial banks in East Africa in the coming few years.