Bank of Abyssinia signed an agreement with Deloitte Consulting for consultation on its Five-Year Strategic Plan and organizational transformation scheme.
The partnership seeks to help the bank overhaul its business model and adopt standards consistent with the changing global banking community by crafting a Five-Year Strategic Plan and organizational transformation project.
The global banking ecosystem has undergone unprecedented changes in recent years, compelling banks to reposition themselves within the changing environment and to revisit existing business models.
“The external environment in the country itself is changing, following trends in the global financial system – an aggressively changing business field with enhanced financial inclusion and increased integration of modern technology among other factors. With this outlook, the banking sector in Ethiopia has to adjust itself according to the changing global and local environments in order compete with other global operators,” said Mulugeta Asmare, President of the bank.
A survey conducted by Deloitte on the Ethiopian financial services industry showed that competition within the sector has increased significantly and is expected to intensify in the future.
The finding implies that banks need to revisit their business strategies in order to stay afloat in an increasingly competitive market.
The survey also suggested that following the entry of foreign banks, funding, lending, savings and investment patterns are expected to change. Hence, local banks need to prepare themselves ahead of time and design strategies that will help them compete with international financial firms.
“Setting aside local and prospective foreign competition, in order to support the country’s growth, it is obvious that the Ethiopian financial services industry needs significant long term capital. In addition, the sector also needs to develop its human capital and information technology, create effective systems, launch modern banking products, implement improved risk management and utilize cost-effective service delivery mechanisms,” said Solomon Gizaw, Managing Partner at Deloitte Ethiopia.
Since its establishment in 1996, Bank of Abyssinia has been expanding continuously. In March 2015, the bank’s assets stood at 12.43 billion birr, with a total capital of 1.69 billion birr.