Digital Divides, Development Deals: CEO of the Development Bank Ghana on Banking Africa Beyond the Status Quo | The CXO Conversations

Guest: Kwamina Duker, Chief Executive Officer, Development Bank Ghana

Host: Kwame Oppong, Director of FinTech and Innovation, Bank of Ghana

Full Transcript

[00:00:00] Kwame Oppong: Hello everyone! Welcome to the CXO conversation. Today, I have with me, the CEO of the Development Bank Ghana (DBG), Mr. K. Duker. Welcome, K.

[00:00:14] Kwamina Duker: Thank you, Kwame.

[00:00:15] Kwame Oppong: First of all, I'm happy to have you here. It's a great opportunity to pick your brains and your minds about some of the thoughts around the future of this industry.

Before we start, my first question is just to get your quick reaction to what's happening in the US. The results of the election. Any quick reaction to that?

[00:00:37] Kwamina Duker: That's a really unexpected question and as a development bank, we are supposed to be apolitical, but I think the US election was actually quite interesting in a way that I don't think many people expected or look at, is probably more accurate. Look. At the end of the day, 72 million people making a decision. Cannot be ignored right? In, in many ways, I don't think you can just put it to misogyny, sexism or racism in any sense. It's a deep heartfelt decision that people make.

And the question that we always ask is, "Am I better off in the last four years?" And I think the decision they made was that they're gonna take a chance on the alternative. That's what we see a lot these days. It's not so much. People voting for one or the other. But people voting for an alternative.

And I think that's a powerful message that we can see. The other interesting part, which I find far more interesting than whether Trump or Harris won, is the social experiment that we saw with Elon Musk. This man took over Twitter now X. Paid 44 billion and turned it around from what was really a liberal leaning social media into what is effectively now, a right wing forum.

He spent a hundred and million plus and made a huge bet that he could actually influence the election. That to me is fascinating. That he managed to do it. It's something that I think people are going to look at. I think the most the most profound thing that came out of it was when he said on X. You are now the media.

It's fascinating and I think people are really gonna watch that process in other elections coming up.

[00:02:33] Kwame Oppong: That's a very interesting dimension to the election. I didn't even think about that. And that whole string of dots that began from Elon Musk taking over Twitter and turning it into X but it also speaks to the role of innovations like AI which is now reshaping the future.

I can't help but think what the future could look like and how really AI can shape the future beyond what we are already seeing. So I don't know what your thoughts are on that?

[00:03:00] Kwamina Duker: It's impossible to move forward or run any business institution in the coming years without the help of AI. The amount of data and it has to be a prerequisite. But the amount of data that we have now that can influence any particular decision is so vast and often very complex that we are going to need tools to allow us to be able to make decisions. And I'll give you an example that we're looking at. Any CEO of any bank today in Ghana or elsewhere, you ask a question. Is there fraud in my institution?

There's no way you, as a CEO, can answer that question. There's absolutely no way. Even individual departments, compliance, finance, et cetera. Could answer that question. Cause there's so many aspects. So many different areas. The only way they can do that is through digital automation. Which effectively is AI. Somebody who can be constantly tracking every single corner of the organisation. Checking to see inconsistencies. Checking to see what's happening. That in itself is a very practical example, and the point I'm making is that you cannot run an institution of the future without having an AI support.

[00:04:25] Kwame Oppong: Yeah.

[00:04:25] Kwamina Duker: In that respect, just like today, you can't fly a plane without having complicated computers supporting everything that you do.

[00:04:35] Kwame Oppong: Yeah.

[00:04:35] Kwamina Duker: It couldn't be exactly the same thing.

[00:04:37] Kwame Oppong: As you were speaking, I was thinking. Especially with the example you gave. It reminds me of the powerful role that many of the new legal firms, investigation firms, and frankly AML KYC firms, the role that AI, is actually playing and helping them enhance the efficacy of the solutions you're providing to clients.

It's unleashing all kinds of possibilities at this point. And it'll be fascinating to see how much further? And you made a point about airplanes, right? The sophistication of computers that are now running it.

Most regulators hate to know the truth. Once you are a passengers on a flight now, you probably were checked in or at some point along the chain, your information was processed on the blockchain. And for those who are yet to warm up to those ideas, that's another example of how inevitable some of these things are.

Now, let me bring you back to something important and interesting. Listening to all this. Clearly it makes the average person a lot more productive than they could have been years ago. So we can perhaps answer questions. Much better than we could have in the past. All these questions that you've highlighted, that without the automation, standardisation, and perhaps the addition of intelligence or injection of intelligence into that whole environment, you can't do that.

But with that whole concept of being able to make people more productive. Frankly, from wherever they are. Is that also going to change the nature of work and the lifestyle around the work regime that we have, right? People are gonna be able to live a fully hybrid life.

[00:06:15] Kwamina Duker: It's a tough one because in many ways it's happening and we're only beginning to see the benefits and the problems that it causes, right?

So we already see nomad workers, in many respects. I remember listening to mayor Bloomberg a few years ago talking about the huge changes that happen in terms of society from the farming revolution to the industrial Revolution, to what he now calls the data and digitised revolution, where the skills that people have are now portable.

They no longer reside within the institution. Even simple things such as design, accounting, et cetera. People can do this from anywhere. Those who already have those skills to a large extent do not need to be in the office. So that has really built hybrid working and COVID has actually accelerated something that was happening already.

The problems you get from that, the newbies, the guys who just come out of university, the interns and those who are starting, who don't build those relationships because they don't have that proximity that day to day. That's invaluable in terms of mentors and that kind of experience. And that's gonna be a problem because you're gonna have pockets of digital skills or pockets of portable skills that are not easily transmitted to the next generation or the next cohort.

That's going to create another set of problems where people don't build that affinity or that personal relationship, which I think is so necessary in terms of building high performance teams. It's a tough one.

[00:08:01] Kwame Oppong: This is a very interesting point because we've also been confronted with the idea of what the future of the labor force looks like to a large extent. You have to take a peek into the Gen Z generation and their mindset to understand what the dynamics look like. I think everyone is grappling with it. But there's an even more interesting dimension to all of this. When you juxtapose a new labor force, a very different type of work and employee presence in the office space reshapes the global landscape.

And frankly the unavoidable geopolitics as we talked about earlier. If you take away things like the US election. You also see some regionalization happening. There are several dynamics going on. That begs the question. How will global, politics and geopolitics impact businesses, particularly in the next three years? I think three to four years. Before 2030, how will geopolitics really shape the future of businesses?

[00:09:04] Kwamina Duker: Probably asking a question about Trump again. There's no doubt that geopolitics definitely plays a role and there's cycles, there's trends and there's always the inevitable. The inevitable, I wouldn't call it pandemic. But inevitable transitory explosion of events that happens.

The problem for countries which we call the global south who really do not have that level of either financial independence or cultural independence. Get really affected by what the global North does.

And that's always going be a problem but it's gonna be even more acute when the volatility spikes. So when you have an environment that is moving towards potentially, a much higher volatility because there are deep movements happening at the moment and you're gonna get some seismic shifts. There's gonna be some kind of tension or friction between what's happening in Ukraine.

That's going to change what's happening in the Russia - China axis. And all these are gonna affect Africa. The previous relationships and the previous contracts will come under tension.

The next couple of years, as you look at what Trump does in particular, in terms of that kind of relationship, looking through a lens of Trump first and America second, that's gonna affect Africa. There's no doubt about that.

Put on your seatbelt and and there is going to be some volatility and turbulence. We are just having a discussion with someone about COP 29. In view of the outcome of the US elections and the views that have been professed over the years in leadership. We expect that will also influence policy going forward.

A big issue for us, particularly in the global South is sustainability. How do businesses, particularly within the context of potential dwindling support or policy level support for sustainability. How do businesses really help drive and sustain the momentum and sustainability?

[00:11:21] Kwame Oppong: That's a really good question. I think we're going get the answer over the next 6 to 12 months about how much, or to what degree, the private sector can play a role. But I'm still of the belief that at the end of the day, the role of government in any society is becoming less important in many respects, partly due to some of the things that we discussed already.

About how people work and how people depend on things. But more importantly, there has to be more of a responsibility of the private sector, in terms of long-term financial sustainability. That responsibility is going to be moving from governments more to the private sector. For good or bad, we gave the example of what Elon Musk has done for Twitter. You take it back to businesses in Ghana, in Africa, et cetera.

They have to begin to start taking more responsibility for sustainability and something that traditionally has been left as responsibility of government is not gonna be viable anymore. In our country, we talked about Galemsey.

Does anybody think that the illegal miners wake up every morning. The sole intention of eradicating the landscape? No. They're just going out there trying to make a living for their loved ones. Putting themselves in perils of their lives, just to try and make a living. And these are the kind of things where we need to build a new relationship between the larger and more mature corporates.

In this case, the larger and more mature miners with the individual miners, the small scale miners, et cetera. It's something that we've already begun to do in farming where the more mature farmers support the small holders. But the point that we're making is that responsibility, should no longer be with government to support small holders, small miners, individual SMEs, but the larger corporates who already made a living, who already have the stability, they need to take more of that responsibility in the new world and take some of that burden of government because at the end of the day, a rising tide lifts all ships.

And we have to be cognizant that the private sector has to play more of a role in terms of sustainability. If not the burden on government is too much. This is really sobering. But also, perhaps, presents an opportunity for private sector institutions to begin to define their role and perhaps grow into it.

One underpinning requirements from a stakeholder perspective is also trust. I think whether consumers and the public feel sufficiently safe to trust private institutions. So you give an example of Elon Musk, for instance. When it came to Twitter, the idea of people being concerned based on their experience with Meta and when one of his subsidiaries' experience using Facebook.

Some of those experiences have shaped people's mistrust for private sector and sector players in this space. I don't know what your thoughts are in terms of how can really private sector ensure trust and generate trust among stakeholders. Whether it's keeping people's information safe and private or when they are investing and supporting in sustainability, not being involved in what we now call greenwashing, for instance, right? How can they really engender trust?

[00:15:11] Kwamina Duker: Hit the nail on the head and you really rammed it home because it's all about trust. How do you build that trust?

I have a belief that trust is equivalent to transparency. It's equivalent to having the same information, speaking the same language and having a common nomenclature. And until we build that trust, everything and all your concerns will come home to roost. We need to build that trust.

One of the things that we need to do is to make sure that we use technology because infinitely there's a lot more trust in the process of digitisation, of automation and data than in human beings. Today, I give an example from our banking sector where the banks complain about SMEs — the lack of trust, willingness to pay, ability to pay lack of documentation, et cetera.

And then the local businesses have a reverse argument. There's too much documentation. They ask a hundred questions, which are not relevant, et cetera, et cetera. But then you realize that the banks will only make money if they have clients who are making money.

If you have two parties who have the same goal - to make money. Why then do we have this disjoint? It's because we're not talking the same language and we're not looking at the same data. So one of the things that we have to do is have a common source of truth, to have a common database so that we understand where the BS is coming from.

Where it's clear, that the information given by the local business, to your point, can be trusted. And the requirements being asked by the bank are also clear and they don't change from client to client. The only way we can do that is by focusing and continuing the work we're doing on digitalisation and automation. So we have a common nomenclature, common underwriting terms, and then the ability for the local business to say, I can compare apples to apples and I can move if I'm not getting what I want.

And similarly for the banks to be able to say, these are terms and this is how they compare and they don't change. Because you come from the north, you come from the south, you're a woman, or you are a man or whatever. And that is gonna be key for building trust. It's the only way forward. I think.

[00:17:51] Kwame Oppong: So automation, transparency and visualisation. I think more broadly, one of the key ways to ensure trust. Very fascinating conversations with K. Duker as my guest today. Thank you very much and we hope to speak with you soon.

[00:18:07] Kwamina Duker: Thank you. Thank you, Kwame. Thanks for the opportunity.