In Conversation: Dr Mbako Mbo (Chief Financial Officer, First National Bank Botswana)

First National Bank Botswana's Chief Financial Officer (CFO) and executive director Dr Mbako Mbo had a wide-ranging conversation with BW TechZone following the Innovation Day Botswana event hosted by Botswana Digital & Innovation Hub (BD&IH). The seasoned banking executive touched on different topics on the intersection of finance and technology including what 4IR transformation in banking looks like, the state of Botswana's digital transformation ambitions, how local businesses can leverage the digital economy for growth, and much more.

Tell us briefly who you are and what you do

My name is Mbako. I’m a chartered accountant by training, but I’ve spent some time doing other things outside of accounting. I’ve predominantly worked in the financial services industry although I’ve had a stint in telecommunications and power. I spent a considerable number of years in development finance before switching to commercial banking. Currently, I’m the Chief Financial Officer of FNB, and I also sit on the board of directors as an executive director. 

Botswana is slowly shifting towards the fourth industrial revolution (4IR); Can you share with us some insight as to what that transformation looks like in your sector?

At its core, 4IR focuses on the physical world and infuses that with our biological being to answer questions about life. It comprises facets such as artificial intelligence, machine learning, the Internet of Things, blockchain, distributed ledgers, robotics, and most importantly, people. So it’s not just about computers; there’s a big facet of people in 4IR, and that’s something that people sometimes forget. We think of it as a collection of networks, cables, computers and very intelligent applications, and it is beyond that.

The industrial revolution is a phenomenon that is here to change the way we do things, and how we live life. I normally use an example like this; take a person who wants to move from A to B. Currently, we would think that the person needs a car or a bus. With 4IR, we would say that the person is going there because they need to achieve an objective. It focuses on achieving that objective, whether you get onto a bus or don’t travel at all, it focuses on the outcome. People plough maize, sorghum and the like so that they can eat. 4IR focuses on keeping people nutritioned because that’s the outcome. That’s how we can begin to look at 4IRlike if we really want to understand and embrace it. It’s solution-based and outcome-based, not activity-based.

Over the years, there has been an increase in international scams using digital banking and money management services. Can you speak to the measures that should be taken towards promoting digital and media literacy amongst the general public in the wake of digital transformation?

The first thing is education. We all have to take part in educating and sensitising communities. As banks, obviously, we are running a lot of campaigns you may have seen. These campaigns focus on what consumers, customers and stakeholders should and shouldn’t expect from us. This is basically to equip them to be able to discern what a scammer's message looks like and what a true bank message looks like. We educate customers in terms of the Do’s and Don’ts, and what we advise them to do and not to do. To take it a step forward, we are moving our clients into more secure channels, if you look at what FNB has been doing as an example. We are moving people from branches and from less secure self-service channels to more secure self-service channels.

We speak quite a lot about the FNB app, for example. So when you really look at the security features of that app, it’s basically designed to give you more power in terms of taking control over the security of your banking transactions. You give scammers less of a chance to steal from you when you transact through the app, armed with the education and awareness that we give you as the bank. In the background, what we are basically doing is that we invest a lot in certain products and programmes that are driven, in the main, by artificial intelligence and machine learning. These programmes would typically pick trends and unusual transactions and raise alerts. When they raise alerts they do two things; they enable us to stop those transactions, and they also give us a chance to investigate those transactions and then report them.

There’s a big collaboration between us and law enforcement agencies, and specialised government agencies like FIA, for example. We collaborate quite a lot and some of these collaborations are actually stemming from what we see in the programs that we have designed. It’s a very serious thing. The other day I was just reading an article that says it is estimated that by 2025, companies will lose $10.5 trillion out of cybercrime. It is not something that we take lightly.

Do you think Botswana has the infrastructure required to realise its ambitions of digital transformation?

I think digital transformation is a journey that me and you can only guess where and when it will end. I’m saying this because I can’t imagine it ending. As I said, it’s a journey. Where do we stand in the journey? I think there has been good progress in terms of laying the foundation for digital transformation. We are observing great strides, by the government in particular, to build onto that foundation. It has been reported that as of 2023, the government is busy rolling out ICT infrastructure projects to 500 of Botswana’s villages that will give affordable internet connectivity to the majority of the 597,000 people living in rural areas. 49% of Botswana’s population is estimated to be under the age 24, with 31% yet to turn 15 years of age, projecting a very futile ground for transformation. 

But we need to understand that this is not just the government’s journey. It’s a journey for everyone. Once the infrastructure is provided we need to responsibly consume what has been laid out as a foundation. This is where everyone comes in.  The private sector in particular has to drive such innovation, and this includes supporting the youth with what I like to call their “positively crazy ideas”. It is our responsibility to embrace those ideas and provide the infrastructure and the resources for them to responsibly consume that infrastructure.

During your talk, you mentioned 4IR as a means to build solutions to societal needs. There is, however, a general fear that certain innovations may render human skills and services obsolete. obsolete. For example, an artist may fear that their artistic skills are no longer relevant in society because one can get an AI-generated image online. What do you say to those who hold such fears, specifically concerning our current unemployment crisis? 

Unfortunately, that’s the nature of change, and change is guaranteed. The danger of ignoring change is well known, and in my talk, I gave examples of the likes of Nokia and Xerox  - they ignored change and change consumed them quite quickly. 4IR, just like the revolutions that came before does two things; it changes jobs, or it replaces them. It’s a question of us looking forward and determining what the skill sets of the future are looking like.

I’ll give you an example outside the 4IR environment. During the time when I finished high school, accounting was the in-thing. We were dreaming of being chartered accountants because that’s where the economy was. Do I really think that the level of enthusiasm for a Form 5 student now would be the same if you placed accounting on their desk? I don’t think so. It is important to embrace the fact that change is coming, it’s to accept that the jobs we have now will be replaced, but that other jobs will then crop up.

You gave the example of an artist in your question who worries that their skills may be rendered obsolete because people are buying digital content. Yes, it may be so. While I still respect that canvas-based paintings are still very relevant and appreciated, one should also realise and accept that there is another growing market of digital images. Where do those digital images come from? A combination of computers that have been trained by people, and programmes that have been influenced by people in terms of how they take information, emotions and messages, and package them into a visual message. There is a person involved in all that. At the end of the day, the skill itself of visualising emotions, as I understand artists to do, is inherent in a person. How do we then transport the way we express it from a canvas to a computer program?

Do you think there is a possibility that that could negatively affect the quality of work that gets put out, especially concerning creative works? Take the music industry for example. Back in the day, we used to listen to music on the radio, or purchase a CD and listen to it on a device at home. But over the years, digital streaming has become the main mode with which we consume music. There’s now an understanding that many artists are not interested in putting much effort into the art that they create because they focus on making viral content that will up their monthly streams. Is it a possibility that such innovations could compromise the beauty that comes with the human touch in the art that we create?

I think you’re raising some very interesting questions, and your answers lie in the examples you gave. I’m one person who believes that certain things will fall into place because change will direct them that way. When things come together at speed, that’s where innovation happens.

In terms of people moving from one place to another and fearing that they may become obsolete, it points to a problem of lack of protection. As we progress with our conversation, one thing that I would really like to talk about is regulation. Regulation is not a bad thing. It doesn’t have to be rigid, but it does have to protect the industry itself.

People will have to accept that change is happening. People have to accept that no one will buy a CD because they don’t have anywhere to play it. People have to think about where the world is going, and not what has previously worked for other people. I always give the example of how it used to be easy for banks to sit back because customers needed this and that. That’s no longer the case. We have to see where customers are going and go with the customers. Artists have to behave the same way. 

Some people believe that our population is too small to support certain business ventures. Do you think this is a considerable factor hindering our ability to move towards a digital economy?

I don’t think so, and I think we would have a fixed mindset if we were to look at this topic in that way, and that can be dangerous. By definition, a digital business, of course, subject to jurisdictional regulations and laws, is boundless. When we look at companies like Netflix, iTunes, and Spotify, how many people know where those companies originate from? We don’t care. This is the reality of digital business. There are 7 billion people around the world and we have businesses that are sitting all over the world and capturing nearly 2 billion of those people. We’ve got businesses that are domiciled in certain places but they are not doing business in those places. Digital business doesn’t have boundaries.

Do you think government services are generally quick enough in their responses to the emerging needs of a growing digital landscape?

In my considered view, there has been tons of proactiveness in preparing the regulatory landscape, policy-making and enacting enabling laws. Implementation is what has not been fast enough. For example, I spoke of the rollout of internet infrastructure in villages. While this is an excellent move, you will find that there’s a lot of distance between the original plans and the actual implementation.

In terms of policies, preparing the regulatory environment, the business environment and the ease of doing business, I think the preparatory work is super. I think the issue is a matter of how to implement them. I would, however, conclude this point by saying it also comes down to how we as individuals, the private sector etc., decide to responsibly and innovatively consume the infrastructure that the government provides.

What key indicators should we, as the public, look out for to measure the success of government services and private companies in implementing their strategies towards a digital economy? What signs might we see that positive change is on the horizon?

It would depend on what angle you would want to look at it from, but broadly speaking, it would be around the regulatory landscape and how enabling it is, the ease of obtaining licences to do digital business and carry out innovative work, the availability of broadband connectivity across the country, data speeds, the growth of the digital economy itself and eventually its contribution to the growth of the GDP. Of course, this list is not exhaustive.

Please share with our readers any advice or nuggets of wisdom.

The world as we know it is changing quite fast, and the Fourth Industrial Revolution, or Industrial Revolution 4.0 is pretty much at the centre of it. This industrial revolution is a phenomenon beyond just computers and technology; it's about how we want life to be.

The 4IR journey is an outcome-led one, as I said, and the approach chosen by policymakers will be critical. I think it is time for policymakers and regulators to focus on the outcomes and the impact of institutions and individuals, as opposed to individual products and services. If, for instance, as a bank, we want to make product X, regulators at the moment would want to understand it. This is okay, but I think, increasingly, there should be room for products to be rolled out at speed as long as their impact on society is within the confines of what regulators have deemed to be acceptable. 

Interview has been slightly edited for length and clarity.

Image source: Botswana Gazette

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