The Limitations of Banking Instruments and Product Innovation: Towards Attractive Banking Solutions and Strategies

Dr Mohamed Awad Mohamed Metwally
Academic Analyst and Associate Economic Expert at the Experts Centre for Development Studies and Crisis Analysis
If, in the first article, we identified the source of the problem by diagnosing the phenomenon of hoarding, the expanding geography of the parallel economy, and the erosion of trust, stopping at diagnosis alone is not enough to build an effective economic strategy. Attention therefore turns directly to the banking system and financial institutions in search of a decisive answer: why have Sudanese national banks so far failed to attract the enormous volume of money being hoarded outside the formal system? And why, in the public and commercial mindset, have most Sudanese banks shifted from being “engines of development and arteries of investment” to becoming little more than conventional vaults, fee-collecting institutions, and centres for administering complex debt obligations?
The obvious answer lies in the rigidity of traditional banking instruments and their tangible disconnect from customers’ economic realities and behavioural patterns. Most banks have continued to rely on conventional operating approaches and outdated savings products that are wholly incapable of attracting those who hold capital—whether small savers seeking to preserve the value of a lifetime’s earnings, or investors and businesspeople holding substantial liquidity and looking for flexibility and worthwhile returns.
In an environment of high inflation and declining purchasing power, routine investment or savings accounts that offer only nominal returns or are constrained by strict administrative conditions effectively amount to a freezing of wealth and an inevitable loss for depositors. This naturally drives them away from formal banking and towards tangible stores of value such as gold, foreign currency and property, or simply towards keeping their money within reach in private safes.
Moving from banking incapacity to a phase of active mobilisation of savings requires a structural revolution in financial engineering and product innovation. Banks will not be able to attract hoarded savings unless they offer society investment and pooled-finance alternatives that are superior to individual hoarding in terms of security, profitability and ease of access. This is where the concept of targeted and flexible banking products becomes particularly important.
What is required today is not merely the opening of conventional current or savings accounts, but the launch of specialised public and development investment funds closely linked to high-productivity sectors of the real economy. These could include artisanal and commercial mining and gold, essential-goods manufacturing, agricultural and livestock development, and infrastructure and smart-utility projects.
Issuing investment and development bonds and targeted savings funds offering regular and attractive investment returns, designed to suit both small and large holders of idle cash, could give citizens a strategic incentive to move their capital from household safes into the banking system.
When depositors feel that their money is being put to work in a tangible agricultural or mining project that generates real and regular returns above the rate of inflation and protects them from the erosion of purchasing power, they will naturally become less inclined to expose their savings to the risks of theft, looting or loss by keeping them at home.
Alongside product innovation, financial flexibility and freedom of access represent non-negotiable structural requirements for rebuilding trust. A saver or trader who the bank prevents from withdrawing or accessing their own money when needed because of liquidity restrictions or sudden withdrawal ceilings will regard the bank as a trap for liquidity, rather than a safe haven for it.
The Central Bank and commercial banks must therefore reformulate monetary-policy controls in ways that guarantee the highest possible levels of flexibility and security. They must also further develop Islamic financing instruments, including Murabaha and Musharaka, so that these cease to operate as cumbersome and routine frameworks that burden applicants with debt and bureaucracy, and instead become genuine investment partnerships characterised by speed, transparency, and fairness in the distribution of risks and returns.
Sudanese banks are now required to abandon the role of a complaining spectator lamenting market indebtedness and instead become dynamic creators of solutions. This means offering meaningful incentives, preferential benefits for traders and depositors, and a banking environment that respects customers’ time and safeguards their financial dignity.
Yet banking innovation and the revival of investment instruments will remain inadequate and limited in impact unless they are supported by advanced technological infrastructure and comprehensive automation of the state’s financial system. Such a transformation would reconnect everyday transactions and sovereign revenues to a secure electronic financial network, while closing avenues for corruption and direct cash dealings.
This takes us directly to the heart of the strategic solution: the role of the state and its digital transformation institutions in automating the economy. This will form the central subject of the third and final article in this series, where the issue will be examined in comprehensive detail.

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