The banking landscape in Kenya has greatly changed in the past decade with banks embracing virtual banking as the future of the industry.
Kenya has 43 million active internet users with 90% being available on mobile phones and 72% having daily internet access. The use of mobile telephony and mobile banking has created a digital footprint that was not previously available which has allowed the banking industry to thrive.
Speaking at the Media Policy Breakfast, Andrew Mwithiga, the head of Timiza banking at Barclays bank Kenya said, “It took Barclays Bank 100 years to get to 1 million customers in Kenya whereas in 57days the Timiza App had hit the 1 million customers target.
According to data from the Central Bank of Kenya, the volumes transacted between April 2017 and March 2018 increased by Sh219 billion from Sh3.48 trillion in a similar period a year earlier.
Dr. Percy Opio, author, “The Future of Banking”, said that if banks don’t disrupt themselves, someone else will disrupt them, in this case, technology is the disruption.
Virtual banking has not been without challenges; cybersecurity being the most immediate and critical concern not only banks but also their customers and the whole financial system. With the continuous development of new technologies, cybercriminals are becoming more coordinated and sophisticated and are now leveraging on data breaches to take over legitimate accounts.
To continue thriving in the industry, banks need to effectively support digital delivery of services and more so through multi-channel delivery. Technological advancement will render some jobs redundant and demanding for retraining of employees in other jobs, this will also force a change in the organizational structures of banks.
Banks must address issues such as data protection and cybersecurity and be able to strike the right balance between safeguarding customers’ privacy; at the same time use data to get insights and analyses that will allow them to better serve their customers.
Read more on the Policy Programs at Strathmore Business School.