Fri, 27/03/2015 - 13:00
Current Issue 77
Bank on Better
The National Bank of Kenya is focusing on heightened security and convenience-driven innovation in 2015 as it stays true to both its short and long-term goals
Writer: Matthew Staff
Project Manager: Donovan Smith
The National Bank of Kenya’s ongoing strive for industry innovation and customer satisfaction continues to fuse short and long term goals as 2015 promises further physical and virtual expansion.
In 2014, the company was in the midst of a significant growth plan which incorporated not only the addition of 12 new physical branches and 20 new ATMs, but also a concerted move into online and mobile banking.
This overall distribution network expansion remains one of the institution’s core ambitions this year too, improving the level of virtual and physical access points for its customers, while also introducing new and futuristic solutions to keep ahead of the industry curve.
The company’s Chief Executive Officer (CEO), Munir Sheikh Ahmed explains: “We will look to grow the amount of products and services significantly this year, putting in place 15 additional branches to the 12 opened last year, but also in growing new business segments in the form of microfinance and our Chinese business segment.
“The other unique strategy this year is to bring down the costs of operations by automating and digitising lots of back office works that are currently semi automated or entirely manual.”
Arguably one of the biggest introductions currently being initiated by the National Bank of Kenya though is the influx of agency banking outlets across the country, fusing both its growth strategy and its dedication to localisation and moving closer to its customers.
At present, 1,500 agents have been introduced in line with Central Bank’s drive to improve convenience to the people of Kenya.
“You have to access the whole population in rural areas, but part of that challenge has been sorted out on the distribution side by the introduction of agency baking,” Ahmed explains. “What this means is that every village and small shopping sector in the country has got some level of access to bank services via a local agent which could be located in nothing more than the local grocery, hardware or drug store.”
In line with this commitment to customers exists an extensive marketing and education effort to ensure that the width and breadth of Kenya are not only aware of the products and services being offered, but of the full range of benefits these services entail.
Ahmed continues: “Education is important because for the best part of the past 50 years, the general population has been running on cash, so to suddenly switch to cashless processes requires a certain degree of education.
“When ATMs were first introduced in the 1990s the general public had to learn they no longer had to come into a branch to withdraw money, and the same level of education is needed now to show people that they don’t necessarily need to have cash in their wallet at all.”
This strategy is especially significant in regards to the introduction of the National Bank’s cashless transaction system on public transport.
Cashless fares for public transport users is a new and progressive system, but nonetheless an important one in keeping ahead of future trends, and Ahmed fully expects to see the adoption of this rise as people learn of its benefits.
“The government is pushing for the transport sector to adopt these cashless or cash light solutions but practical solutions take time so we are working hard to educate people about the improved convenience we can provide,” Ahmed states.
Innovations are always at the forefront of The National Bank of Kenya’s ongoing development, and this currently comprises niche offerings of microfinance and Chinese business segments to fill in the few remaining gaps in its service offering.
However, alongside this exists its drive for internal efficiencies and especially in regards to levels of security across IT and logistics.
“The more remote you go into rural areas, considering we are still largely a cash-based economy, the more logistical issues you come across in securely moving around large amounts of cash and liquidity,” Ahmed says. “One of the things that softens that challenge is the robust expansion of fibre links into the rural areas which means at least seven counties of the country have secure links.
“However, as you branch out into really remote areas, there are hundreds of unpaved roads even so we have to use light aircraft as well as local settlement arrangements between local banks to face that particular challenge.”
The CEO adds: “In terms of investing in security we also have to make ongoing investments into our IT systems to stay ahead of people with bad intentions. We have invested substantial amounts into this last year, improving our systems, especially having gone into mobile and online banking in a big way.
“This kind of banking brings elements of security risk with it, so we have to keep investing to counter that vulnerability in those areas.”
The National Bank of Kenya has subsequently introduced a specific department for IT security to ensure that comprehensive levels of protection are in place in regards to hardware, software, IT resources, firewalls and the prevention of hacking.
‘Bank on Better’
Maintaining these high standards is imperative for a financial institution with national identity engrained in its history and customer appeal.
“This is definitely one of our differentiators, bringing an indigenous outlook to banking with the whole DNA from inception around bringing capital banking services to the population of Kenya,” Ahmed confirms. “Our second differentiator is our vast experience in the public sector.
“Although this is now open to all banks and therefore fully competitive, we have more expertise and are still the frontrunners and best service providers in this sector.”
The Bank’s final differentiator is its aforementioned commitment to innovation and the products that continue to develop from that; all the while staying true to its motto of ‘Bank on Better’.
Ahmed concludes: “We manifest the brand through those innovative products, relationship management, convenience of accessibility and also the quality and pricing of our services in comparison to some of our competitors.
“In terms of progress over the next 12 months, I expect our trading profit to be no less than 50 percent up on last year; an ambition being driven by a whole host of actions including doubling the customer base by the end of 2015.”