In an era where you can hail an uber ride or get a loan from a fintech app from the comfort of your sofa, it is easy to focus on the shiny and glossy and forget about what the incumbent banks are doing. If you keenly follow the development in the Kenyan banking sector you’ll be impressed by the nimbleness with which some lenders are driving new initiatives that are demand driven in response to the changing market dynamics.
Banks play a critical role in economies called financial intermediation. They get funds from those who have excess (savers or bondholders) and lend to those who need the funds (borrowers) and that is how they create investment in economies. That a bank like Barclays has done it for 100 years means that they know something that banks that have tumbled along the journey didn’t know. The rulebook for playing basketball is catch, pass, shoot and Barclays Kenya has shown how to do banking across generations in Kenya. Even in the phase of changing industry and macroeconomics dynamics, the bank has been able to ride the wave.
Barclays launched Timiza app in partnership with local software company called Craft Sillicon and Safaricom in March 2018. The app allows users to pay bills, buy airtime, save money and buy insurance. According to Think With Google blog, Barclays exceeded their annual target for the installation of Timiza apps by users in just 5 months. The bank was able to cut cost per install by 73% and grow conversion rate by 31%.
“We were able to surpass our annual target within five months of the campaign launch, and have now increased the annual target as well as rolling out a drive to grow repeat usage from existing users.” – Andrew Mwithiga, Head of Timiza. It took the bank just one year to hit 3m customers on Timiza, making it one of the fastest growing virtual banking apps in Kenya in 2018, having lent over ksh 10 Billion during the period. This really shows that the incumbents can also be nimble in their response and adaptation to change. With the right mindset, banks can also become stronger and efficient.
Companies like banks have the institutional knowledge, data and customer base to innovate even faster. They use what is known as dual transformation to enrich their product offerings by reducing concentration risk on traditional revenue lines.
In an interview on KTN News Trading Bell show, Barclays Kenya CEO Jeremy Awori said that they were pleasantly surprised by Timiza and the bank is already planning for Timiza 2.0 and Timiza 3.0 to bring more offerings to the customers. This will require a deeper understanding of customer preferences and needs using data analytics. By using the principles of data analytics such as the golden record that acts as a single source of truth, the bank will be able to continue to innovate. The ability to create new offerings on an already existing platform allows banks to cross-sell to their existing customers, growing non-funded income.
