The Kenya Bankers Association #CEOChat forum kicked off early Friday morning under the theme Banking Industry Growth and Consolidation Trends Amid Heightened Uncertainty. My Chat with a Bank CEO is a forum by Kenya Bankers Association where Bank CEOs engage social media users on topical issues in the banking industry with today’s forum hosting NCBA Group CEO John Gachora.
Mr Gachora commences by noting that the worst bits about the pandemic is already behind and the banking industry is prepared to move into the future.
He says that there were a number of mergers and consolidations in the market prior to the pandemic. For instance, one year ago NIC Bank and CBA bank merged to form NCBA, which celebrated the one-year anniversary.
Gachora believes mergers will continue to define the future of the banking industry by creating larger, more resilient banks that are able to collaborate with government and the private sector large manufacturing and infrastructure projects.
In addition, Larger banks are able to invest in safer, better systems, and invest in innovation especially in research and development. He says that the Kenyan banking sector will witness more mergers that will create fewer but larger institutions.
In the new normal, banks are prioritizing supporting customers and help them survive even after COVID. He says that although banks are acknowledging larger non-performing loans on their books, they continue to work closely with customers to manage these risks. In this case, Gachora believes that banks are maintaining resilient balance sheets for a sustainable future.
Gachora says that in the advent of the pandemic some businesses will have to start afresh with about 10 to 20 percent closing permanently. Recovery will be slow and perhaps good signs may appear later next year with a boom season coming in 2 years.
Transition to digital
The pandemic saw banks and telcos reduce or eliminate charges for digital transactions. Mr Gachora believes that with growing competition the overall costs of digital transactions will come down even post pandemic.
Gachora believes that digital innovation will continue to be at the core of banking. In Kenya where close to 90 percent of new phones are smart phones, digital banking will be the new frontier.
He lauds NCBA digital innovations such as M-Shwari and Fuliza that is a partnership with Safaricom and Loop App as creating value proposition on payments.
Gachora says that banks invest heavily in systems to manage cybercrime with the growth of mobile banking. The Central bank has also come up with certain guidelines that all banks must adhere to protect depositors’ money. Furthermore, the regulator requires an annual IT audit that takes into consideration ways banks have responded to trends in cybercrime.
The KBA Kaa Chonjo campaign aims to educate customers on what they can do to protect themselves.
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