KCB set for Sh2.2bn system upgrade

Corporate News

A KCB banking hall. The system, called T24, is expected to integrate eight other separate systems that the bank uses currently. FILE 

By GEOFFREY IRUNGU

In Summary

• Bank’s cost to income ratio stood at 49 per cent, down from 51 per cent last December.
• The lender says new system will reduce operational costs but improve services.

KCB Group is set to upgrade its ICT system this year at a cost of Sh2.2 billion ($25 million), CEO Joshua Oigara has said.

The system, called T24, is expected to integrate eight other separate systems that the bank uses currently.

 

Some of the systems are used in agency banking while others run its mobile banking service, but these will now be integrated under the new banking platform.

“We are acquiring the system which should come with software and hardware that will help cut operational costs and improve the way we deliver our services to customers,” said Mr Oigara at a media briefing on Friday.

KCB’s cost-to-income ratio (CIR) at the end of March stood at 49 per cent, down from 51 per cent last December and 64 per cent two years ago.

Mr Oigara said the plan was to bring the costs down to 52 per cent by next year, but this had already been attained by last December.

“Cost containment is one area we can say we have managed to deal with ahead of schedule. It was a herculean task because two years ago it stood at 64 per cent,” said Mr Oigara.

READ: KCB seeks to grow customer numbers by two million

The KCB chief executive said he sees possibility of increased convergence between the telecoms and banking sectors. KCB, which already offers mobile banking products under the M-Benki platform, has plans to put more services on the mobile phone.

“What we are seeing is convergence between the mobile and banking businesses. We are looking at technology as a way of delivering and increasing the number of our products and services,” said Mr Oigara.

The intended launch next month of Equity Bank’s mobile virtual network operator (MVNO) has raised the bar in the sector in as far as mobile banking goes.

Equity Bank had launched a similar mobile phone-based technology (M-Kesho) a few years ago, which, however, did not gain traction with users.