Standard Chartered Bank Kenya is among top-tier lenders that have in recent years invested heavily in digitisation in line with changing preferences by clients. The country’s sixth largest lender has reported that about 90 percent of transactions are now done via its digital channels such as SC Mobile, an app.
The bank says increased digitisation has seen growth in new customers and reduction in footfall in branches resulting in closure of some outlets.
The next phase of its digitisation strategy is enabling customers to apply for and get approval for credit without visiting banking halls.
StanChart’s chief executive Kariuki Ngari spoke with Business Daily in an interview at the bank’s headquarters in Nairobi.
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Your digitalisation strategy has different phases.
When you start the journey of digitalising and ensuring a bank is not somewhere you go, but something you do at any time you choose, then you start to look at different touch points.
The SC Mobile takes care of one aspect, but we know this is a cash economy. So, there’s cash and there are cheques. For our corporate clients, we have installed cheque deposit machines, so whatever they get paid as cheques, they deposit and get direct value. When it comes to mobile lending, you are reaching a much wider number of people than before.
Is your looming venture into mobile lending a strategy to target mass market?
We look at technology to enable us reach segments or people that we could not have served before if we did it the traditional way.
But I wouldn’t read it to say StanChart now wants to completely go down where everybody is.
We know where our strength is, it’s an area we understand and our clients connect with us.
That’s an area we will continue doubling down to ensure we continue being relevant. Nobody leaves where they are strong and try to explore because you can find your - self not standing at all after that.
Why are you entering mobile lending now when your peers did so a decade or so back?
It’s been part of the development.
It’s not just about the now traditional digital lending, but ‘why can’t we do everything digitally like apply for credit card digitally and get a response or apply for a personal loan’? All along, it was just a question of timing.
Once we are ready with development, we roll it out.
We want to reach a stage where both our individual and corporate clients are comfortable engaging with us digitally.
Remember the old days when you had to rush to the bank because it closes at 3pm? Today, you even don’t know when the bank closes.
Think also about our payment system. Kenya is lucky because of M-Pesa.
What is the maximum mobile loan you will offering and at what cost?
It’s something we will carefully consider driven by responsible lending.
There’s a lot of history out there.
And the regulator is now coming to control that (digital mobile lending) sector, and that tells you there’s something that was not going well.
So, we will not add to indebtedness.
We are looking at it as a matter of convenience more than something StanChart sets sights on future with digitisation else for our target segment. So, I am not talking about tomorrow have three million of mass market lending.
As you look to go fully digital, how do you balance between adoption of technology and resultant redundancies?
One of the areas we have spent time working on is how do you prepare staff to be future-ready; what are future jobs that are coming in and how are those jobs going to look like? Unfortunately, it is never a perfect match.
Technology never matches perfectly.
When technology fits a particular industry, it’s very unlikely that everybody in that industry will transition to a new role. There will always be changes.
Can one talk about job security in banking industry?
I don’t think there’s any company today that can guarantee giving you job security.
The world has changed completely and technology disrupts. That’s why our investment focuses on how we prepare you for the future. Where is the future going to be and how prepared are you so that when that future comes, you are ready for it? That’s our ultimate goal as a company.
What are some of emerging jobs as banks increasingly adopt digital channels?
There are new jobs being created within the banking industry. For instance, think about data analytics and other platforms that are going into digital; they need to be managed. It’s a question of how do we help you transition.
If you think about 30, 20 years ago job security was guaranteed, but not anymore.
You need to look at the trends, what jobs look like in future, and ask ‘am I prepared for it?’ That’s the investment we continue to do as banks because we can’t guarantee jobs, it’s not just possible in this environment in any role.
Is that the reason StanChart has been cutting workforce annually at least over the last seven years?
In business, you have got to respond to clients. For instance, a year ago when the Ministry of Health announced “stay-at-home” measures, we have seen especially in Nairobi, some of our branches had more than 90 percent reduction in footfall. It is a question of how do you repurpose the people who work there.
What informs your plan to lease some of your outlets and what lease arrangement are you looking at?
You find that most of the ATMs, for instance in branches, we own them.
But in the company premises, we will get into a lease with some of these providers, but everything else such as the software and maintenance belong to us.
You started investing heavily in digitalisation even before the onset of the pandemic. Did this give you an edge when the pandemic hit?
One of our strategic pillars was what we called ‘transforming and disrupting with digital’. We were very clear as an organisation that we needed to bend down and double down in our investment in technology.
We could see the consumer changing trends and rule of technology in finance. Our investment started way before the pandemic and the focus was more on the client side, hence we launched the digital bank — SC Mobile.
How have you equipped your staff to ensure seamless workflow?
First, we needed to ensure we have secure communication tools to enable them work from home.
The second one was to have a stable virtual private network (VPN) and also expand the bandwidth.
With that, people were able to work, but we also needed laptops because you can’t take desktops home. So, we fast-tracked the availability of laptops to everybody and make sure there was VPN, and also the soft issues such as (data) bundles.
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