Driving growth through strategic partnerships

A Pedestrian walking past Safaricom Shop along Kenyatta Avenue in Nairobi on May 7, 2023. Safaricom expands value through its Daraja API and M-Pesa Super App ecosystem. PHOTO | EVANS HABIL | NMG    

By MBUGUA NJIHIA More by this Author

A shift is taking place in financial services. Lines have blurred, and traditional rivalries set aside as banks, saccos, and fintechs recognise the power of collaboration.

Unlikely allies are joining forces to provide innovative and customer-centric products with transformative potential.

By breaking down traditional silos and fostering a culture of innovation, traditional players are learning to adapt quickly to emerging trends and customer demands, leveraging fintech agility and entrepreneurial spirit while providing stability and trust associated with established financial institutions.

The result is more inclusive, accessible, and responsive organisations, better suited to catering to customer needs, staying ahead in competitive markets, and unlocking new avenues for growth and differentiation.

Collaboration enables access to new markets, diversification of product offerings, and acceleration of digital transformation journeys.

A key output is knowledge-sharing that fosters a culture of continuous learning and innovation. Additionally, cross-pollination of talent happens as executives from other disciplines interact, challenging and often breaking operating procedures and mindsets that may have held for decades but are in dire need of a refresh for the current times.

While offering significant opportunities, partnerships are not without challenges. Parties must navigate differences in organisational culture, regulatory compliance, and risk management frameworks.

Effective communication, alignment of strategic objectives, and mutual trust are crucial for successful collaborations.

Striking a balance between innovation, security, and privacy is essential to protect customer data and maintain the integrity of financial systems.

Robust due diligence processes, legal frameworks, and well-defined partnership agreements are central to these challenges.

Locally, the trend is that banks, in particular, have realised they need to seed separate units to run with the opportunities present.

KCB Group, established in 1896 is pushing hard with BUNI, their open banking platform as a sandbox for innovation. The 78-year-old Diamond Trust Bank has its subsidiary DTBx with an ambitious programme dubbed Astra.

At 64, NCBA Group has LOOP DFS Limited. It has a direct-to-consumer play and is actively pursuing collaborations.

Equity Group has Finserve Africa whose traction is clear from its annual report. EcoBank Group has its Fintech Challenge that identifies and partners with fintech ready to scale and provides them with support and access to opportunities.

Though not classified as a bank, Safaricom stands among its peers as it expands value through its Daraja API and M-Pesa Super App ecosystem.

I am excited about what lies next. New products, services, and perhaps even market segments!

Njihia is the head of business at Safiri Express. mbugua.njihia@gmail.com