KBA CEO CHAT - Digital Innovation

CEO | David Thuku, Family Bank, CEO
MONTH | October 2017
Chat Admin
Good morning everybody welcome to this morning's ''My Chat with a Bank CEO'" session
Chat Admin
Goodmorning Nakhanu, welcome to the chat!
Chat Admin
Our topic this morning is Digital Innovation and Banking and our host this morning is Mr. David Thuku, the CEO of Family Bank
Chat Admin
Glad you could all join us. Happy to see a full house
Chat Admin
As we await the official start of the chat at 10am, please take a minute to update your profiles and upload a profile picture
Chat Admin
Always great to know who have on board
Chat Admin
Judy, Michael, Muendo and Sam Kerosi, karibuni sana
Chat Admin
I see Margaret, Bev, Becky, Peter, Elizabeth and Erick Karani in the house. Karibuni!
Margaret Ngenye
Thank you. Ready to learn
Chat Admin
We welcome you to begin posting your questions and comments on the topic of Digital Innovation and Banking we await the official start at 10am
nuru mugambi
good morning everyone
Chat Admin
Good morning Nuru! Glad you could join the chat
nuru mugambi
im looking forward to the conversation this morning
Erick Karani
Thanks. Eager to learn more!
SAMUEL WAINAINA
ready to learn something from Mr. Thuku
muendo kilonzo
Hello Mr. Thuku. Kindly confirm your presence.
Sam Kerosi
What are some of the biggest impediments to digital innovation in Kenya, specifially in the banking sector?
THOMAS MURIITHI
good morning ceo
Sam Kerosi
In your opinion, What technological business models will drive the biggest changes in the industry over the next 2-5 years?
David Thuku
Jambo and welcome everybody! Im looking forward to interacting with all of you on this very exciting topic!
David Thuku
Muendo...I confirm Im 'digitally' present!
Sam Kerosi
Mr. CEO could we define what really Digital Innovation is
Peter Kairu
Good morning to all
Becky Genga
Good morning, glad to be here.
Nakhanu ___
Good morning
David Thuku
As we get into today's topic of digital innovation, I would like to start by congratulating the banking industry and bank customers for their win at the Emerging Payments Awards that was held last night in London...we WON as the best innovation for PesaLink which was recently introduced by the industry as the first real-time interbank payments system. So congratulations everyone!
David Thuku
This session is important because I hope we can help demystify digital innovation. #
Margaret Ngenye
Congrats to you too Bwana CEO
Judy Kaguchia
Hello guys, glad to be here!
Conrad Karume
Good morning everyone
David Thuku
Thank you very much Margaret
Peter Kairu
My question to Mr CEO is What technologies, business models, and trends will drive the biggest changes in your industry over the next two years?
Cynthia Njeru
Good morning to all
David Thuku
Simply put, innovation is basically the application of better solutions to meet emerging and unarticulated needs. So when you introduce digital into it, its basically introducing digital technology into innovation.
Cynthia Njeru
Do you have financial advisers in your team? Can I come and get advice for free on how to invest my money?
Judy Kaguchia
Hello Dr. Thuku, how are you this morning? My question to you is: Has digital innovation changed how you do your everyday business? How are you making life easier for your customers who are very digital savvy?
David Thuku
When you introduce banking into the discussion, you then have the concept of intermediaries so the topic of today then becomes, using digital technology to meet the emerging and unarticulated needs of bank customers and society.
David Thuku
Thank you Sam for raising very important questions...
JEREMIAH NDALANA
Hi, Dr. Thuku?. With m-banking, internet banking and banking apps being incorporated by the majority of the major East African banks the challenge has now become how to remain competitive in a crowded marketplace?
Allen Kambuni
Good Morning Dr. Thuku. I hope you are well. Digital transformation is huge in today's world and has revolutionized industries such as transport and hospitality. Do you believe that there is a chance banking can achieve such levels of digital prominence within our regulatory environment? What role is Family Bank playing in ensuring the regulatory climate is transformed to accommodate this new trend?
David Thuku
There are numerous impediments to digital innovation, but the biggest of them perhaps is the mindsets of players. The human tendency to want to maintain status quo is actually the biggest challenge. Within the banking industry, the need to balance risk and customer centricity has in a way made banking seem to lag behind their customers.
Becky Genga
Hello Dr. Thuku. Has digital innovation affected the foot fall for Family Bank and are you viewing this as a good or bad thing?
David Thuku
Good morning Peter...In my view, over the next two years the biggest technology will still be mobile technology, which basically now has taken center stage in the lives of customers -- in everything that they do. The universality of Internet of Things, will continue to dominate the narrative.
Derrick Njoroge
Good Morning Dr. Thuku. Mastercard has recently launched a feature where you can take a selfie and the app sends a notification to confirm your identity. What new digital innovations like this is FBL introducing to the Kenyan market?
David Thuku
Thank you Cynthia for banking with us. Yes we welcome you drop us an email at customerservice@familybank.co.ke or reach us on Facebook or Twitter and we will assist.
David Thuku
Hello Judy and good morning to you too.
David Thuku
Indeed digital innovation has changed the way we do things; especially over the last couple of years. Our interaction with customers has moved to digital channels such as mobile and internet; interfaced with face-to-face interactions (Agency banking). All this means that customers can now access the bank any time, anywhere, via any channel.
Joanne Talma
Mr. CEO, What is your take on blockchain technology? How do you see this affecting the banking sector in some years to come?
Festus Rotich
Good Morning Dr.Thuku, Pesalink won the Best Banking Initiative category in the Emerging Payments Awards in London last night. What mechanisms have/will Kenyan banks/KBA put in place to ensure that customers fully embrace this technology?
Margaret Ngenye
Apart from PesaPap, are there any other digital innovations we should expect from FBL?
Julie Kinyua
Hello Dr. Thuku, in line with Cynthia's question, there's a new development in terms of Robo advisers; Is this something that you hope to incorporate into your business model?
JEREMIAH NDALANA
Dr.Thuku. Does Family bank feel the impact of high technological changes and need to spend a large part of their discretionary budget on being compliant, and on building systems and processes to keep up with the escalating requirements in the market with not making enough return on investment?
Nakhanu ___
Hello Dr.Thuku, what have been your biggest achievements and how do you keep yourself motivated?
NELSON NJOROGE
Hello Dr. Thuku, What are the process of opening a business account with FBL?
David Thuku
Thanks Jeremiah ... banks will work to stay competitive in a crowded marketplace by giving solutions to tensions that their customers face. So its less about the technology being deployed and more about meeting the customers' needs. There will always be challenges to solve...and that's what keeps us continuously innovating.
Chris Muiruri
Hi Dr. Thuku, we have seen several local banks providing open platforms for software developers to communicate & interact with their banking sevices. Does Family Bank have plans of providing end-points & API for software developers in the future?
Edwin Kuria
Morning Dr. Thuku. With the emergence of Safaricom M-pesa Tap to Pay, what kind of innovations are you gearing up to keep up with competition?
David Thuku
Allen, this is a very insightful question...revolutionalization of society is a topical subject and digital transformation sits right at the center of this narrative. Every industry, as you rightfully put, is affected by digital transformation. The reality is that boundaries -- between industries, between customer segments, etc -- are fast disappearing, as the focus gets to understanding the customer and what they need. Whoever understands, regardless of the industry, will continue to remain relevant.
David Thuku
With regard to the regulatory environment, the focus then becomes ensuring that the needs of the customers are being met in the best way. A good example of how the regulator can support innovation is here in Kenya...with the Central Bank of Kenya supporting digital transformation in the payments ecosystem, most recently via PesaLink.
NELSON NJOROGE
Hello Dr. Thuku, What do you think are the challenges of online payments and how do you as FBL cub them?
Peter Kairu
I watched your ad for the rainbow a few years back and that is part of the reason why I joined family bank. Should we be expecting more ads from your bank?
David Thuku
Thank you Becky. Traditionally, footfall meant people physically walking into a physical branch. But with digital transformation, footfall has continued to grow but more of it is going to other channels instead of the physical branch. So the footfall in this context is digital; and to mobile App, internet, smart ATMs, Agents, etc. This is a good thing because it creates convenience for the customer; and banks are able to serve more customers.
Alexander Ingila
Hallo Dr Thuku. As a CEO , has cyber security been a challenge to your organization? what steps has the organization taken to sensitize your resources internally on the same?
Sarah Keino
Hallo David, With increased digital innovation, there is less interaction with the customer. How do you foresee banks transforming their customer service standards?
David Thuku
Joanne, thank you very much for raising what is actually a buzzword in the industry today. Lets start by demystifying blockchain technology. Simply put, blockchain is continually growing list of records which are linked and secured by encryption. The key thing it does is to enable sharing of information or records in a secure format. In other words its like a decentralised ledger. Blockchain is actually not a new concept per se because it is really record keeping which has been part and parcel of banking since the industry was formed.
David Thuku
Record keeping in banking was manual initially, it evolved to centralised computer records by individual institutions; and what blockchain is doing is moving that steps further where the records are not owned by any single entity ... they are owned by everybody. With blockchain technology, these records can be accessed, and can be used by virtually anybody, anywhere, anytime. So this is pushing the concept of universality steps further.
Joanne Talma
Does FBL intend to apply the blockchain tech?
David Thuku
Festus we are excited to have won last night in the Emerging Payments Awards. This recognition is yet another first that Kenya is bring to the global stage. This win is not just for the banking fraternity...it is a win for Kenyan people who have time and again shown that Kenyans are very entrepreneurial and we have taken on the spirit of innovation. Digital transformation is now starting from Kenya outwards to the world -- as opposed to the previous when it was coming from outward in. We have so far seen many success over the last decade that has raised Kenya's global profile as a 'hotbed' of digital innovation.
David Thuku
Julie your question about robotics is very "digital"! Thank you for raising it.
Yohana Mdoe
I think what Joanne means to say is - does FBL intend to start using Bitcoin, Dogecoin, etc? Like how a South African bank (I've forgotten which one) recently started doing.
Yohana Mdoe
If you're going to implement robo-advisers, could you specify a help-line for those who want to speak to humans?
David Thuku
Robo advisers is part of the evolution of self service tools. The self service tools are generally being used to put the power in the hands of the customer...so that customers can do what they want, when they want to.
WALLACE LAGAT
Good Morning Dr. Thuku , with digital innovation banks and customers are relying on alternative channels but cheque remain the most common payment instrument for bulk Payment or transfer which require physical presentation accompanied by instruction letter, are there plans to Automate this place ? 2.What is te industry doing to embrace local Innovation 3. what is the industry take on E-wallets like Bitcoin?
David Thuku
Nelson thanks for wanting to bank with us...email us at customerservice@familybank.co.ke and we will assist.
Abraham Kiplangat Mutai
Just joined the chay
David Thuku
Chris ... yes we have an innovation team...contact info@familybank.co.ke...we would love to hear your ideas.
Abraham Kiplangat Mutai
David, with the latest social media craze, has family bank embraced robust social media strategies? I can share...
Alexander Ingila
I am sorry I joined in late and time may not be on our side. I have twice written to your organization on the cyber security front where we come in as experts in cyber security training but no response has come from your office especially at this time when CBK requires all banks to file strategy and policy formulation plans by end of November 2017. It make us feel you are really not keen on protecting your organization from online and cyber attacks. I am Country Manager of HackerU Ltd - Leading Cyber security academy in the world. My email is alex@hackerukenya.co.ke. We could discuss this further.
David Thuku
Edwin, I raised the point earlier that customer needs are evolving and therefore there will always be room for competition to meet their needs.
David Thuku
Alexander the point you raise about cyber security is very important because as the industry innovates, criminals are also innovating. The good thing is that the industry and the regulators and all the other entities are aligned in ensuring that we keep ahead of these criminals. So you will continue to see banks upgrading their systems; and incorporating tighter cyber security controls. At industry level you will also see industry solutions, for example the recent Chip and Pin technology which has practically eradicated the card skimming fraud. The regulator has also taken up cyber security as a number one priority for the industry.
Alexander Ingila
Thank you for your response.
David Thuku
Sarah...thats a very interesting point...whilst there are services that customers can do on their own; there is still human interaction; however now its via the digital channels (telephone contact centers; video chats; emails; Whats App, Facebook, etc)...self service is just one of the options that a customer can choose; ultimately, there will always be human interaction.
David Thuku
Joanne our innovation team is exploring blockchain.
Chat Admin
Time is running out. We will soon be wrapping up the chat
Sam Kerosi
Thank You. Excellent Session
David Thuku
Yohana, Joanne actually raised a correct point...Bitcoin is just one use of Blockchain technology...and we are looking at all the ways we can use blockchain tech.
Yohana Mdoe
Oh, OK. Understood.
David Thuku
Wallace thanks for your question about cheques ... PesaLink is one of the ways we are innovating small to large payments. it is an instant transfer of funds from as low as 100 to as much as 999,999.
Alexander Ingila
I think the human resource bit should be key in the war on cyber security. We offer that side of skilling for general staff, Core IT staff, Core Cyber security units, senior management and the Executive. All these members of staff have access to the company intranet through their Mobile devices.
David Thuku
Abraham our team here at Family Bank definitely recognizes the importance of social media as one of the platforms that have emerged as one of the ways through which our customers want to engage with us.
David Thuku
Derrick we have an innovation team thats working on some exciting new products and innovations...stay tuned!
David Thuku
Nakhanu thanks for your question...how do I stay motivated? When we are able to meet the needs of our customers, this motivates me to continue exploring how to do even more. I stay personally motivated by connecting with nature.
David Thuku
Peter the Rainbow Ad on transforming lives was fun! We will continue to do more of such.
David Thuku
Nelson I see your question on the challenges of online payments...I think the key challenge is cyber fraud...and we are constantly working on this.
David Thuku
As we close...I would like to thank you all very much for the engaging discussion today...the topic is wide and our objective today was to demystify digital innovation and I hope we have done that to some degree.
David Thuku
It is an ongoing and evolving discussion and lets continue to engage in it using the various channels. The future looks very exciting and beyond our current imagination...and that's what makes the topic of digital innovation in banking very exciting. Lets all keep current on the subject.
David Thuku
So thank you for spending this past hour with me...I wish you all "digital" weekend! God bless you.
Sarah Keino
thank you too
Chat Admin
Ladies and Gentlemen, we’d like to take this opportunity to thank Dr. Thuku for being with us today and for his insights on the topic of Digital Innovation and Banking
Peter Kairu
Thank you for your response
David Thuku
Karibu sana Sarah
David Thuku
You are very welcome Peter
Chat Admin
We would also like to thank you all so much for your questions and comments. Your contributions have made this session a success
Becky Genga
Thanks for your time and responses. Loved the lesson on blockchain technoogy. All the best to Family Bank.
Alexander Ingila
ahsante sana :-)
David Thuku
Asante Becky
Chat Admin
Kindly note you can get copies of the transcript, podcasts and other information relating past chats in the Archive page of chat.kba.co.ke website
Chat Admin
@Alexander Ingila, thank you for logging on but please note that this is not a platform for marketing and personal business promotion
nuru mugambi
Awesome session...thanks David
Chat Admin
We welcome you to join us on KTN Kenya Facebook page for a live session where Dr. Thuku will be continuing the discussion on today's topic
Chat Admin
Do log on!
Chat Admin
The chat room closes in the next 10 minutes. We thank you once more for joining us and wish you a wonderful Friday and weekend ahead!
Margaret Ngenye
What time does the KTN one start?
Chat Admin
Hi Margaret, it's currently on-, you can join in now
Margaret Ngenye
thanks