John Gachora

CEO's Profile

Theme | Re-imagining Banking Towards Sustainable & Inclusive Growth
Topic | Banking Industry Growth and Consolidation Trends Amid Heightened Uncertainty
MONTH | October 2020

Over the past few decades, the banking industry has undergone various transformations largely occasioned by the rapidly evolving business environment as well as the desire to continue implementing strategies that are designed to optimise the banking sector’s contribution to the economy besides effectively meeting the unique needs of all sectors. These factors have continued to prompt banks to adjust their operating and service models in tandem with the dynamic needs of the economy.

In these realignments, technological innovation has remained at the centre of the industry’s efforts to reduce the cost of credit through tech-aided enhanced operational efficiency. Technology has also been deployed to enable bank clients to access to banking services remotely. These efforts have served to promote financial inclusion in line with the aspirations of the banking industry’s Strategic Plan (2019-2023).

Despite the slowed economic performance, which has been exacerbated by factors that include the COVID-19 pandemic, the banking industry has remained resilient. One of the elements that have characterised this resilience is mergers and consolidations resulting from the need to tap into the benefits of economies of scale. Through technology, banks that have merged to create larger entities are still able to retain relationships with small enterprises via innovations that process credit scoring and solutions meant to promote customer experience.

Key Messages

    1.The banking industry’s recent growth trajectory has been characterised by mergers and acquisitions. This trend signals the industry’s commitment to promote efficiency, leveraging on the benefits of economies of scale to optimise banks’ contribution to the economy.

    2.The banking industry has, through the Kenya Bankers Association, continued to spearhead further integration of technology through novel innovations such as PesaLink. With the increased customer base that comes with mergers and acquisitions, technology will play an important role in maintaining relations with small-scale bank clients and efficient provision of banking services.

    3.Due to tech-preparedness, the banking industry has been able to navigate the COVID-19 economic disruption. Digital and mobile banking solutions will continue to shape the future of banking by enabling more people to access banking services beyond branch networks.

Despite the prevailing economic challenges, the banking industry remains stable with adequate liquidity and buffers to withstand economic shocks that include the COVID-19 pandemic.