Why Kenyan Commercial Banks Need More Than Just Mobile Apps

According to Business Dictionary, Innovation is the process of translating an idea or invention into a good or service that creates value for which customers will pay. The dictionary goes on to say that, to be called an innovation, an idea must be replicable at an economical cost and must justify a specific need. Innovation involves deliberate application of information, imagination as well as initiative in deriving greater or different values from resources.

Kenyan commercial banks have tried in terms of innovations but a lot still needs to be done. What has been going on among the innovation among the banks in Kenya cannot necessarily be described as innovation but competition. Commercial banks have mistaken innovation to only technology and majorly concentrated on creation of mobile apps. Every bank in Kenya has a mobile app. For instance;

1. Co-operative Bank of Kenya has MCo-op Cash app that enables customers to transact via their mobile phones.
2. Equity Bank has Ezzy 257 performing almost similar functions as those of coop.
3. Chase Bank of Kenya has their Mfukoni App
4. Kenya Commercial Bank has KCB Mobi-bank
5. NIC bank has NIC now
6. Barclays Bank has Barclays Bank Mobile App

Kenya has more than 40 banks with economists pointing out that the country is overbanked. According to Soko Directory, Kenya has a total of 42 commercial banks, 12 microfinance banks, one mortgage finance company, eight representative offices of foreign banks, 86 foreign exchange bureaus, 14 money remittance providers as well as three credit reference bureau. All these banks as well as the financial institutions have mobile apps.

This article is not trying to discredit the great work being done by the mobile apps in the banking sector. The apps are amazing. In fact, they are the ones that have brought a revolution in the banking sector. The banking sector in Kenya, one that used to be dull and boring, only dealing with receiving and disseminating out cash, has now been turned into a fun, convenient, customer-friendly experience, partly thanks to these mobile apps. Using the MCo-op Cash app from Co-operative Bank of Kenya for instance, the app has some amazing features and services that have transformed the services of the bank like:

1. Enabling one to deposit and save money to their account of up to any amount.
2. Sending money to another app of the same kind, to a Co-op account or to a Sacco account.
3. Sending money to other mobile platforms such as MPESA.
4. Paying school fees.
5. Paying of services such as power bills.
6. Buying of airtime from the bank account.
7. Applying and paying for loans among other great services.

Such services as listed above, being done by a single banking mobile app are amazing. Right? That is also innovation but on a technological part. Kenyan commercial banks have not yet fully utilized the innovation for their own benefit. What the banks are doing is just copying each other so that all the banks now have mobile apps which are nice but that’s all there is to it. Having an app is one thing but having an app that does something different from the obvious is what makes all the difference.

The signing of the Banking Amendment Bill into law by President Uhuru Kenyatta on 24 of August 2016, really showed that Kenyan commercial banks were not prepared for any kind of drastic changes.

Read: President Assents to Bill Capping Bank Interest Rates

The banks, under their umbrella, the Kenya Bankers Association were against the signing of the bill into law. They cited among other things that they would incur massive losses and that the general economy of the country was likely to suffer drastically. Some economic analysts supported that too though there was no enough evidence that could prove beyond any reasonable doubt that the economy was going to shrink as a result of the signing of the bill into law. President Uhuru Kenyatta went ahead and signed the bill into law. That day was like a mou