The Future of Banking: The Co-operative Bank of Kenya Story

One of the most recurrent question going through the minds of many Kenyans at the moment, especially those who are economy-conscious is, ‘what is the future of banking in Kenya?’.

Will the banking sector in Kenya remain the same in the near future? Are most banks in the country going to withstand the wind of change especially in the technological world that is sweeping across the country? Do current developments in the banking sector in the country have a positive aspect or a negative one too?

The Kenyan banking sector has been through a wave of developments especially technologically. Since the time when the only mode of communication was through the sending of letters, making long and winding queues outside old antiquated telephone booths as well as having to travel hundreds of miles in search of a bank.

Things started changing as more banks found their way into the country. Branches were opened and soon the country was beaming with more banks than ever before. Currently the country has 44 banks among them 31 banks that are locally owned with 13 of them being foreign owned. The government of Kenya has a shareholding in three of the banks, 27 of the banks are commercial banks while one is a mortgage financing institution. With all these financial institutions in a country of slightly more than 42 million people, the country is overbanked.

The most defining age in the Kenyan banking sector is the age I will call the Kenyan Mobile Age. And not just mobile but let me call it the Smartphone or the Android Mobile Age in Kenya. This is the age that swept across the world, landed in Kenya and is causing a revolution in the Kenyan banking sector. Before, the only form of mobile banking was associated with the giant telecom, Safaricom through the amazing MPESA innovation. But recently, the banks have come up and as the young people now famously say banks hazitaki ujinga or banks hazipendi ujinga and they are not giving Safaricom a breathing space.

In the article, (which we did) Why Kenyan Commercial Banks Need More Than Just Mobile Apps, what clearly came out was that all financial institutions in Kenya have embraced mobile apps. In the researched article, embracing the mobile apps was a good thing but it clearly came out that most financial institutions have apps that are just duplicates of others. The bank that will stand out, therefore, is that bank that has an up that is unique from the rest. At one time, the Central Bank of Kenya Governor Dr. Patrick Njoroge remarked “Having an app is not an issue but what different that app can do is what matters.” (Paraphrased).

In this article, we have used the Co-operative Bank of Kenya as an example of a bank that is embracing technology at a faster rate especially in the utilization of Mobile Banking. This article is not trying to endorse Cooperative Bank of Kenya but among the apps we managed to analyze, the Cooperative Bank, MCo-op Cash App comes out as an amazing product that is bringing a revolution in the banking sector.

“People used to think that Co-operative Bank was just a bank meant for farmers and Sacco’s, but the institution has come up as an institution out to change lives,” remarked Joseph Ochwo, a student of Agricultural Extension at Masinde Muliro University of Science and Technology.

From the conversation going about within and without online platforms, the Co-operative Bank of Kenya has not been left behind in matters of mobile banking as they have made it easy for consumers to have access to almost of all the banking services through the MCo-op Cash App. MCo-op Cash is mobile banking service which enables one to access a variety of banking services, money transfer and payment services, using a variety of mobile networks.

The bank has made the App even better through the launching of the #NewMcoopCashApp one week ago. What is more interesting is the newly launched #NewMcoopCashApp, which is just one week old, (By the time of wring this article), has already received more than 26,000 downloads from the eager customers who want to experience the real feeling of new banking offered by the institution. According to the Google ranking of apps, the New MCo-op Cash App has been ranked the top new free app on google, further making it more unique than others.

The interest rate cap bill was passed and signed into law by President Uhuru Kenyatta capping the lending rates at 14.5 percent (currently). The institution made history when it became the first in Kenya to comply with the new rule even as others were still weighing options of whether to accept or not.

Talking of the cheapest mobile loan in town, Cooperative Bank of Kenya comes out as the only one with the cheapest rate. The Co-op Bank mobile loan rates stands at 1.6 percent with the bank seeing a more than 50 percent growth in mobile loans uptake in a very short time span with uptake on salary advances expected to increase due to the convenience of the platform.

It is not a must for one to be a customer of Co-operative Bank of Kenya to be able to access the MCo-op Cash services. Anyone is free to download the app on their phones and register, at any given time and wherever they may be. Another great advantage of using MCo-op Cash is that, one is not charged when making transactions from one wallet to another. (One MCo-op Cash to another.)

Here are some of the services on MCo-op Cash App

• DEPOSIT/SAVE money up to any amount
• SEND money to another MCo-op Cash/Co-op Account/SACCO Account
• SEND money to other Mobile Money Services e.g MPESA
• WITHDRAW money at a Co-op Agent or Co-op ATM
• TRANSFER money to and from your Co-op Account/SACCO Account
• Buy AIRTIME for any mobile number
• PAY BILLS e.g KPLC, DSTV, ZUKU, STARTIMES
• Pay for GOODS & SERVICES
• Pay FEES e.g School Fees, Rent
• BULK PAYMENTS processing
• LIPA NA MPESA/ PAYBILL settlement service
• Apply and pay for a LOAN
• Check BALANCE or get a STATEMENT
• Activate SMS ALERTS for debits and credits

Now, what is the future of banking in Kenya? The future of banking in Kenya is mobile.

Related: Get Your Dream Home with Co-op Bank Good Home Mortgage Loan

Special thanks to Vincent Wakaba, Head of Mobile Banking at Cooperative Bank of Kenya for giving us more insights on mobile banking platforms. Special thanks to Peris Gathu, Head of Marketing and Communication Department at Cooperative Bank of Kenya.)