Kenya:Digital banking will unlock our potential

Economic growth and productivity is quickly replacing the political bickering that had almost consumed the Kenyan populace, at a time when the country has proven itself as a leader in technological innovation.

There is a correlation between the rise in financial technology solutions and productivity.

And this cascades to the individual: The more one embraces digital banking, the more time they have to do much more, improve their productivity and contribute to economic growth.

Picture this poultry farmer in Kitui. He no longer has to go to the local college where he supplies eggs to collect his payment; neither does he have to deposit it in his bank.

Instead, the college sends him his money via mobile payment and he deposits it directly in his bank account through digital banking.


To buy chicken feed, he transfers the money from his account via the platform and sends it to the supplier’s account.

An operation that would have taken valuable time away from the farmer's core business is done without moving from his farm.

That is how digital banking is not only revolutionising financial services but also giving users more time for nation building.

The mobile money transfer service, for which Kenya earned world acclaim as its trailblazer, provided a platform for the banking sector to ride on for innovation.

All mobile telephony firms in Kenya have a mobile money transfer and payments services. Those in the region and Africa have followed suit.


Mobile phone subscriptions, which the Communication Authority of Kenya’s financial report for 2017/18 says hit 41 million, shows potential for deepening financial inclusion.

A digital banking consumer has an opportunity to operate an e-wallet that enables them to save money through the platforms on their mobile phone.

They also build their credit-worthiness profile that enables them to access loans without filling or signing a form.

In fact, according to FSD Kenya, over six million Kenyans have gained access to a technology that can deliver micro loans within seconds and build a credit history that can give them access to higher and cheaper loans.

This is very convenient for the banks and even more for the consumer.


But mobile banking is just one of the many available digital platforms that supplement the traditional banking channels to offer Kenyans the convenience of banking anywhere anytime.

Agency banking, for example, offers the convenience of accessing a physical outlet within a user’s locality.

This is a function of commercial banks and is regulated by the Central Bank of Kenya legislation, allowing banks to contract third-party retail networks as banking agents.

Although technological evolution introduces new genomes of risk, heavy investment in digital security by all players has largely mitigated that.

This is also buoyed by government regulations — for example the requirement that mobile phone users have their SIM registered by the service providers prior to activation.

Dr Thuku is the Managing Director and CEO of Family Bank.