Swiss ICT firm eyes Kenya’s bank sector

Swiss software firm SOFGEN is eyeing Kenya’s lucrative financial sector with a core banking cloud computing system. The system was developed by US firm Microsoft Corporation.

The firm, established in 1999, has just introduced Temenos T24 Cloud Platform in the Kenyan market but it has provided solutions for a number of local financial institutions including Kenya Commercial Bank, K-RepBank, Kenya Women Finance Trust, and Commercial Bank of Africa.

The new service largely targets microfinance institutions (MFIs), deposit taking microfinance institutions (DTM), and Saccos.

“Because of their sizes most DTMs and MFIs cannot afford high-end core banking systems which exposes them to a lot of risk and fraud; cloud computing will help them share the platform,” said Tunde Oladele, SOFGEN Africa Ltd chief executive.

He said the company was already migrating a micro finance institution to the cloud platform but declined to disclose the identity of the institution.

“We are talking to a number of MFIs and are currently migrating one MFI; most of them have adopted a wait and see strategy,” said Mr Oladele.

Cloud computing is a term defining the delivery and storage of data where information and the software used to access it is remotely hosted on external or internal servers.

Other than enabling users to conveniently access information from any part of the world, the cloud technology has other benefits such as eliminating high costs incurred through maintenance and system upgrades.

Other benefits include cost savings as users only incur costs when consuming data.

Users also enjoy the ‘‘multi-tenant’’ element — where many people can access the service simultaneously.

Institutions that will subscribe to the Temenos core banking system will pay based on the number of transactions carried out through the platform.

The company said the system would eliminate the need for heavy investment in core banking systems while giving clients access to high-end services.

“In Kenya Sacco’s and microfinance firms carryout about 90 per cent of economic activities, but due to their sizes most of them don’t afford quality core banking systems making them susceptible to fraud and even money laundering,” said Dr Andrew Mullei, a former CBK governor and the chairman of SOFGEN Africa Ltd.

According to Deloitte, East African banks lost Sh4.06 billion to fraud in the 18 months to June with the fraud on the increase.

Banking fraud in the region was 25 per cent higher than a similar period in 2010.