KBA boss Habil Olaka on investments banks are making as branch activities decline

Habil Olaka, Kenya Bankers Association chief executive officer. Illustration | Joseph Barasa | Nation Media Group

The banking sector is experiencing increased digital adoption that has cut customer preference for physical branches to about 16.5 percent.

The Business Daily spoke to Kenya Bankers Association (KBA) chief executive Habil Olaka on investments banks are making to suit customer expectations, the emerging risks from this wave and the skill sets the sector requires for it.

Since 2018, KBA has been conducting the banking industry customer satisfaction survey. Why does it matter?

As KBA, we are at a vantage position in terms of getting general feedback from the banking public. The feedback positions us in a way that we want to ensure banks are responding to customer concerns and that their experience is improving.

To what extent does this survey influence investment decisions in the sector?

In a big way. For example, feedback from previous surveys makes banks take note of significant areas of concern for customers and then develop a road map to address those concerns.

For example, people living with disabilities is a segment of banking community that can easily be neglected. It requires us to get direct feedback from such people to start seeing things from their perspective so that as we innovate.

What size of budgets are banks dedicate to technology?

Banks are in a fierce completive environment and so each is trying to keep itself ahead of others. Being competitive means customers going to them rather than to competition. The only way is by making their services pleasurable, accessible and convenient to consumers.

We are seeing more investment in technology but not just for customer experience but also for security against increasing cyber risks.

Technology is one of the biggest investments by banks now.

In terms of skills set, what is becoming more attractive?

In terms of skills investment, there is the function of compliance which is becoming a fairly critical one. This is compliance in all perspectives, for example, in terms of data protection in line with the law.

The challenges of money laundering, terrorism financing and proliferation financing are increasing and that means additional skills to address these risks.

The KBA survey shows customer preference for branches at 16.5 percent but banks continue to open new physical outlets. Is it a contradiction?

It may look like a contradiction, but at the end of the day, even as we go deep into technology, that human experience with customers is not going to end. Many customers still want to walk into banks and talk to human beings about their experiences.

Many have accounts in different banks. What is driving this and are there any concerns that this could promote the hiding of large and suspicious transactions?

Different banks have got different strengths and customer needs vary depending on which product they want.

The ability to use multiple banks to split transactions and hide from the law is fairly limited because at the end of the day transactions have to originate from a particular bank and it will still be flagged. So, it is so remote.

Several firms are testing AI in customer experience. What can customers expect from banks?

AI is still evolving and various sectors including banking are still trying to see how to leverage on it to facilitate customer service delivery. We are still in the discovery phase before we can start applying. It is a learning process.

One other thing linked to customer satisfaction is the transparency in pricing of loans. The cost of credit website seems not to be up to date. Is it an abandoned resource?

No. Actually it is working. The only thing is that it is a collaborative effort between ourselves and the Central Bank of Kenya. From our end, we ensure banks post current information. All that customers are asked to do is to visit the portal but then vote with their feet if the rates displayed aren’t what they are actually offered.

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Note: The results are not exact but very close to the actual.