Lenders meet as technology has led to fundamental changes in how the local banking sector operates.
The meeting comes on the backdrop of recent studies that have urged Kenyan banks to embrace technology to better counter disruptions from financial innovations.
Research by SAP Africa, for instance, notes that failure to do so may expose lenders to a tough future marked by thin profits.
Commercial banks and policy heads will today meet to examine the role of financial technology (fintech) at a time when sector players are under pressure to innovate and outpace existing traditional brick and mortar systems.
The deliberations will take place at the 7th Annual Research Conference by the Kenya Bankers Association (KBA) and to be presided over by the Central Bank of Kenya (CBK) Governor Patrick Njoroge.
“The conference will explore the impact of Financial Technology as both an enabler and a disrupter in the credit market, delving into the bearing of technology on access and cost of credit, particularly to vulnerable segments of the economy such as low-income households and Micro, Small and Medium Enterprises,” said KBA in a statement.
The forum comes amid growing use of fintech in the banking sector as technology leads to fundamental changes in how the banking sector operates and delivers value to customers.
The event, themed “Credit Market Dynamics in an Evolving Regulatory and Market Participants’ Environment”, will according to the bankers’ lobby, also assess ways in which the financial system can “promote efficient credit allocation to the economy.”
The meeting comes on the backdrop of recent studies that have urged Kenyan banks to embrace technology to better counter disruptions from financial innovations. Research by SAP Africa, for instance, notes that failure to do so may expose lenders to a tough future marked by thin profits.
According to SAP, upstart fintech firms are introducing new customer-centric innovations at a pace unmatched by the formal traditional banking sector.
It notes while the digital revolution represents a threat to the incumbent banks, they should be wary of focusing on maintaining traditional advantages and rather think of utilising technology to create new opportunities.
Lenders have also been urged to leverage on data collected by fintech firms for mobile lending to build credit scoring systems that can slash the number of bad loans in the sector.
Latest Central Bank data shows that the level of non-performing loans hit a high of 12.7 per cent in August from 12 per cent in July.
Some lenders like Equity Group Holdings are betting on fintech to give it competitive edge with the launch of subsidiary Finserve Africa Ltd.
Analysts have argued that banks should position themselves as useful partners for fintech firms or in some cases, worthy adversaries.
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