Standard Chartered (StanChart) Kenya has launched an innovation hub in Nairobi in a bid to boost its revenue streams and fend off competition by riding on financial technology.
The lender says it plans to pump Sh10 billion into supporting financial technology (fintech) startups to scale up and generate ideas that will solve banking problems through its eXellerator lab.
The bank views fintech firms not as rivals but as partners amid their growing disruption of the local financial sector, StanChart said.
“We loan money to fintechs that serve small and medium enterprises and we also lend money to SMEs whom we feel would benefit immensely by having access to digital technology,” said StanChart Kenya CEO Kariuki Ngari.
The Nairobi hub will be run by the lender’s business unit, SC Ventures Kenya, and will engage tech innovators with an eye on investing in viable fintechs for product activation within home markets and cross the world.
“We want to solve problems for our customers using financial technologies that ride on a platform they have trusted for decades and is cost-effective,” said SC Ventures Kenya chief executive Kennedy Mutabi.
The eXellerator launch comes just months after a survey by global consultancy firm McKinsey expressed fears that Kenyan banks risked being crowded out of the daily payments and commerce space by agile and innovative fintechs.
McKinsey singled out M-Pesa while urging traditional lenders to devise strategies and platforms that grant banks control on next generation payments such as contact-less, QR and e-commerce to guard their turf.
Mr Ngari said the lab will be located at the lender’s Westlands headquarters. Similar hubs have been established by StanChart in Hong Kong, London and Singapore.