Why going digital doesn’t make banks tech-savvy

technology, tablet
Owning the latest gadgets does not mean that you are highly skilled in technology. FILE PHOTO | NMG 

Could banks be going about digitisation like a 40-something-year-old would claim to be something he does with a smartphone? One believes the smartphone makes him digitised but it only makes one digital.

Digital is an appearance, digitised is a lifestyle. He has, for example, a Galaxy Note 9 but his ‘phone-less digitised son marvels at how dad still asks for a pen every time he wants to jot down something. “Why doesn’t he just use the stylus (‘pen’) on the ‘phone?”

The son has seen these analogue tendencies throughout every phone upgrade from Note 2.

This is the first of two articles on the challenge of banks selling themselves in a digitised world.

Banks create an app that allows customers to access their accounts via mobile. That makes them digital but not digitised. That’s why this can happen.


The app hangs (technology isn’t perfect), and the customer calls, saying, “I ‘pulled’ money from my account but it’s not on my phone. But, it has ‘left’ my account.” And the staff member responsible retorts, “Tell him to wait for 48 hours.” And why? Because he thinks he still can and that’s what the (analogue) standard operating manual says.

Before digital, resolving a similar error involved four people across three departments. With digital, human intervention can be removed and so 48 hours should be forty-eight seconds, yes? No. Faster.

That’s why Central Bank Governor Patrick Njoroge instructed banks to reduce the transaction time for PesaLink to less than 10 seconds — from the 40 they were so proud of — if he was to approve it. Can you imagine M-Pesa taking 40 seconds to complete a transaction? Speaking of which, Safaricom (a challenger bank, as such players in the financial sector, are referred to) would empathise with you if you sent money to the wrong number and go out of its way to try to resolve the issue. How do you suppose a bank would react?

The challenge for banks is not what they have but who they are.

Automating existing services is just upgrading from a ‘dumb’ phone to a smart one. It doesn’t change who you are.


This explains why a decade later banks have nothing to show in response to M-Pesa. You must be a banker if you think PesaLink is it. It also explains Dr Njoroge’s continual challenge to banks admonishing them thus: “Innovation is not just another app.” (Or, bank-wide automated system).

The smartphone does not suddenly make you digitised. Unlike your son, who is born into it, you are adapting to it. That’s why you consult him to fix seemingly complex problems, as he silently wonders what a dinosaur this adult must be.

However, he can’t help if you did not give him permission or space to do so; that is, create an enabling environment. That means letting go and acting as midwife.

This speaks to leadership re-thinking the bank’s potential and how to compete in a digitised world. And that’s our topic next week.