Banks and telcos have been challenged to find a common ground in deploying digital solutions that will reduce cash transactions, instead of undercutting each other.
About 96 per cent of transactions in Kenya are in cash, since the retail sector has not been fully digitised.
Financial sector players attending a Financial Times Africa Payments Innovation Summit in Nairobi on Wednesday said there is need for more collaboration among banks, telcos and fintech to achieve financial inclusion in the digital economy.
Banks and telcos are always after the same customer, and this has affected the trust between them, several participants at the summit noted.
“Mistrust between banks and telcos is basically whose customer they are serving, who owns the infrastructure and the loading of additional costs on transactions between the two,” said Equity Bank #ticker:EQTY chief executive James Mwangi. Players in the banking sector said with the advent of smartphones, the digital payments products platform has been levelled.
Smartphones penetration is increasing as they are becoming more affordable, implying that in the near future, the battle won’t be on who owns the infrastructure.
A research conducted by data and analytics firm GlobalData Mobile Broadband Forecast last year had projected that the number of active smartphone subscriptions in Kenya would touch the 20.1 million mark by end of last year.
It also noted that by end of 2022, more than 80 per cent – translating to 31 million – of total handsets in the country will be smartphones.
This growth is being driven by an increasing number of low-priced smartphones sold for as low as Sh3,500.
The forum noted that there will be need for more data scientists to do predictive analysis that can be applied to customise products and services for consumers.
“Data in itself does not have as much value. The ability to analyse and use it to develop predictive models is what matters. That’s where the value is,” said Mr Mwangi.
Telcos had the advantage in feature phones because of SIM cards, but today any bank can do transactions if their clients have smartphones.