Barclays #ticker:BBK might have been among the first banks to introduce ATMs in Kenya but it is among the last to start dispensing cash over mobile phone through its Timiza platform that the lender says has dispensed two million loans to four million customers since inception.
The Business Daily met with BBK managing director Jeremy Awori to talk about this, why they were overtaken and how the bank is navigating its transformation into the Absa brand.
HOW HAS BARCLAYS DONE IN TERMS OF INNOVATION VIS-A-VIS COMPETITION?
We went through a period probably between 2008 and 2012, coming out of the financial crisis where we were more conservative. Everyone was going through a capital crunch; there was much less risk appetite and that’s where we started seeing local banks come up with their own products.
DO YOU THINK THAT WITH TIMIZA YOU ARE TRYING TO CATCH UP WITH OTHER MARKET PLAYERS?
You can say that is just catch-up or you can say that’s a difference in strategy. Sometimes, there are advantages of being the first one out of the gate and being a market leader and sometimes this is not so you have to figure out where you want to be.
As we know from the Chinese, we do not have to be first, in fact, they say we will not even try to be first, we just copy the hell out of you and improve the products better than you and that can be a competitive advantage in itself.
DO YOU FEEL YOU LACK FIRST ENTRY ADVANTAGE; AND, HOW DO YOU BRIDGE THAT?
At some point, even mobile lending will become an ordinary commodity. I remember at the time where we launched the ATMs. It was the first time an ATM had been launched and everyone was like ‘Wow! This is so amazing you can get money anytime’.
You know those days banks were only open 9am to 2pm or 3pm, and now you have a machine that can dispense for 24 hours. It seemed like an innovation, now if you say you are introducing an ATM, people will be like, ‘What are you talking about?’
We were not the first out on micro-lending, we have come in as another player but we have done something that none of them has done, we have the holistic platform. So, not only have we caught up with what they have offered but we have offered more.
You can open the wallet on your phone, you can have the equivalent of a current account, you can save money, you can borrow immediately, it tells you how much you can borrow, allows you to early repay, allows you to send money within people on the Timiza network for free, so its more than just the lending part.
And if you use payments on that platform, it increases the propensity of how much we are able to lend to you, you can buy insurance, you can even hail Little Cab on the platform.
WHAT IS THE PRODUCT EXPERIENCE IN LIGHT OF HIGHER LEVELS OF DEFAULT?
Whether we like it or not, whenever a new player goes into this business of micro-lending, you will immediately get a whole bunch of people applying, who maybe couldn’t get loans elsewhere.
We have been particularly prudent in ensuring that we are probably a little stricter than the market in ensuring we are not just letting people borrow willy-nilly
We are also looking at the profile of the customer, we are not going to lend to students because they do not really have an income. So how are they going to pay the loan?
We have not really seen anything out of the ordinary, but this is definitely a higher risk, higher Non-Performing Loan product, it is completely unsecured.
You do not physically see the person, when you are chasing the person where do you see them? It is not like you are going to send a collector to take a taxi to go and chase a Sh2,000 loan, it’s just uneconomical, so your models have to be working very well.
MODERN DIGITAL BANKING IS CHANGING DRASTICALLY. HOW DO YOU ENSURE YOU STAY AHEAD AND STILL PROTECT YOURSELVES?
Innovation is going to be our way of life, they will be product innovation, which is the Timiza type, there will be process innovations and marketing innovation.
Customer complaints have changed drastically.
Before, you would go into the branch, you shout at somebody and they take your details and go and investigate.
Now, in the world of social media, somebody just posts it. And thousands of people can read that thing and they can say, ‘I have had that experience and it can just get a life of its own’.
So, when we started our turnaround, time was not that great to be honest, it was running like, maybe 24 hours or even two days, which would be normally acceptable for complaint at a branch where you go in and write to them. They say they will get back to you in 24 or 48 hours.
We have brought down our response time in social media to less than five minutes.
The minute you post within five minutes, a person will send a direct message (DM) and start solving the problem immediately.
We also solve 80 percent of our customer complaints with the first person you talk to because we realised people are being sent from pillar to post; go to this person right to this one, send an email to this person.
SPEAKING OF HANDLING BAD PUBLICITY, YOU HAD QUITE A FULL PLATE WITH THE RECENT ATM HEIST, FAKE GOLD IN YOUR SAFETY DEPOSIT AT A TIME YOU NEEDED TO FOCUS ON TRANSITION. HOW HAVE YOU HANDLED ALL THESE?
We went through a bit of a storm. It was unfortunate but it could have happened to anyone. All the banks offer safety deposits, they were within the regulation and the environment has just changed and the risks have changed, so we have to adapt to that reality.
It occupied our time a little bit to manage but what is encouraging is that even with that distraction our core business continues to grow.
It was a problem, a popular reading, but now it pales in significance whenever we open newspapers and read everyday.
I think our business is strong. Everything that happened in the First Half we will draw a line and hopefully leave that behind. Actually a lot of our research on the brand is, there is now good brand awareness.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
