TechPression

Tag: digital banking

  • Kenyan Banks Scrap ATMs Amidst Digital Banking Growth

    Kenyan Banks Scrap ATMs Amidst Digital Banking Growth

    The monthly cost for Kenyan banks to operate a single ATM is more than $900, and this expense rises for top commercial banks with hundreds of ATMs dispersed around the nation.

    Customers who wish to avoid standing in line for extended periods of time in banking halls have traditionally turned to automated teller machines (ATMs).

    But that is no longer the case, given the expansion of digital banking choices like agent banking and smartphone apps. For the fifth year running, this has enabled conventional banks to lower their ATM investments.

    Read also: Risevest acquires fintech company Hisa to enter Kenya

    Data from the Central Bank of Kenya (CBK) shows that between January and December 2023, banks closed 77 ATMs, bringing the total number to 2,282. Compared to the peak of 2,573 ATMs in 2019, this is the lowest number of ATMs reported in the nation in five years.

    Digital Banking on the Rise in Kenya

    The rise in popularity of online banking channels is the cause of the change. Digital channels have been embraced by all local banks, beginning with Equity Bank, which is the largest bank in Kenya based on market capitalisation.

    Digital banking has grown in Kenya between 2020 and 2024. The value of digital payments in the country rose from $2.63 billion in 2019 to $7.15 billion in 2023 and is projected to reach $8.58 billion in 2024.

    Digital banking could also reach a net interest income of $255 million by the end of 2024.

    By March 2024, mobile banking had risen from 52% in 2020 to nearly 68%, making it the most popular channel.

    A slower growth rate was also seen in Internet banking, which reached about 23% in March 2024 due to rising Internet availability and device ownership.

    Read also: Mercury Bank now restricts accounts for Nigerians

    Kenya’s Cashless Transition, Trends and Statistics

    Every ATM in Kenya costs at least KES 117,000 ($906) a month, and institutions with 380 ATMs around the country, like Kenya Commercial Bank, may have to pay over KES 44.4 million ($344,000) for upkeep.

    Kenya’s mobile money transfers reached KES 788 billion ($6.1 billion) in December 2023, showing that people want to pay for things without cash.

    Mobile money has grown to 38.7 million consumers, resulting in a 75% penetration rate. The volume of money transferred through these platforms showed a significant increase from KES 7.8 trillion ($60 billion) in the year ending in June 2023.

    Despite the CBK’s decision to reinstate transaction prices in early 2023, the COVID-19 epidemic further accelerated the adoption of mobile payments. Despite this, a significant number of users continued to utilise the channel.

  • Kuda emerges as the winner of 2023 AFTSS ‘Excellence in Digital Banking

    Kuda emerges as the winner of 2023 AFTSS ‘Excellence in Digital Banking

    Kuda, the African money app, has won the 2023 Africa Fintech Summit (AFTS) Excellence In Fintech award, which was awarded by the Africa Fintech Summit (AFS) in Washington. 

    The startup took the limelight, beating out four other prominent African fintechs – TymeBank, Moniepoint, FairMoney, and MNT-Halan – to win the award.

    Kuda, along with the other four fintechs, was nominated for the prize earlier this year by the Africa Fintech Summit. The award winner was chosen via an open voting procedure. 

    At the Africa Fintech Summit event in Washington, DC, a representative from Kuda accepted the prize on behalf of the company.

    Read also: Kuda enhances its app to enhance customer experience, improve UK-Nigeria transfers

    The fintech company CEO thanked the AFTS team for the honour

    Babs Ogundeyi, the Founder/CEO of Kuda, commented on the prize, saying that the firm, and indeed the whole team, were thrilled to receive the Africa Fintech Summit’s 2023 Excellence In Digital Banking award. 

    He said that the award recognised the team’s dedication and perseverance in developing new solutions that expand access for Africans living on the continent and in the Diaspora to inexpensive and high-quality financial services at all times.

    “In almost four years of building the money app for Africans, awards like this have been a meaningful acknowledgement of the work we are doing to make financial services accessible, affordable, and rewarding on the continent and in the diaspora,” he said.

    Ogundeyi celebrated the other candidates and appreciated everyone who voted for Kuda to win the award. He also thanked the AFTS team for the honour, promising them that the Kuda team would continue to do so.

    “Beating out four other fast-rising African fintechs for this award is no small feat, and I’m excited about the next phase of our mission to make financial services accessible and affordable to all Africans.” Congratulations to the whole Kuda team,” Ogundeyi said.

    Kuda aim to provide Africans with internet-enabled smartphones a full-fledged bank account

    Since its inception in early 2018, AFTS has hosted over 4,000 stakeholders from over 100 nations, making it the biggest bi-annual meeting of financial technology stakeholders on the African continent. The AFTS was established in 2017 with the goal of bringing together the challenges, trends, and changemakers shaping Africa’s financial technology ecosystem.

    Mr Ogundeyi and Musty Mustapha co-founded Kuda, a fintech business that operates noin Nigeria and the United Kingdom, in 2019. The fintech company’s goal is to provide Africans with internet-enabled smartphones with the ability to manage a full-fledged bank account, save and earn interest, obtain immediate credit, and transfer money without expensive costs.

    Kuda was also named one of the WEF’s seven African technology startups to watch in 2021. The financial services company is now valued at $500 million and has collected more than $90 million from investors such as Target Global and Valar Ventures.

    Kuda is peculiar among neo banks in that it is developing its services while possessing its own banking licence. This allows it to be more flexible and fast-moving when developing new products or refining old ones. It also gives the firm more credibility in an area where individuals who previously banked with incumbents may be skeptical of new entrants.

  • Africa take big steps toward digital banking

    Africa take big steps toward digital banking

    In the last five years, financial institutions in Africa have made big steps toward digital banking. More people and businesses are choosing digital self-service over traditional brick-and-mortar locations, paper records, and hard currency.

    For the time being, African challenger banks and traditional banks must rely on foreign technology solutions developed for Western markets. Many of these solutions are hard to use because they are expensive, don’t fit the market well, or don’t have technical support in the area.

    In order to better digitize banks across Africa and facilitate the emergence of a fully automated and connected financial ecosystem, Appzone Group (now Zone), a pan-African fintech software provider that has grown to become a payment infrastructure company, has carved out its Banking-as-a-Service (BaaS) platform from the existing business into a new business entity named Qore.

    The company used to be made up of four different departments. Now, the top commercial banks, fintechs, and neobanks can use its platform to offer new, specialized financial services.

    Qore has offices in Nigeria and Kenya and clients all over Africa, including Ghana, the Gambia, the Democratic Republic of the Congo, Equatorial Guinea, Tanzania, and Senegal. It helps traditional banks make the transition to digital, but many of them are still using old systems that make it hard for them to compete.

    Qore processes about $11.9 billion in transactions every year for 18 commercial banks and over 450 microfinance organizations, for a total of 21.6 million transactions. Its systems produce 12 million new cards annually, disburse over $1.7 billion in loans, and handle $200 million in deposits for 20 million hosted accounts.

    Read also: Top 10 Neobanks in Africa

    Digital banking big shift

    Emeka Emetarom, co-founder and CEO of Qore, says the company will keep pushing African financial institutions to compete at the highest levels of performance and innovation.

    “We know what’s stopping financial products in Africa from reaching their full potential and ending the problem of financial exclusion, which has been going on for a long time. So, Qore is shifting its focus to making banking across the continent simple and easy. A business that “Because on BaaS, we are optimistic about our future and the future of digital institutions may now provide highly relevant goods at a fraction of the cost because to Qore’ofmarket fit and cost-effectiveness. 

    For immediate, no-cost interoperability with other market participants, we are also making the platform’s many connections with major payment systems.

    We know what’s stopping financial products in Africa from reaching their full potential and ending the problem of financial exclusion, which has been going on for a long time. Genetically African cloud-native core banking and integrated channel solution, according to the company’s co-founder Umukoro.

    The platform is flexible enough to meet the needs of African banks and fintechs, and it is easy to get help from people in Africa. End to the enduring problem of financial exclusion. Thus, Qore is shifting its attention to enabling limitless and simple banking across the continent. Because we have fully digitized and automated the operations and products of over 500 Financial Institutions on the continent, we are ready to take on the rest of Africa,” Mudiaga remarked.

    Appzone Group Carves Out new company to Digitize African Banks

    What to know about Qore

    Qore supports immediate card issuance, in addition to a merchant services platform, USSD interfaces, payment ecosystem connectors, and merchant services capabilities. The platform also has modules that automate the entire lending process, collect payments from various accounts via direct debit, and support Agent Banking. Financial technology companies such as digital lenders and neobanks, as well as more traditional financial institutions such as Commercial Banks, MFIs, Mortgage Banks, and Consumer Lenders, have access to these features.

    The platform is adaptable to the needs of African banks and fintechs thanks to its flexible design and ready access to local assistance.

    During the company’s Series A funding round in 2017, Appzone received $10 million from CardinalStone Capital Advisers, a Lagos-based investment group. “It’s been incredible to see Appzone expand and transform into what is today Qore since we made an investment there, and we couldn’t be more thrilled to be at the forefront as Qore charts a new course for digital banking in Africa,” Yomi Jemibewon, Partner and Managing Director of CardinalStone Capital Advisers

    As the only African Banking-as-a-Service (BaaS) platform and the de facto provider of banking technology in the OFI segment, Qore has had a significant influence on the Nigerian and African financial services ecosystem over the past decade.

    The establishment of the first cloud-based Digital Core Banking and omni-channel software in Africa, the introduction of the first self-service platform for instant debit card issuance in Africa, and the development of the first and only correspondent banking automation platform with all Nigerian commercial banks integrated are also significant achievements for the company.