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The Changing Face of Banking Industry

by Wanjiku Mbugua

Top Banker says problems happening in the sector not unique to Kenya

 By Bonface Otieno Kanyamwaya

Regulation and Innovation are fast becoming the two main drivers of change in the banking industry in Kenya. A lot has happened over the last decade with the introduction of digital solutions and more recently the introduction of stringent regulatory guidelines and oversight.East African Business Times Magazine’s Bonface Otieno Kanyamwaya caught up with CFC Stanbic Bank Chief Executive Philip Odera for a chat about his thoughts on the above subject. Excerpts;

Q: Where are we as an industry compared to our peers in the region and on the continent?

Odera: I have had the benefit of operating in several African countries and I must say that we often beat ourselves down for matters happening, as if they are unique to Kenya. Virtually every market goes through challenges at certain times of its development and Kenya is not unique in this regard. Having said that, outside of South Africa, Kenya has far more depth, skill set, and product and service diversity than most countries in sub-Sahara Africa.

Q: The spotlight is on banks right now with the recent developments and questions are being asked about the stability of the sector. What is your assessment of the situation?

Odera: I think that it’s important to differentiate between the sector and a few players within the sector. If you go back to the history of banking in Kenya over the last 30 or so years, we have experienced a number of institutions that have run into challenges. To a large degree these have been precipitated by poor or inadequate governance framework in the respective institutions. Consequently because these challenges have vested in individual institutions rather than in the banking sector as a whole, the rest of the players have been able to grow and mature accordingly.

Q: The proposal to raise the minimum capital for banks to Ksh.5 billion from Ksh. 1 billion will come into force in two years. How do you see this playing out ahead of its implementation?

 Odera: Raising the regulatory minimum capital is one thing and is outside my area of control, so I will not speak to that.  I do however feel that in order to continue playing in this sector and as an institution of any stature, there will be a requirement for increased capital in any case given the vagaries of an ever changing economic environment and the need to strengthen balance sheets. In fact I strongly believe that a large capital base will more and more become a competitive advantage for players in the sector going forward.

Q: Away from the regulations and oversight, digital has emerged as the next frontier in the battle for customers by financial institutions. Are we up for it?

Odera: The reality is that digital has been around for quite some time now. The challenge has been with the slow pace of adoption or change by the financial industry as a whole and this is what has given rise to the proliferation of the FinTech companies in different parts of the world. As Stanbic Bank we have fully embraced the capabilities of digital banking and have rolled out some branches that are fully digital and which facilitate customer interaction and services at levels previously unimagined a few years ago. We intend to continue leading the market with our digital offering.

 About the CEO

 Mr Philip Odera was appointed the Chief Executive of CfC Stanbic Bank Limited on 2nd March, 2015. Mr Odera has been with Standard Bank for 15 years where he joined as General Manager at Stanbic Bank Kenya Limited. He has served Standard Bank in various capacities as Country Head and Managing Director in Kenya, Malawi and Uganda.

Prior to joining Standard Bank, he served as Consumer Bank Head at Citibank NA, Kenya. He has 29 years of experience in banking and financial services industry, rising from position of Commodities Analyst in Boston (USA) at Kramer Brokerage Company to his current position as Chief Executive, CfC Stanbic Bank Limited.

He holds a Bachelor of Arts degree (Economics) from St Lawrence University, New York and a Master of Business Administration (Finance) from Suffolk University, Boston both in the United States of America.

He sits as an Executive Director in the CfC Stanbic Bank Board and Non-Executive Director on the Board of SBG Securities Limited.



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