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How CFOs are Shaping the Future of Kenyan Banking

by Connor Blake on April 22, 2021

Topics: Webinar

The future of Kenyan banking is being transformed by CFOs, but they’re facing a myriad of challenges along the way. Connor Blake, BankBI’s Director of International Business, discussed the Kenyan banking landscape during a webinar.

Connor was joined by Graham Goble, the CEO of BankBI, and Erick Ngala, Managing Partner of Priority Activator Consulting, from Kenya, to discuss the challenges facing CFOs, and how they’re shaping the future of Kenyan banking.

Key Takeaways

‘Where are we at now? Where are we headed in the future? I think the past has been erased completely.’ – Erick Ngala

  • The Crux of the Problem - Banks Need to Evolve
  • The Role of CFO has Changed
  • The Biggest Challenges Facing Financial Performance Management
  • Conventional Methodologies are Failing
  • How CFOs can Approach Innovation in Banking
  • BankBI can Help the Innovation Process

The crux of the problem - banks need to evolve

Banks are beginning to fully adopt new technology. CFOs are starting to ask how they can use data to drive banking performance, and how adopting technology can give them a deeper understanding of customer insights, behaviours, and needs.

The future of banking will be driven by interoperability, and banks won’t survive if they exist in solitude. Banks want to connect with their customers, and they need to innovate to survive. That involves transforming the role of CFO too.

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The role of cfo has changed

CFOs need access to greater insight to better manage bank performance. As banking CFO responsibilities evolve, they need to move away from being reactive to take on a more proactive role – in many cases, the CFO has become the real sparring partner of the CEO. Their role is no longer simply ‘can you manage the cost?’ Instead, they need to be delivering daily, immediate insights to truly monitor performance.

To deliver an accurate banking experience to their customers in Africa while competing with other institutions, they need to adopt to use smart devices. The question for both CFOs and banks now is whether or not their bank is built to last or built to change.

the biggest challenges facing financial performance management

A number of people taking part in the webinar said they don’t get the daily insights they require, which makes it difficult to accurately monitor financial performance. Their processes are too bogged down and there are too many manual processes. Their current platforms don't meet the needs of CFOs and finance managers, forcing them to rely on static programmes like Excel.

Daily reporting is made much more difficult because the challenge is in accurately measuring performance when you have many disconnected automated processes. This forces banks to complete processes manually – when you don’t have systems that talk to each other, daily reporting becomes weekly or monthly.

‘Every CFO’s dream is to give information that can actually change the course of the organisation through properly automated processes that are giving the right data points…what we call demand-driven insights. That is what the CFO of the future requires.’ – Erick Ngala

CFOs need to be able to manage their responsibilities with a comprehensive dashboard that they can use to advise management based on specific sector performance. CFOs are the core drivers of the future of African banks, along with their CEOs and they need the tools to do so.

conventional methodologies are failing

CFOs are being challenged to be innovative, but it’s difficult to accomplish, especially during the current climate. They need to work out how best to introduce change, and what that change looks like.

Everything has been forced to change due to the pandemic. Many banks are constrained by heavily centralised infrastructure and services, making it challenging to give remote access to those systems – including for Kenyan banks. Banks have been forced to move to the ‘new normal’ with staff working from home, driving the requirement for decentralised cloud capabilities to help employees and clients access key banking services.

As seen in the webinar however, 45% of people answered that they don’t have a specific cloud-based policy. BankBI has seen within the CFO group that it’s key to have a solution that helps you see what’s happening in your business across your financials from a top-down perspective.

‘I think it’s inevitable there will be a change of pace for institutions…I think it’s fair to say the cloud is here to stay, and there is a natural movement towards the cloud.’ – Graham Goble

When leveraging fintech and the cloud, CFOs need to be looking for three vital strategies:

  • Growing the balance sheet
  • Realise efficiencies
  • Monitor profitability

how cfoS CAN APPROACH INNOVATION IN BANKING

CFOs are wondering what the ideal solution is for innovation and how they can achieve it. Innovation needs to be rapid, and banks must think about fast time to value. CFOs need to take a look at what projects they’re introducing, especially during a time where they’re being asked to be more agile – something too IT-heavy might be a mistake for their organisation.

The real opportunity for CFOs to be innovative is to look for solutions that can be consumed as a service, and the cloud enables financial institutions to be more rapid.

‘My message to CFOs is to free yourself of some of the legacy thinking. Here is an opportunity for CFOs to really drive innovation in this area without bringing in huge investment and capital expenditure projects.’ – Graham Goble

Being able to create and receive actionable insights from data will be a major banking trend moving forward. Cloud-based services are very adaptive to different data sets, making it easier to generate automated actionable insights. These need to include:

  • Daily financial insights
  • Daily lending and deposit insights
  • Daily, monthly, quarterly, and annual capital ratio scenarios
  • Automated regulatory reporting
  • Control costs and expenses
  • Employee productivity and scorecards

One example of using the cloud to innovate is Visionfund. In Africa, Visionfund could only communicate via Excel spreadsheets. However, by adopting cloud-based solutions, Visionfund can now see deep loan performance analysis, profitability, sustainability, and more – across 30 different countries.

However, companies aren’t budgeting for this kind of a financial performance management solution – many who responded during the webinar said they didn’t have a budget set aside. This makes sense – many have had to completely revise their budget and investment plans.

bankbi can help the innovation process

As a cloud-only company, BankBI delivers cloud solutions to more than 60 customers across 40 countries from a centralised location in the UK. We act complementary to your business, examining what the cloud can deliver for your institution, and our application can be implemented in a way that doesn’t disrupt your strategy.

The BankBI application provides many services designed to provide CFOs with actionable insight, including:

  • Growing the balance sheet (helping you to see your product hierarchies, daily and monthly changes, year to date growth, and more).
  • Productivity analysis
  • Performance ratios
  • Management reports

African Banking can Lead the Way

There is a perception that in a globalised world, other countries may feel the effects of the transformation of financial technology more significantly than Africa. Yet that perception isn't always true - Africa can be a leader in banking innovation. 

Banks don't have any other options - it's not a case of how they innovate, but when. When banks use data to look at performance, they find increased efficiencies. CFOs are shaping the future of Kenyan banking by ensuring they move forward and avoid stagnation. 

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