Savings and Credit Co-operatives (Saccos) have been urged to turn their institutions into neobanks (online banks without traditional physical branch networks).
Cynthia Wandia, the Chief Executive Officer (CEO) and Co-founder of Kwara Limited, recently said that turning Saccos into neobanks will help them deal with industry challenges and build new customer bases.
Speaking at the CIO Africa Saccotech Forum, Wandia stated that by converting into neobanks, Saccos will attract young people who prefer digital experiences.
“Neobanking emerged in response to the challenges facing banks, which echo those facing Saccos today. Turning Saccos into neobanks will help the Saccos lower operational costs, allow for compliant, granular reporting and analytics to help in decision making,” she said.
She further added that the move will allow for rapid product innovation which will help generate a new customer base.
“Personalization and ease of access will grow member activity and trust. Saccos will be able to offer products that meet individual needs,” she revealed.
Cynthia said digital Saccos can take advantage of API integrations to drive unique partnerships for the benefit of members such as managing credit risks and offering third-party payment channels like credit cards.
Some of the defining features of neobanks are the use of technology to personalize services and reduce operational costs. They are also able to launch features more quickly.
According to the experts, digital Saccos can build resilience by offering the best member experience, giving them the best competitive edge and managing costs through automation.
Industry expert Phides Nyamohanga urged digital Saccos to build resilience to serve their members better.
“Saccos must ensure members have a seamless experience when using products. Services must always be available regardless of the time, location and channel used. In cost management, Saccos should automate repetitive tasks such as Frequently Asked Questions,” Nyamohanga said.
She also advised digital Saccos to develop a cyber-security culture that incorporates all levels of their organizations.
“All members must understand where cyber security fits in their line of work. Organizations need to train people on cyber security. They should hire the right cyber security experts and choose the right vendors to work with.” She concluded.
The annual CIO Africa SaccoTech Forum held at Serena Hotel brings together industry leaders from the Sacco world, Heads of IT as well as CIOs and CEOs to explore new technologies modifying the Sacco landscape by looking at various technology use-cases.
By David Kipkorir
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