Banking on Air ...... Are we there Yet?

Now that cellular technology has overcome major infrastructural barriers, how are we fairing concerning wireless financial services (cell phone banking) in Kenya?

While you could make the case that the banking sector has finally embraced wireless financial services, are we really there? Looking at this from a customer-specific perspective, the indication is that we have only done so partly.

The reception of mobile phones and the internet in Kenya has been awesome. A large percentage of Kenyans own one. In Kenya, certain banks like the Standard Chartered Bank blazed the trail by introducing mobile banking earlier on.

Nevertheless, has mobile banking brought banking convenience to customers? Alternatively, is it yet to? Since all customers are convenience-driven, I will use convenience as a KPI in my evaluation efforts.”

In Kenya, the conventional internet service has failed to deliver such convenience to the larger banking population. Instead, banks offer it as to their corporate and high net worth customers as a benefit. This may have something to do with the psyche of the local bank customer who has a fear of the unknown when it comes to using internet banking; the associated cost, complexity as well as the fear of fraud.

Perhaps, this explains why many financial service providers have turned to mobile telephony as the best way to introduce convenience and reach the unbanked. It is cheaper, simple and accessible. Currently, mobile telephone service providers have an edge over banks, as they have been able to parlay this income group into customers.

The innovative mobile money solutions transact and hold a huge amount of cash in Kenya. Most are a partnership between banks and mobile phone service providers as opposed to individual banks having a dedicated customer service outfit as part of their operations.

When the full potential of wireless banking is unleashed, it will be possible to access your account information through your cell phone, check account balances and transfer money between accounts in real time.

In addition, bank customers can change PIN numbers and view a mini bank statement for their most recent transactions. They can also transfer funds in-between personal accounts, request Bank Statements, enquire on Foreign exchange rates, request a cheque book etc. All this can happen without the assistance of a live Customer Service representative.

Certain things are working in the favor of implementing wireless banking in Kenya today. A large percentage of Kenyans now own mobile phones and the onus is now on individual banks to translate the popularity of mobile phones into banking convenience.

Financial inclusion remains a challenge that banks must address to realize the full potential of wireless financial services. Banks must ensure that potential customers (including the lower income group) can open an account at a brick and mortar bank.

Given the reception of mobile phones and the internet in Kenya, I am sure that there is a large group of hopefuls poised to explore this phenomenon when it is finally here.

In my opinion, wireless financial service will mature when cellular banking is a standard feature with every deposit account.

Question: Can we Breed Entrepreneurs?

Entrepreneurship is a spirit as well as a role. It is about catalyzing change, innovation, risk taking and invention. The person who holds these qualities and traits and lives them out is an entrepreneur.

In Kenya today, entrepreneurship holds out the lifeline of getting ahead, of building an economic base and realizing our potential. Certain occurrences and trends around us e.g. mass lay-offs, hiring freezes etc. have occasioned the need for an alternative money making avenue besides formal employment. Faced with the need to make ends meet, the average Joe has little choice other than to explore entrepreneurship.Entrepreneurship, however, is a broad concept that should not be equated with staring a business. Entrepreneurs create needs and seek to satisfy them.

MFI’s play a leading role in supporting enterprise in Kenya. Their role in funding is central role to the growth of enterprise and has clear benefits to the individual and the economy.

Given their role in wealth generation, MFI’s are strategically placed to establish entrepreneurship by breeding entrepreneurs. We will highlight a few unique ways that they can do so.

First, MFI’s should encourage innovation since Innovation and entrepreneurship are closely connected.

In the MFI’s landscape, as in all organizations, there should be a deliberate effort to refresh, stimulate and inspire innovation within the organization and with their stakeholders as this is the building block of entrepreneurship. In addition, treating employees, volunteers and clients alike as customers creates an entrepreneurial culture within the organization and overtime this is transferred outside the organization.

Second, we can establish entrepreneurship by ensuring that the organization’s culture and operations encourage an entrepreneurial spirit. The culture should not be averse to the key elements in entrepreneurship e.g. innovation, risk taking and change.

In their hiring, MFI’s should seek out management and staff with creativity, vision and drive. MFI’s should hire employees who are innovative and enterprising. Such skill sets should be included in job descriptions and HR should build incentives to reward enterprise. This creativity and vision ensures that MFI’s are relevant in serving their entrepreneurial clients.

Third, key players within the community should identify the expertise needed to improve the outcomes of entrepreneurship by enlisting key players within the community, business and political arena who have that relevant expertise and are willing to share it.

Fourth, MFI’s should bolster their R&D arm and seek to design model programs and services that are replicable in more than one marketplace. Conducting regular reviews to determine the areas in need of improvement can achieve this.

Fifth, MFI’s should institute a process for continuous feedback with the community they serve. This two-way communication will uncover the real needs in society and as such benefit entrepreneurs.

Finally, a shift in thought and belief concerning entrepreneurship is necessary. A change in attitude should be encouraged through promoting entrepreneurship as a desirable career choice rather than as a necessity-driven entrepreneurial activity.

A Positive attitude toward entrepreneurship will generate cultural support, financial resources, networking benefits and other forms of assistance to current and potential entrepreneurs.

When this is in place, we will come ahead of countries with better-known reputations for enterprise.

Strategic Thinking vs. Detail Orientation: The Intricate Balance

Strategic thinking or detail orientation? It seems such a simple question, but in practice the response is much more complicated and the effects far reaching.

Many in formal employment have had a chequered history due to a failure to strike this intricate balance: one minute they are on the up, beneficiaries of corporate largesse; the next they are on the down, seen as a burden to the organization. This happens because the fail to think strategically and are therefore considered redundant.

On the enterprise front, many entrepreneurs with a vision and the technical competence to turn the vision into reality, fail because of not creating a balance between strategic thinking and detail orientation. Despite their best intentions, such entrepreneurs end up with unsatisfactory outcomes.

There is, therefore, a need to strike a balance between today’s demands and tomorrows possibilities as this can determine the success or failure of a business venture or career.

Simply put, strategic thinking is about what is required for tomorrow’s success. The objective in strategic thinking is to stay ahead of the curve and/or remain successful and relevant in your field. It requires one to pay close attention to what can affect future business results e.g. opportunities, issues, and concerns.

In our day-to-day operations,however, most of us are unable to straddle between detail orientation and strategic thinking. We either pay too much attention to the ‘big picture’ or are engrossed in the nitty gritty details of what we do.

Unfortunately, this preference of either detail or strategy influences our choice of careers, negatively affects job satisfaction and ultimately impacts on career or business success.

In addition, striking a balance between detail orientation and strategic thinking is extremely difficult and requires entrepreneurs, leaders and employees to consciously and objectively assess themselves and their capabilities in order to create a balance or address any imbalance.

Ideally, we should not have an acute attention to detail at the expense of ideas and concepts. On the other hand, we should not over-utilize strategic thinking. Rather, we should adopt a holistic view. We must look at every project in its entirety and consider all the variables e.g. human resource changes that are required or innovations that would create value.

The lack of this balance will always be detrimental unless there is an intervention. It results in a loss of the competitive edge, job dissatisfaction and a loss of creativity among others ills.

There are obvious benefits to striking a balance between detail orientation and strategic thinking. On the business front, this balance can be the determining factor in the success of a business venture. An entrepreneur must not only have a vision but also the technical competence and proficiency to turn that vision into reality.

On a personal career front, the same truths apply for individuals who want to keep adding value to their organization. Failure to strike a balance between detail orientation and strategic thinking will retard their career progress. On the other hand, attention to the future will guide an employee’s career by helping them focus on what is important. They will then engage in activities that have a long-term benefit e.g. developing skills that will be important in another assignment thereby enabling them add value to their organization.

On the corporate front, the same rule applies. Company executives should realize that responsibility over the company fortunes falls on them. They should not only have a helicopter view of things but should also know the intricate details of what goes on in the company. In the words of Harry Truman, the buck stops with them.

There are practical ways of striking a balance between detail orientation and strategic thinking in the business front or in an individual’s career.
Leaders should surround themselves with people who complement their strengths to reduce or eliminate blind spots. Managers also should create teams of people whose skills complement each other.

In addition, employees should seek job satisfaction at all costs. When an employee is satisfied with his job, he is more likely to be effortlessly creative and hence balance the big picture with the details required to achieve it.

Having a strategic intent - a focus on what is important and required for success tomorrow - is another solution to this problem. Highly skilled employees have failed in their careers because of a lack of strategic intent. As a solution, strategic intent adopts a holistic view of things and takes away the temptation of being caught-up in routines.

Real success, therefore, will be realized when we strike a balance between strategic thinking and attention to detail.

In the words of General Sun Tzu, ‘Strategy without tactics is the slowest route to victory and tactics without strategy is the noise before defeat’.

How MFI’s can Leverage Mobile Technology to gain Competitive Advantage

The way Kenyans want to interact with suppliers and service providers is changing and therefore the way businesses interact with their clientele in marketplace has to change. The Kenyan market has rapidly embraced technology. This is evident on the business front, social front and even on the political front! (One constituency holds weekly meetings with its MP via satellite!) All this thanks to the explosion in technology.

In the world of MFI’s, competitive advantage can be achieved by leveraging mobile technology. A significant step towards this has been the introduction of the Simple MFI by Kevin Gibbs a lead project at Google.

The new technology allows loan officers to carry with them current data to the field on a simple, fairly priced Ideos phone. This is a step in the right direction as they can access a set of relevant data e.g. client balances, payments, collection sheets, and loan schedules; data that they previously could not access in real time.

The new technology allows loan officers to carry with them current data to the field on a simple, fairly priced Ideos phone. This is a step in the right direction as they can access a set of relevant data e.g. client balances, payments, collection sheets, and loan schedules; data that they previously could not access in real time.

It is all about connecting teams, functions, clients and markets in order to drive performance through mobile technology. Thus the operations of an MFI’s can be transformed when mobile technology improves the efficiency and productivity of loan officers, saves on costs, and improves their service levels.

Thus it is impossible to ignore the impact that mobile technology will have on MFI’s. The implications for business are profound as they will translate into competitive advantage. MFI’s using mobile technology will reduce their operating expense ratio, increase their reach and thus positively impact their funding.

However, moving innovation from concept to becoming a reality is what the world of competitive advantage is all about. Simple MFI is open source, and is free for any MFI to use.

Leaders of Micro finance institutions should see the potential of this new technology and embrace it sooner rather than later.


Useful links:
Application Description with screenshots
Similar writeup in the Acumen blog
Application Description with screenshots
Download the Android App, use the organization name "sample"