Last week Barclays Bank of Kenya announced plans to close seven branches beginning October 1, raising fears that hundreds of jobs may be lost.
The CEO downplayed the loss of jobs fear. The same bank has joined other lenders in reducing staff through the voluntary retirement option. We expect more banks to close branches and further reduce staff in the coming days. However, unlike in the 1990s when many banks closed down or downsized, this time it is not a sign of tough times. It is as a result of improved technology; especially online banking.
Last month, one of my large clients stopped issuing cheques in favour of online transfer to payee accounts.
The financial sector is undergoing several technological changes that will render many people jobless and in the process offer customers better services.
Although the number of people with active bank accounts has been increasing over the years, human resource requirements have been reducing due to adoption of technology.
Any firm can, and should, leverage on technology to survive this technological era. For instance, the Internet has the potential to transform small enterprises in several ways such as customisation, customer relationship marketing, access to new markets, business-to-business collaboration, co-creation of a product with customers and increasing internal efficiency. Here are lessons to learn from the changes in the banking industry which every entrepreneur can use. First, reduce or eliminate manual processes.
A simple software or payment system that allows customers to get information and services faster and with ease can improve your sales. For example, a mobile payment platform such as Easy pay, paybill or Lipa na M-Pesa can attract more people to do business with you.
Secondly, partner with other players in the market and develop synergy. For example the banking agency concept where other traders are rendering banking services at a convenience and gains on both parties.
Thirdly, train the end user. Last year I was about to book a ticket at Emirates airline offices when the ticketing officer alerted me that I could save $.50 if I booked online. The message here is I don’t have to crowd their offices and they will save on rent, staffing, security etc. Banks too have been teaching customers to bank through ATM and transact online.Embrace technology or fade away.
This article was first published in the Business Daily on July 10, 2017.