Category Archives: bank service

Kenya Crackdown on Paper Bag Banking

The Central Bank of Kenya (CBK) has sent out new mandatory guidelines to banks to be on the look out for large volumes of cash being transacted over the counter. The notice targets customers who withdraw or deposit cash amounts of Kshs 1 million (~$10,000) or above.

It requires banks to get more information about why their customers are depositing or withdrawing these large sums of cash and query (among other things):

Why can’t the cash deposit or withdrawal be made through electronic means?
What is the money going to be used for?
Who will be the direct and indirect beneficiaries of the money and provide the identity of the intended beneficiaries of the money.

Illustrative pic from the Star Newspaper to show what a large sum of cash will look like

Illustrative pic from the Star Newspaper to show what a large sum of bank cash may look like

The guidelines are drawn from existing crime and anti-money laundering regulations, and come after other attempts in the past to target money laundering, corruption, terrorism, or crime funds being transferred through mobile phones or remittances / hawala. But it seems, there’s been a realization, probably after investigations into the NYS saga, that cash was moved between banks in paper bags.

In Kenya, large sums (over Kshs 1 million) are meant to be transferred through electronic funds transfers (EFT) and real-time gross settlement (RTGS). Indeed cheques over Kshs 1 million are not accepted unless they are in support of amounts being transferred between accounts within the same bank.

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How Interswitch extends Banking Reach – Part II

Interswitch focuses on solutions for African banks and financial institutions, integrating their payment systems for seamless interaction, regardless of ways in which customers choose to connect or transact with their banks. These can be through phones, tablets, ATM’s, card, and even wearables in the future.

Banks customers can make payments from wherever they are, for batch payments, recurring payments, and also receive SMS updates on anything from remittances, send or receive payments between banks and all mobile money services, make international payments etc.

Financial institutions outsource these complex interactions and switching processes to Interswitch and can reduce their costs, leaving them to focusing on marketing, growing and enriching their customer experience. Interswitch also advises licensed financial institutions on hardware, licensing, vendors and other decisions in a way that is much more affordable than using in-bank teams.

For financial outlets, like malls, restaurants, and stores, where you’ll sometimes find rows of needless ATM’s or card reading machines taking up valuable floor space, one ATM or device managed by Interswitch could serve the transaction needs of most diners, customers or shoppers at the mall.

And behind all these, are Interswitch safeguards to manage risk, authentication, and other elements of security processes. They deal with attempts at ebanking fraud & card fraud and are up to date on the latest security features and changes in the financial sector. Introducing and integrating with new standards within banking are also a part of the Interswitch – so moves like the change to chip & PIN are seamless, and Interswitch is the only PCI certified switch in Kenya – a security standard to process leading card brands like Visa, MasterCard, and American Express.

Finally, the banking world is very competitive and there are moves in Kenya to use loyalty programs for retention. This is possible with Interswitch, which already runs loyalty programs for several banks and brands in Nigeria – tracking customers usage and transactions, so that financial institutions know, manage, reward, and retain key customers.

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How Interswitch extends Banking Reach

Interswitch products have been deployed in many African markets and can be used to extend services to bank customers in a variety of ways:

The Payment Switch is used by many banks; In Kenya they enable customers of dozens of banks to use each other’s ATM’s and to do account to M-pesa and M-pesa to their bank account transactions, even at ATM’s where they don’t have to use bank ATM cards to transact. In Nigeria, Interswitch is at all commercial banks meaning a total network of 13,000 ATM’s are available for customers to use, and in Uganda, there are 13 banks with 280 ATMs. Interswitch has just launched in Tanzania, their 6th market in Eastern Africa. Customers of these banks enjoy lower costs of transactions than with mobile providers and seamless transactions as they cross borders to trade within Africa.
Mobile solutions. An example is Centenary Bank Uganda whose customers have mobile wallets known as CenteMobile with which customers can pay their utility bills, take part in fundraisers and transfer funds, among other bank services.
Agency Banking & kiosks: Interswitch powers agency banking which is a customer delivery channel that many banks are now adopting to extending their reach while controlling costs. Interswitch powers all KCB Mtaani – bank agent locations as well as the teller kiosks in Nakumatt where customers go to load points, get M-Pesa and Airtel Money or buy airtime.
Banks Card: Verve is the leading card brand in Nigeria, and the chip & Pin card has been issued to almost 30 million customers of various banks in Nigeria, West Africa and soon Eastern Africa, starting with KCB and UBA. Verve cards are accepted on Paypal, and one new feature enables Verve cards to send one-time pay codes to friends or family members so they can withdraw set amounts at ATM’s.
Loyalty Programs: Interswitch powers loyalty programs for banks such as First Bank Nigeria; Customers earn points for carrying out transactions on their bank accounts or by using their Verve cards; They can get cash back for card usage and can get gift items and discounts at select merchants, some of who are online.

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Do Tickets Reduce Bank Queues?

Quite a few banks have invested in ticket systems to ease queues at their branches. So customers walk in, select what transaction they wish to perform on a ticket machines, receive a ticket, and wait for their number to be called up after which they go to an indicated teller to have their transaction done.

Take a number and wait.

Many of the tickets indicate your place in the queue, and how long you can expect to wait to be served. But I have issued with the system. While they work well at some bank branches, they seem to make things slower at other.

They may work in some bank branches, but in others they are just superfluous cases of copy cat purchases to keep up with the rival bank across the road.

This is noticeable in the middle of the month when there are relatively fewer customers in the bank, but you often find a high number of them wait longer than usual for their numbers to be called up.

Some observed problems with the systems:

The ticket numbers are random, so customers often wonder why their sequence of numbers are not being served. Their solution is to go back and punch for a different transactions
Some customers pick many tickets or tap the machine several times.
Some preferred transaction are not on the menu of choices to select, or there are customers who wish to do multiple transactions.
There are queue jumpers. Two variants of these are (1) bank managers who punch the ‘handicapped button’ on the machines to pull tickets for their preferred customers (2) security guards pull and hold tickets which they discretely hand to regular customers (and for which they might get a tip).
They depend on the goodwill of bank staff, but there are are bank tellers who simply don’t call up customers – You can see them sitting, and doing other things, while their number above their heads, does not change for long periods of time.

One solution is for the machines to evolves into smarter devices where customers can actually transact themselves, instead of getting tickets to form other queues in the bank. There are now more self-service stations or tablet devices at some bank branches, some just for marketing products, but going forward, they will be the devices that will really reduce queues at the bank halls.

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How Interswitch enhances Banking

Interswitch have a variety of products that are incredibly useful for financial institutions and for financial management at other institutions. They are easily deployed, and can be used internationally, easing the process of taking company financial systems across Africa’s borders which remains a challenge for many growing and large institutions.

For banks, micro-finance institutions (MFI’s), fund managers, pensions, savings &credit societies (SACCO’s), and pension administrators, Interswitch enables them to analyze incoming payments, see which of the many bank accounts the money was paid into, what it was for, see account balance, and set us SMS notification. The managers can then initiate or have the system automatically pay them out such for funds transfers to top up other accounts, or to make statutory payments.

The Interswitch business reporting tools integrate with whatever accounting system a financial institution has and have an in-built loyalty system to enable the business development and sales staff at these small institutions to know who their main customers are, filter and see the trends of what the customers like, and see how their financial products are performing. The institution managers can get such key business reports, via their mobile phones or tablets, in real-time even if they are not in the office.

The Interswitch systems help to assess staff performance with a view to enhancing perks through an easy way to track commission-based transactions and also help with security as there is an audit trail for all transactions, to see who did what or approved others, on the system. Interswitch systems are also able to flag suspicious electronic and mobile transactions and these all help to stem the fraud that plagues many smaller institutions that have not invested in technology solutions.

Interswitch enables institutions to process ATM transaction for customers of over one hundred financial institutions, enhancing the value of their invested ATM infrastructure. The systems will even work when there’s no internet connection, and for the customers of these institutions, Interswitch enables phones to act as ATM cards so that their customers can transact at ATM’s without having to carry a plastic bank card in their wallets.

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Bankelele

Nairobi writer on Banking, Finance, Technology, and Investments

Category Archives: bank service

Kenya Crackdown on Paper Bag Banking

How Interswitch extends Banking Reach – Part II

How Interswitch extends Banking Reach

Do Tickets Reduce Bank Queues?

How Interswitch enhances Banking