East Africa’s banking industry will likely experience an improvement in economic conditions and a pickup in investments in 2018, Mr Joseph Oigara, CEO and Managing Director of KCB Group, has said.
In a statement issued earlier this week, Oigara noted that in 2017, economic conditions in the East African region deteriorated largely in Kenya and South Sudan, with the rest of the countries closing the year with a relatively bleak performance.
At the time, geopolitical instability remained a major threat to the region’s near-term economic growth. A prolonged electioneering period in Kenya brought a slowdown in expansion across the East African region.
Nonetheless, KCB, which is East Africa’s biggest bank in terms of assets, sees some recovery coming through during the first half of 2018.
“Justifiably, 2017 was a year that can be summarised in three words: uncertain, changing and challenging,” Mr Oigara said.
In light of these challenges, Oigara stated that Kenya’s banking industry will have to move deeper into the financial technology space in order to cope with new market demands, said the CEO.
Meanwhile, in South Sudan, hyper-inflation impacted on business but we remain optimistic that the political situation will take a turn for the better, creating a conducive operating environment. It is worth noting that the Rwanda elections passed uneventfully, which was a positive indicator for business and investment in the region.
“Unsurprisingly then, most business executives would report that conditions for the financial services industry have worsened over the past 12 months, a fact that is clearly borne out in the industry’s financial performance this year,” Oigara explained.
“But the shockwaves have not solely been external. Financial institutions have also been looking inward, implementing changes to their core operations – from shortening transaction times to integrating sustainable innovation into their product offerings – re-evaluating the entire system itself. Undoubtedly, the current circumstances are all quite challenging. This year will unleash its own set of challenges, with a series of expected regulatory changes beckoning,” he continued
“We are optimistic and looking forward to a more dynamic year in 2018 across East Africa. 2017 was a relatively tough year with a prolonged election period in Kenya and with that behind us now, we expect an uptick in economic activity in the next 12 months,” Oigara said.
According to the KCB chief, two things will define the financial services sector this year: a new regulatory environment and increased investments in the financial technology (Fintech) space.
“The future lies in leveraging technology to drive efficiencies in our operations in order to serve our customers better with relevant products that meet their expectations,” he said.
“We are keen to strengthen confidence in the banking system and ensure long-term financial and economic stability,” Mr Oigara affirmed.