Massive bank lay-offs on the offing as firms cites technology changes and dynamic regulatory regime.
More businesses are likely to continue laying off workers as Technology continues to develop and the banks and insurance companies are likely to be the most affected, this is according to banking and financial services technology expert Brett King.
King who was in the country to talk about the Future of Banking said that more employees in the banking industry will be left jobless as lenders increasingly invest in mobile and online platforms.
King pointed out that the banks need to move away from “selling the product to customers to selling the experience”
“The fastest ever change in financial inclusion with access to financial services we have ever seen in the history of mankind occurred right here in Kenya,” King said during a discussion on Fintech themed “Becoming the Future of Banking in Nairobi.”
The banks have already started bearing the brunt of change in technology after about nine banks announced plans to retrench staff in an ongoing digitization process.
Tier 1 lender Kenya Commercial Bank has announced that is set to lay off a section of employees in what it attributes to technological changes and a dynamic regulatory regime.
KCB Group Chief Executive pointed out that in the past two years, the lender has recruited more than eight million customers on the KCB M-Pesa platform only.
“In the last 2yrs, we have had over 8M customers on KCB M-Pesa, nearly double the customers we had for 120 years, as KCB, we are working on launching our new Fintech business later this year”
“The review which is an ongoing process that has seen us re-look at our workforce has been done in keeping with the best business practice in an industry that is undergoing a major transformation,” the bank says in a statement.
According to the bank, the process will be within the confines of the law.
Other banks embracing the new technology to reduce workforce cost includes Equity which has already retrenched about 400 staffs through natural attrition, Standard Chartered (300), NIC (32), Family (unspecified), National Bank (unspecified), Ecobank (unspecified), Bank of Africa (unspecified), First Community (106) and Sidian (108).
In 2015, banks sacked 2,036 staff, largely in clerical and secretarial units, as lenders automated their systems to enhance operational efficiency, the Central Bank said in its last Banking Supervision Annual Report.
This is the fifth bank to announce layoffs and early retirement programmes from 2016 to date.
Last year, Standard Chartered Bank announced that it will be relocating its Shared Service Centre to India, affecting 300 jobs.
The same year saw several banks including Community Bank, Eco-Bank and Sidian Bank also announce early retirement programmes affecting nearly 600 jobs last year.
The banking sector has continued to experience tough times with three banks being put under receivership as well as interest rates control introduced in August 2016.
The International Monetary Fund (IMF) has urged Kenya to remove the controls, which limit interest rates to four per cent above Central Banks’ lending rate, citing that they are likely to reduce access to credit and weigh down growth.