Business Daily (Nairobi)
Steve Mbogo
10 July 2008
NIC Bank has launched an online system that allows its customers to access banking services for 24 hours and uploading of payments like salaries, pension, insurance, and suppliers' fees.
The service is an improvement of the previous one, which only enabled access to account statements. The premium online banking service is a first in Kenya and will allow customers to make online purchases, transfer funds and pay for utilities.
Analysts have singled out innovation as a key driver for growth in the banking sector, which is under pressure to diversify its income sources through commissions and fees.
NIC's director of corporate banking Alan Dodd said the new internet banking system was part of an expansion strategy that includes opening of two branches in Thika and Kisumu.
"It will allow better cash management for companies and individuals," Mr Dodd said.
Companies will pay a monthly standing fee of Sh1,000 to use the service while individuals will pay Sh100 for a similar period. According to the bank, use of the online system is cheaper by about 30 per cent compared to using conventional banking procedures.
NIC also plans to have an e-trade feature before the end of the year to help its customers transact international trade online. Online banking in Kenya is presently limited to checking account statements and balances and transfers within the bank network.
Premium services
Developing software that allows integration of premium services has been a challenge for most banks.
Banks have become more innovative, depending on in-house software that allows for cheque transactions and enabling online payment of mobile phone top up, water and electricity bills. Most banks have also been waiting for enactment of the e-commerce law that would make electronic signatures legally binding.
Online transactions are highly prone to fraud and electronic signatures would help alleviate this. In the case of NIC pin number, similar to the one used for the ATM, will act like the signature. Marcel Werner, the chairman of the Kenya ICT Federation, says the ICT industry will contribute will more to economic growth with the new law in place.
"It will boost businesses, guarantee an open market, promote innovation and contribute to overall economic growth."
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