The Star (Nairobi)

4 July 2014

Kenya: Co-Op Bank, KCb Hit By System Hitches

Co-operative Bank has suffered system outages for the better part of this week, greatly inconveniencing its customers. Insiders at the bank said the problem started back in May, when systems started going down every so often. It is however unclear whether the problem lies with its core banking system as its IT department has not communicated to the branches on the issue.

Yesterday, the bank's branches were operating off-line and some serving only customers with accounts there. Branches serving all customers are having a hard time to reconcile the transactions done off-line.

"We are sorry; our systems are down. We will only serve customers who belong to the Westlands branch only... for both deposits and withdrawal," a branch official at Co-op Bank Westlands told customers.

Early this week some of the bank's customers lost out on opportunity to buy Treasury Bonds allotted in the latest re-opening of the 20-year bond offer yielding over 12 per cent.

One such client had to seek the intervention of the bank's top management to beat a 10am settlement deadline last Tuesday. Francis Ngambi, the personal assistant to managing director Gideon Muriuki, said the issue was being resolved.

"... there's a temporary challenge with the system but it's being worked on. We expect the systems to be regularised by 4pm today (yesterday)," Ngambi said on phone yesterday.

He argued that the bank has this week experienced a surge in transactions, but "any backlogs will be resolved by 4pm today (yesterday)". "We know it's a huge loss to the bank in many ways, including our image to our customers," Ngambi said.

Co-op Bank and KCB Group - which are two of Kenya's six largest banks by market share - are having trouble with their systems especially at end-months.

KCB's systems have had issues since February. Some customers now allege the bank could be pushing them to the more expensive mobile banking service.

They argue that they are denied cash at ATMs despite the mobile platform showing accurate balances. In April, KCB blamed the system hitch on the process of migrating to EMV-compliant platform, but its systems are still on and off to date.

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