MWANGI: 35 years on, Equity Bank keeps faith in ‘small customers’

Wednesday October 16 2019

James Mwangi

Equity Group CEO James Mwangi. PHOTO | SILA KIPLAGAT | NMG 

JAMES ANYANZWA
By JAMES ANYANZWA
More by this Author

Equity is entering a new phase of maturity as it expands across Africa. The CEO spoke with James Anyanzwa about the bank’s plans.

...................................

You recently rebranded. What does the new identity mean to Equity Bank customers, shareholders and other stakeholders?

After 35 years, everything else that Equity stood for has significantly changed except for the symbol of identity. We now have a young generation with a mean age of 24, meaning that we are now dealing with a very youthful customer base, an educated customer base and a digital customer base. The aspirations and dreams of this youthful population is very different from those of their parents.

What is the bank’s cross-border expansion model? Are you shifting focus from the mass market to corporate clients, going by the acquisition targets?

We are a mass market bank. However, we allow our customers to graduate and as they evolve, we retain them and continue to meet their unique financial needs.

Advertisement

Our foundation is still the little customers, whom we acquire at the bottom of the pyramid and the SMEs and corporates which we mostly acquire through graduation.

Our customers evolve through economic empowerment and since they have nowhere to go they remain home. However, our target market still remains the bottom of the pyramid where lives and livelihoods need to be changed.

We started from a very humble population that was excluded from accessing financial services. We have become an inclusive bank, with high net worth, corporates, SMEs.... So we needed to expand the aspirations and inspiration of the brand beyond the original segments while still remaining relevant to the unbanked, the refugees, the social payment beneficiaries and the young.

Does this rebranding reflect the reality on the ground in terms of customer service delivery?

In actual sense it is catching up with the customers. Our customers have evolved and so have our offerings. We moved from manual systems that is the ledger cards and pass books, went into computers and now we operate in a digitised environment.

In terms of our customer profile, we began with 48-year-olds, then went down to 38-year-olds and now 24-year-old customers are at the centre of the brand.

Everything else has changed so we are aligning the Equity brand with improved capability, competency and global positioning. But as we do this we recognise the fact that we have to retain the essentials of the brand and not tamper with its soul, which remains changing and transforming lives and livelihoods.

Where do you expect to see Equity Bank 10 years from now?

Without a doubt, Equity will be the dominant bank in Eastern and Central Africa. With its five acquisitions, Equity is likely to touch the ceiling of a Ksh1 trillion ($10 billion) by assets, constituting about a third of the Kenya budget and 10 per cent of the country’s GDP. That is how Equity is beginning its second 35 years.

So in 10 years if the bank continues to grow at the same pace, I trust the bank will be in 15 to 18 countries and home to more than 100 million customers in line with its strategic plan.

How is Equity Bank’s money transfer service (Equitel) performing and what was your reason for reviving a partnership with Safaricom, your rival in the money transfer business?

Equitel has given us a channel to digitise through mobile banking. Equitel has performed better than the Apps or smartphones. It is safer and more secure than Internet banking.

However, we recognised that Safaricom has a significant customer base of which we are just a segment of, and we could cope better by merging a telecom and a banking licence.

Bundling our products on Safaricom’s technological platform gives us a larger space. Safaricom has been successful in terms of person-to-person services but not in person-to-business and business-to-business, and that is where Equity comes in.

We are jointly bringing the entire scope of business-to-business, business-to-persons, person-to-business interactions and persons-to-governments under a single offering with help from Safaricom’s technological platform and Equity’s financial services offerings including insurance, banking and investment bank. This collaboration changes the risk profile of our offerings and protects customers from cyber challenges.

Talking of which, there are numerous complaints on social media about fraud at Equity Bank. What are you doing about it?

This is a problem affecting the entire industry and Equity Bank is not an exception. In fact Equity is more vulnerable because of its large customer base.

People have become greedy which is why cases of fraud are rampant. What we need is civic education and the Treasury, Central Bank and the Kenya Bankers Association must tighten regulations to respond to this challenge.

What is your assessment of Kenya’s banking sector in terms of business and regulations compared with new markets Equity has entered or is eyeing?

Kenya is a little bit more progressive and advanced than the neighbouring countries in terms of regulations and in terms of competitiveness.

We are going to countries which may be lagging behind 20 to 30 years from where Equity Kenya is. As a result, it is like re-tracing the steps that we have made over the past 20 years.

So it will be easier for us to transform, to disrupt and to democratise banking in these countries and have greater impact than we had in Kenya because we are replicating our services and avoiding the mistakes we made. That explains why within a short time we are rising to the top five banks in whichever country we enter.

Advertisement