Future of banking: Brick and mortar will not die, it will evolve

Thursday October 11 2018

Charles Mwanyara Mudiwa

Charles Mwanyara Mudiwa has been the chief executive at Stanbic Bank Kenya. PHOTO | NMG 

More by this Author

Stanbic Bank’s CEO Charles Mudiwa spoke with The EastAfrican's Maryanne Gicobi about the future of banking in Kenya.

How would you rate Kenya’s banking sector?

It is vibrant, competitive and innovative. The sector is also under extreme pressure from a regulatory perspective: The interest-rate cap and the regulations that go with it, non-performing loans, innovations in the industry, cyber-security and money laundering.

What effect has the interest rate cap had on your business?

We are rethinking our business and risk models to ensure that we are efficient. We also have to examine the profiles of customers we are lending to and find suitable products for them. We are also managing risks in order to protect our shareholders’ returns.

How do banks expect to grow when they seem to have alienated SMEs and individual borrowers?


We have products to empower small borrowers, like the partnership for Uber Chap Chap that was financed by Stanbic to buy 500 cars to empower young people.

How does Kenya’s banking sector compare with Zambia, where you have worked before, and the rest of the continent?

Every country has its peculiarities and banks are spreading so fast that the competitors that I have here are the same ones I had in Zambia. We are becoming global; some bank CEOs in Kenya worked in Zambia too.

The difference is in the size of the economies: Kenya has more banks than Zambia, 45 versus Zambia’s 19. Zambia is still scaling the digital curve; Kenya has moved far ahead. But on competitiveness, they are still comparable.

What is the future of brick-and-mortar branches?

Physical presence is still necessary because people want to see an actual bank presence. There are times clients want to see bank staff and talk to them. So I don’t think it will vanish. Instead, it will progress into what I call “customer experience centre.”

Brick and mortar will evolve in what it offers, but it will still exist because customers have more confidence that a company exists when it has a physical presence. Even digital companies have a physical presence.

So are you planning to open more branches?

We will look at some reasonable expansion models in terms of what form of presence we need. We are already working on it and we will make an announcement in due course.

How are you dealing with the disruptions brought about by fintech and microfinance institutions?

We see them as complementary, so we work with them because they have an advantage of being agile and more mobile. Besides, we see ourselves as a 100-year-old fintech.

What’s your vision for Stanbic?

I see Stanbic as a bank that meets the aspirations of Kenyans, one that people can identify with.

I also want to make a difference in the community. We are putting up the Stanbic Foundation to support health, specifically cancer care. We are setting up an incubator for entrepreneurs. My aspiration is to make a difference to staff in meeting their aspirations.

What do you intend to change?

I want the bank to be seen as relevant rather than as a bank for the elite; a bank that a person looks to for real solutions. We want to change the products and how we engage with the services sector.

When a fire broke out in Gikomba market for example, we presented sewing machines to women whose equipment had been destroyed and we posted this on our Twitter page and people were asking: “Stanbic in Gikomba? What are they doing there?” That is the starting point.