Saccos have experienced tremendous growth in channel use over the recent past. A channel is defined as the means through which members can access Sacco products. One key indicator on the importance of mobile and ATM channel uptake by saccos is the fact that Sacco Societies Regulatory Authority (SASRA) in all their recent supervision reports dedicated a section to these banking channels.
It is important to note that acquisition of these channels is often a rigorous process and requires high level of financial investment.Saccos must strive to have a positive return on investment for these channel acquisitions. Optimum return on investment can be achieved by focussing on four main things, namely pushing for high uptake by members, creation of new revenue streams based on the acquired channels, putting in place contingency measures in case of downturns, training and sensitization of all the stakeholders in the Sacco sector.
Statistics show that when a new product is launched in an organization, the first weeks are crucial because that is when the highest uptake of the new product is recorded. Having this in mind, a sacco that launches a channel such as mobile banking must ensure that it seeks to reach out to the maximum number of members in the first week.Resources must be allocated to cater for logistics, operational and business requirements. Sufficient float must be maintained and dedicated staff assigned to handle customer queries.
Acquisition of new channels brings about opportunities for the society to make additional revenue. A staff member should be charged with the responsibility of ensuring the revenue stream from banking channels is effected and realized. When you introduce ATM machines and ATM cards, you should earn revenue from transactional charges both from your members as well as third party that use your ATM machines. Mobile banking also applies the same principle and extra fees will be charged for new services such as withdrawal from the members’ accounts.
ATM and mobile banking channels are system based and are affected by machine malfunctions and operating system errors and power outages from time to time. It is important for the sacco to plan how to handle such emergencies when they occur to ensure their members are not inconvenienced. One contingency plan would be to allow members of the sacco to have access to an alternative mobile channel that is independent of the main core banking system.
A market survey was carried out recently to find out options that respondents would take if faced with a malfunction in banking channels. 80 per cent of the respondents said they would take up the option of borrowing an emergency loan from an alternative channel.
Finally, Saccos must realize that the success of any new business venture requires the support and input of all the concerned departments in the sacco. It must not be assumed that banking channels are the sole domain of IT managers and their teams.
During the implementation process there should be an internal project manager in place to co-ordinate the internal team that is composed of various departments. The right training that is appropriate to each individual team member should be provided. The end result should be a fully sensitized organization that is aware of the new channels and the value they provide to the institution as a whole.
In conclusion, it is not enough for saccos to merely acquire new systems and channels as a way of keeping up with technology. Proper planning needs to take place prior to any investment to ensure the above four factors are taken into consideration. If this is done, the sacco will reap maximum benefits from their ATM and mobile banking channels.
Ndung’u is a business development specialist and research consultant working within the sacco Sector.
By Mary Wanjiru Ndung’u