Cooperative movements have been urged to adopt more technological solutions to match changing customer needs and confront emerging challenges such as cyber security.
At an annual workshop convened by Cooperative Bank, through its subsidiary Co-op Consultancy & Insurance Agency, the lender rallied chief executives of cooperatives to also ride on technology to cool off competition from other financial players and sustain their market.
Coop Bank formed the subsidiary to enhance institutional capacities of co-operative societies who form the core stakeholders of the lender.
Speaking at the workshop themed Co-operatives Tomorrow: Technology and Innovation for Sustainable and Inclusive Development, State department for co-operative development PS Ali Noor Ismail said technology will be a game changer in sustaining cooperatives’ relevance in the economy.
“With adoption of technology, we have seen new types of products introduced that meet more specific needs of members, improve liquidity in saccos and even yield better margins for co-operatives,” said Mr Ismail.
The three-day workshop at the Coast gave CEOs, drawn from different cooperatives a briefing on new opportunities enabled by digitisation as well as the frightening perils of cyber security.
Mr Ismail called on saccos to forge partnerships as they strategically think about opportunities presented by technology while also managing associated risks. “As you innovate, ensure you have a healthy balance in terms of convenience and security. As an action point, ensure you make the right investments not just on technology but on the right people too,” he advised.
Unethical system hackers
In the recent past, there has been cases of cooperatives losing either money or data to unethical system hackers due to compromised system security. Cases of rogue sacco officials misappropriating member deposits have also been reported.
This is why the government is rewriting outdated policies guiding the conduct of non-deposit taking savings and credit cooperative societies.
Coop Bank director of co-operatives division Vincent Marangu urged cooperatives not to delay in addressing challenges presented by the business environment.
“We understand that organisations are faced with numerous institutional challenges which they must address in order to attain their goals in the dynamic business environment in the country,” said Mr Marangu.
“As co-operatives are the key stakeholders of the bank, we facilitate such workshops every year to create an environment where they can deliberate, share learnings and build each other
With money laundering and terrorism financing becoming among key concerns in financial sector, the CEOs dwelt on ways of bringing on board deposit-taking saccos into mandatory reporting of large transactions
Saccos are increasingly turning to technology to reach out to more members, enhance speed and efficiency of services as well as cut on costs.
However, other institutions such as mobile-based money lenders and betting companies are riding on the same technology to pose competition to saccos, according to Mr Ismail.
Co-operative societies in Kenya employ at least 500,000 people and are the fastest growing subsector in the movement, controlling over 30 per cent of national savings.
Total assets of deposit taking savings and credit cooperatives increased by 12.4 per cent to Sh497.3 billion in 2018 from Sh442.3 billion in 2017, according to data from latest Economic Survey. (Source/ Business daily)