BrandArena: Absa Bank Kenya Partners with Huawei to Build a New Digital Foundation for Branch Networks

Friday 30 September 2022

Absa Bank Kenya Partners with Huawei to Build a New Digital Foundation for Branch Networks

“I see it as Lego blocks where the bottom layer is a strong technology foundation that gives us a platform to offer cutting-edge digital solutions to our customers. A strong, resilient network connects all the elements of the platform reliably.” - Moses Okundi, CIO of Absa Kenya

Who is Absa Bank Kenya?

Absa Bank Kenya is listed on the Nairobi Securities Exchange and is one of Kenya’s leading financial institutions. Established in 1916, the bank has been a major player in Kenya’s financial landscape, engaged in personal and corporate banking, enterprise, credit cards and bancassurance.

In line with the bank’s purpose of bringing possibilities to life, the bank offers end-to-end financial solutions to retail, enterprise and corporate customers, and its regional and global footprint enables it to offer cutting-edge financial solutions to its clients. The bank is a leader in the credit card space. It has also been associated with a number of market firsts, such as the launch of the first ATM, Sharia-compliant banking and unsecured lending. Absa Bank Kenya is part of Absa Group, one of the largest financial services institutions on the continent with a presence in 12 African markets and a global scale with offices in London and New York. In Kenya, the Absa is present in 38 counties. It has 83 branches, 212 ATMs and a robust Internet and mobile banking platform.

Facing the ever-changing customer needs over the past few years, Absa Bank regards "digital enablement" as one of the company's key strategies. While accelerating enterprise innovation, Absa works closely with partners to accelerate digital transformation, provide convenient and high-quality innovative services for employees and customers, and further enable the creation of a digital Africa.

Bank Outlets Rethink Their Positioning as Epidemics and Digital Technologies Hit the Financial Industry

In recent years, the epidemic and digital technologies have continuously impacted traditional commercial banks. The diversified requirements of bank users and physical isolation brought by COVID-19 epidemic have accelerated the digital transformation of commercial banks. As a result, "mobile first" has become a top topic in the industry. More and more banks regard "mobile money" as the essential way to digital transformation. As consumers embrace mobile banking, digital channels absorb many traditional banking transactions. As a result, customers ’footprint at bank outlets start to decline, leading to the closure of many outlets. However, bank outlets remain an important channel for serving customers. According to a McKinsey study on June 2020: "The focus of branch offices will evolve to help customers with their complex needs." In another Deloitte study on the outlook for banking and capital markets for 2021, "nearly half of bank respondents said their institutions are considering real-time interactions with bank staff through intelligent ATMs..."

There is no doubt that bank outlets are still indispensable in banks' digital transformation journey. However, banks are supposed to re-examine the position of offline outlets. In the future, branch offices will act as face-to-face (F2F) channels and customer experience centers where customers handle complex transactions, solve problems and receive financial advisory services. Smart bank branch networks will be the key for banks to achieve this goal and support commercial banks' digital strategies.

The Traditional Branches Connection Solution Hinders the Digital Upgrade of Banks. Who is the “Mr. Right” for this Situation?

However, traditional bank branch network architectures are no longer sufficient to support the upgrade of digital branches or even hinder it.

First, the cost of traditional WAN networking solutions for branch connection is too high. With the promotion of digitalization, the demand for real-time data transmission of financial transactions, services, and files in bank branches, as well as the demand for digital offices and high-quality video/voice within branches, has exploded. However, most banks traditionally rely on Multi-Protocol Label Switching (MPLS) to implement network connections between headquarters and branch sites, as well as between branch sites. However, the cost of construction of MPLS links is too high. Most banks hesitate in the face of such high cost. This becomes an obstacle to the establishment of intelligent branches of banks.

Traditional solutions also fall short of meeting the requirements for banking agility and flexibility. Previously, the construction, configuration, and go-live of a network at a new bank branch could take weeks or even months. Furthermore, many services that should have been available to customers if there was a strong network cannot be provided in some areas due to a lack of professional staff. As a result, traditional solutions become an impediment to the agility requirements of banking in the digital age.

Furthermore, low network O&M efficiency becomes a pain point for banks' digital transformation. Banks are typical of these situations: the network structure is complex and invisible, branch locations are dispersed, and network diagnosis cannot be performed remotely. As a result, when network problems arise, IT Technicians must handle them. It could take several hours or even days, which would be disastrous for the banks' operations and result in significant losses. As we can see, when the continuity of banking services is threatened by a network problem, traditional solutions fail.

Since the traditional branch connection solution is obsolete in the digital era, what is the best solution for digital branch construction? SD-WAN (software defined wide area network) technology is the answer. SD-WAN, as a next-generation technology and service, can help banks connect their branches and promote smart branch upgrades by constructing a powerful network based on cost-effectiveness, agility, flexibility, scalability, security, and compliance.

Absa Bank Kenya Partners with Huawei on SD-WAN Solution to Build a New Digital Foundation for Branch Networks

As business continues to expand, Absa Bank Kenya is actively seeking the most appropriate network infrastructure. "We strive to offer our customers a seamless digital experience. We want to enable them to bank and transact without any hitch and in a seamless manner at the convenience of whatever they could be," said Moses Okundi, CIO of Absa Bank Kenya. To realize that, the bank needed to build a new infrastructure to improve the efficiency of various banking services, reduce O&M costs, and enhance user experience at branches.

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