what is online banking in kenya

Online Banking in Kenya

online banking in kenya is also known as e-banking and it involves the account holder performing banking services from an electronic device instead of being served by a bank official. Banking in kenya has developed with globalization and increased competition from local and foriegn banks.

constrainst of online banking in Kenya

1. Security in banking is one of the major concerns for the banked. Many users of online banking are not fully convinced that the PIN they have been given is secure and that their transactions on online banking are not be affected by fraud and hacking.
2. Some customers want to deal with human beings and not a machine. It is very hard for these customers to use online banking channels though they may be more convenient for them. These customers respond better to their bankers offering face to face services and feel that this is more specialised.
3. Some bank customers have very little exposure to computers and information technology. These customers are therefore not comfortable using a computer to connect to their accounts. Since they do not understand how the computers work, they cannot trust them. These customers are mainly the older generations.
4. Customers who open bank accounts do not know the full range of accounts that are offered by their banks. They are therefore not aware about the Online banking products. The bankers do not sell the full range of products to their customers. This lack of knowledge is a constraint to the growth of online banking.
5. In many parts of the world there are challenges of constant and reliable network connections and power supply. This has slowed down on the growth of online banking especially in developing nations. To overcome this, countries are looking into alternative sources of power. The completion of the fibre optic cable project to connect Africa to Africa and the rest of the world will bridge the gaps in network connectivity.
6. Online banking is a challenge to legislators since it is new and they have to come up with rules to govern these. Many legislators are challenged to write the legislation on an idea they are not familiar with and one that keeps changing constantly.
7. Some customers prefer the comfort of seeing the paper money and not electronic confirmations. The customers see the hard cash and they either deposit it to their account or withdraw it. These manual transactions are a confirmation to them that their instructions have been followed.

To overcome the online banking constraints to growth above, banks must engage with their customers in training and explaining how online banking would affect them. They have to assure customers of security and the remedies that they would employ in case of reported fraud. The financial institutions have to train their staff on online banking and to sell these products to customers. The advantages of online banking should be understood by the users and potential users. The development of network connectivity is a global concern because globalization has enhanced cross boarder and offshore banking. the constrainst online banking in kenya must be urgently resolved to increase services to the kenyan banker.

The theory that banking in Kenya has become easier and more flexible  becuase of Internet banking does not always hold water. Internet banking was introduced to remove people queues from the banking halls. With less people in the banking halls, banks would then reduce the staff compliment. A portion of these redeemed funds would be used in improving the bank’s technology like the internet banking. This has not always been the case.

What are the advantages of Internet Banking?

Internet banking is a facility that allows you to do your banking from the comfort of your home, office or when on holiday. Some of the services you can perform on your own include but are not limited to:

• You can transfer cash or funds from one of your accounts to another of your account, for example, from current account to savings account.
• You can transfer funds to someone else with an account in the same bank
• You can set up periodic transfers or payments for loans
• You can get you statements and view your transactions

How secure is internet banking

You most likely do not have any experience of fraudulent transactions in your account. The security systems for internet banking are set up in such a way that hackers can be identified quickly, if they ever get successful in accessing the system. If one is careless with their user and password, then their accounts can be accessed and they may have their money stolen.

In some instances one may be unable to transfer funds or work on the internet due to slow internet speeds or due to the host banks’ internet banking systems having a problem. This can be really frustrating, especially for people who do not have time to queue to have the transactions performed for them. That internet banking system can give a confirmation of the successful transaction but at the end of day process, the transaction will not be updated. It is therefore important to confirm the balances in your account the next day.

The best time to perform internet banking transactions is in the morning hours before the systems, both within the Bank and the internet provider are clogged up.

Where the bank is having a problem with the internet banking service, a message should be sent on the customer’s account to alert them and reduce the time wasted in trying to perform tasks that are going to fail. The bank workers should be aware of the problems, so that they can alert and assure customers that the Bank is trying to solve the problem. Often times, the bank workers are not even aware that there might be a problem especially in internet banking service.

The banks should allow the internet banking customers enjoy uninterrupted banking services from anywhere in the world and at anytime of the day or night.