How Equity Bank built an innovative fintech company out of a traditional bank

In his breezy office in Upper Hill, Nairobi, Jack Ngare, Managing Director of Finserve, had an easy manner as he shared his experiences and excitements in growing Equity Bank Group’s spin-off fintech. As I sat down to interview him, over the next hour we discussed everything from the roots why Equity Bank would want to spin off a subsidiary to where Jack views the future of fintech across the continent.

Equity Centre [Twitter/Equity Bank]

It is refreshing that he is neither as conservative as the traditional authority in banking nor as technical as an ex-CTO. In fact, he speaks more about customer-centricity and collaboration as the secret to their growth.

Before Finserve, Mr Ngare was employed at British Telecom and was involved in various projects in Saudi Arabia, UK, and Peru as well as in Japan for a joint venture with NTT Docomo. Following his stint at British Telecom, Mr Ngare worked at Stanbic Bank and then for the NIC Bank at various locations such as Tanzania, Uganda, and Kenya.

Ngare’s professional associations have enabled him with diverse experience in management, security, and the telecom industry to apply to his current role.

In this interview with Business Insider Sub-Saharan Africa, Ngare discusses the decisions that inspired Equity Bank to spin-off a fintech company and the events that followed.

Stephany Zoo: Finserve was spun out as an independent subsidiary in August of last year. How was the decision made?

Jack Ngare: Equity believes the faster we respond to the market, the better our performance will be and that we must allow opportunities for organic growth. Three years ago, Finserve started out as a project to speak into the evolving needs of Equity customers across the branch network. Customers wanted banking services but did not necessarily want to visit branches; a project today known as Equitel, a telco for Equity Group customers with great m-banking benefits.

Equitel was very successful, and as Finserve took on more digital projects, for the group and also outside of it, it made sense we would gain more autonomy. Finally, we formed an independent subsidiary last year.

We looked at the opportunity of brick and mortar customers shifting towards the digital platforms. I would not say that the decision to have an independent fintech was easy for the bank, as every new and revolutionary initiative brings with it a lot of risks. However, from my experience as a CTO for Equitel and the leadership and guidance of the Finserve Board we were able to perceive the potential of a fintech.

The decision has already paid off. Within four months, our social, financial apps such as mKey had more than 300,000 downloads. We now have the opportunity to provide services to other banks and financial institutions, which we never could have if we were still focussed on Equity.

Zoo: What drives innovation within in Equity Bank? What kind of impact on the bottom line has innovation substantially made in the bank?

Ngare: Equity is a very customer-centric organisation. The evolving needs and demands of our customers keep us on our toes. We are driven by their needs and aspirations. We also keep abreast of the technological advancements and what opportunities they present in our endeavour to be always ahead. The culture of trying out something new in Finserve first and then putting back it back into the conventional bank has helped us a lot in making prolific strides.

The change in Equity’s focus towards cost savings as well as tailoring services for suiting the African market provided the necessary substrates for innovation. When they see something that works for Finserve, Equity becomes more open to disruption and with every success story, it becomes easier to stay open-minded.

Another impact on the bottom line of the bank due to innovation has been observed clearly in the limitations on procurements from outside markets and focusing solely on the African market. 24% of Kenyan cross border payments are made through our platform. We were also able to switch to a variable cost model from a fixed cost model.

Zoo: What is the relationship between Equity Bank and Finserve now? What do you think is the most difficult part of working together? Do you feel the different entities have very different cultures?

Ngare: There are possibilities for convergence of almost every industry and business with the gradual transition towards digital. The most difficult part of working together is the alignment of cultures and understanding the objectives of change.

While a large bank like Equity is required to take care of a mammoth customer base, small, agile organisations like us are built for dynamism and a mindset for growth. The culture of a large bank could never obviously promote the notion of making mistakes and implementing contingency plans. Banks manage different risks and are regulated differently from fintechs or telcos. Equity bank has over 7,000 employees, while Finserve only has 80 people, with the majority being engineers, developers, and product managers. This means a notable difference in the cultures of the two entities, but we both focus on providing a customer-centric experience to our clients, Equity being one of them.

Stephany Zoo is a contributor for Business Insider Sub-Saharan Africa. Having lived on three continents, she strives to create stories that knit together diverse backgrounds. Entrepreneurial at heart, Stephany founded ecommerce site, and League X, a boutique tech branding firm. She helped launch SAP’s flagship SME product in China, as well as consulted for a number of Chinese SOE’s, including Ping’An and China Telecom. She is currently the Head of Marketing for BitPesa, Pan-Africa’s digital FX and treasury solution. Her passion projects also include Phoenix Risen, a platform to bring men and women together to combat sexual violation, and China Africa Tech Initiative, focusing on accelerating the tech industry as the next era of collaboration between China and Africa.


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