Kenya: MFIs to benefit from cheap banking system
By Lola Okulo, The Star
Microfinance institutions will soon find it easier to speed up transactions and stem fraud in transfers following launch of a cheaper core banking software system. Swiss software firm Sofgen has reduced costs of installing the core banking system known as Temenos for small firms in the financial services industry by having it on a shared cloud platform.
Temenos T24 is the most widely used banking software system in the world whose functions include cash transactions and loan simulation among others for retail banking, valuations and portfolio management in the case of private wealth management. For treasury operations, the system’s functions include orex and confirmation matching.
The software company known as Sofgen said the Temenos T24 cloud platform is meant to offer local small and medium banks and microfinance institutions a secure core banking system on a shared model accessed via a pay-per-use model. “Microfinance institutions are faced with increased cases of fraud due to their non-robust IT systems and infrastructure,” noted Sofgen’s Africa CEO Tunde Oladele
“This can be mitigated against with the use of the Temenos T24 cloud-based software which is available more cost effectively on a subscription basis with the charges being made depending on the number of accounts and clients.”
The Temenos T24 cloud-based banking software solution, added Oladele, is comparatively cheaper as no operational expenditure and annual license fees to maintain and support continuous investment are required from the client, with the only charges being the annual subscription and on-boarding fees.
A recent research by Deloitte East Africa indicating that East African banks lost Sh4.05 billion to fraud in the last 18 months, mainly through insider collusion through system manipulation. Alexandar Dembitz, Sofgen Group chairman said lax standard within countries’ banking systems and infrastructure provided loopholes for fraud and money laundering to rise and thrive.
The Tenemos T24 system is the one used by major banks like Kenya Commercial Bank to link all its branches in and outside Kenya for a seamless service to customers. MFIs in the country usually use the bankers realm core microfinance solution sofware, a product of Craft Silicon company.