By Steve Mbogo, Business Daily —
Security companies have added their cash in transit fleet numbers and invested in more security features as they prepare to meet higher demand for money transport services when agency banks start operating soon.
The Central Bank released guidelines for agency banking this month, paving the way for banks, microfinance institutions and businesspeople to venture into agency banking.
CBK will licence agency banks 30 days after their application, meaning the first operations could start late July.
Bob Morgan Services (BM) said it had increased its fleet from 31 to 36 vehicles to meet the expected demand.
“We are preparing for more [trips] for our cash in transit vehicles and movement into rural, remote areas,” said Richard Ndege, BM’s sales and marketing manager
Agency banking is expected to see banking services penetrate areas where commercial banks have not reached.
This means cash in transit vehicles will be required to travel to remote areas to pick and drop money from agents.
The reality will further increase the risk profile of cash in transit vehicles, because some terrains are remote and could be used by criminals to attack the vehicles.
The companies said they were therefore investing in armoured vehicles to protect employees in case of ambushes by gangsters.
BM said it had increased its insurance cover per vehicle, to enable a single vehicle to carry maximum limit of Sh100 million from the previous Sh50 million in cash.
The company said it had also set up regional branches to ease the time it takes to service agency banks.
Agency banks will perform functions like cash deposit and withdrawal, payment of salaries, transfer of funds, agent mobile phone banking services among others, according to the CBK.
Saccos and microfinance institutions, expected to be at the fore of agency banking, said they did not foresee new challenges in the way they access money.
However, new entrants who have not been previously involved in high cash transaction services will have a big challenge.
They will be required to make investments to secure their premises and in information technology to facilitate services such as cash transfer.
Security companies said investing in high-end technology in their vehicles will now make sense because the vehicles must be able to “communicate in real time” with the central office all the time, to ease tracking in case of an accident or ambush.
“We are replacing our fleet to make the cash in transit vehicles intelligent,” said Adam Miller, the regional managing director for G4S.
The vehicles will be monitored in real time and will have panic buttons in case of ambush, among other security features.
He said the company is opting for “high capability vehicles” that can withstand heavy gunfire to protect employees in case of attacks.
G4S already has an extensive countrywide network which it said will come in handy in easing access for cash by agency banks.
The company said it was also considering adding personnel to its guarding services.
KK Lodgit, a relatively new entrant in the cash in transit business said it expects the exponential growth it has been experiencing in the last few months to continue and is therefore adding to its fleet.
“Kenya is a cash business society and we expect that to increase when the agency banks start operating. Demand for cash is going to be high,” said Terry Downes, the CEO of KK Lodgit.
The company said it had invested heavily in information communication technologies, including installing all its vehicles with GPRS to enable real time satellite tracking.
Vehicles that divert from the programmed routes will prompt an alert to the control system that triggers the alarm system.
The company earlier announced plans to introduce a smoke box that defaces currency in case of unauthorised tampering.
The box will reduce use of police escorts, which the industry said adds to the cost of transporting money by 33 per cent.
The cost of the intelligent box is estimated at Sh268,000 per unit.
The industry estimates that the chase car and additional driver and at least four police officers are costing the companies approximately Sh120,000 a month.
The boxes have a shelf life of five years.
The security gains, as a result of agency banking, are expected to filter into security equipment vendors who provide electronic surveillance, access restriction and alarm systems.
Kithu Jimlet, the sales director of Omega Technology however warned premise owners to beware of counterfeit security equipment that may malfunction and compromise the security of the money and records held by agency banks.
Kenya does not have guidelines for screening the authenticity of security equipment.
It is estimated that almost half of the CCTV cameras installed by banks and other companies are faulty.
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