Robin Bairstow, the new chief executive officer of I&M bank Uganda, is looking at leveraging on technology to improve the bank’s digital banking services as one of the ways of making the lender a top player in Uganda’s financial sector.
During an interface with the media recently, Bairstow acknowledged and emphasized that the banking industry is rapidly becoming digital, and clients expect a credible level of convenience and accessibility to create an improved customer-centric experience. He revealed that some customers had abandoned the bank’s digital banking system due to its unreliability.
However, with the new system they are about to launch into the market, it will give them an opportunity to bring back these customers as well as attract new ones.
“We have a new banking system that is in the sunset phase. Instead of upgrading the existing system we have, we are going to operate with the same system that is used across our network in four other countries. We have done a significant amount of work on this system, which will include a new online banking system. It will be launched at the end of January 2024,” Bairstow said.
Bairstow explained that the system is so flexible and allows direct connection into inter-payment systems and the national database through application programming interfaces (APIs).
With a number of banks in Uganda reporting several incidents of cyber-attacks, and customers always complaining of losing their savings under unclear circumstances, Bairstow says that digital security starts at the industry and central bank level because keeping a client’s money or assets safe is the primary goal of a bank.
“Digital transformation has a catalogue of benefits despite security remaining a threat. It is, therefore, up to banks to provide clients with secure banking experiences that enable them access their financial data without fear, and conduct transactions with ease because digital transformation with trusted security systems will only take Uganda’s banking industry places.”
Furthermore, as part of its digital transformation efforts, the bank is partnering with MasterCard, a global leader in digital payments and technology, to provide a new range of I&M cards, namely the I&M Standard Debit Mastercard, I&M World Debit Mastercard and I&M World Elite Debit.
This partnership is expected to drive financial inclusion as well as provide secure and convenient banking experiences to customers. I&M bank launched its operations in Uganda in 2021, following the acquisition of Orient bank by I&M Group PLC. The bank has operations in Kenya, Rwanda, Tanzania and Mauritius.
By the time of the acquisition, Orient bank had recorded a Shs 22.6bn loss in 2020, up from Shs 1bn the previous year, with the bank’s administrative costs shooting up by Shs 12.8bn to Shs 38bn during the same period.
Bairstow explained that the poor performance of the bank in recent years was based on non-performing loans (NPLs), which stood at a ratio of 13.02 percent in 2022. This is after the bank’s NPLs increased to Shs 30.49bn in 2022, up from Shs 3.52bn in 2021. This was against Shs 234.07bn in loans lent out to customers in 2022.
“Our duty is to serve customers and generate revenue for our shareholders. So, obviously the shareholders are keen to see a return on investment. The bank has had to go through a period of resetting the balance sheets and costs, and at one stage, our cost-to-income ratio was over 100 per cent. This meant that it was costing the shareholders more money than we made, for which they were not happy. But based on the launchpad of reorganization and rebranding, we are now looking at growing ahead of the market over the next three years,” said Bairstow.
He added: “We want an annual growth rate of close to 250 per cent on the profit level. That is on the back of new products, fees, income and asset liability growth. The reason why we are confident is that we saw the same type of growth coming from other markets. So, we have set a good base. At one point we were at 16 per cent non-performing loan ratio but we have now brought that down to three per cent.”
Bairstow joined I&M Bank Uganda in August this year after serving as CEO of I&M Bank Rwanda from 2015 to June 2023, where he trebled the bank’s total assets on top of getting it listed on the Rwanda Stock Exchange in 2017.