As the fight for customers between banks and telecoms continues to grow by the day, banks have realised that the only way to ease the pressure and also stay competitive is to work with telecoms.

This has seen a number of banks integrate their mobile banking operations with the telecom firms’ mobile money platforms.

Market observers say the recent announcement by KCB Rwanda that it had integrated its mobile banking platform with telecom firms’ MTN and Tigo mobile money platforms (with Airtel money coming on board soon) is a clear indication of the bank’s strategy to stay competitive.

Maurice Toroitich, KCB Rwanda managing director, told The New Times in an interview that the move will enable telecom firms’ subscribers to access their bank accounts on one platform, allowing them to transfer cash from their bank accounts to mobile phones and vice versa.

KCB is not alone on the bandwagon, Airtel money and I&M Bank operate a similar arrangement, where airtel money subscribers can withdrawal cash or transact any other business from the bank’s ATMs. Equity Bank Group managing director James Mwangi recently said they were finalising their integration with the three telecoms.

Toroitich said the KCB/MTN partnership is also aimed at ensuring every Rwandan accesses financial services without difficulty. He added that the initiative would enable people use both services in the payment of utility bills.

"Customers will be able to transfer cash from their bank accounts to their mobile accounts to pay for services and goods without having to go to the bank,” he explained.

Tongai Maramba, the Tigo Rwanda general manager, said the banks-telecoms’ integration will strengthen linkages in the financial system.

"This is just the beginning of a bigger programme to give customers what they have always wanted – a seamless system of financial services, where all players in the financial sector are interconnected.” 

Currently, over 3.4 million mobile phone subscribers are registered on the three mobile money platforms; MTN mobile money, Tigo cash and airtel money. The banks want to capitalise on this to introduce new products, boost deposits and expand their customer base.

Banks that haven’t integrated yet with the telecoms money transfer facilities use the orthodox ways of carrying out over the counter cash remittances (as telecoms’ mobile money agents), which takes time and money. Most micro-finance institutions, on the other hand, also act as mobile money agents for the telecoms as they are spread across the country compared to banks.

Faustin Byakunda, managing director of Unguka Bank, a micro-finance bank, said in an earlier interview that working as an agent was one of the ways they use to ease access to financial services. "Many people are still unbanked…As long as we package our services well, we are assured of growth,” he said.

Most rural people prefer mobile money services for their day-to-day transactions, which experts say has pushed banks to rethink their positions.

"I keep my salary on my mobile money account because it is easier for me to use it in case I need to send money to my mother when she is sick,” said Therese Uwimana, a house help in Gikondo, a Kigali suburb.

Minister for Finance Amb Claver Gatete lauded the two sectors for pushing for integration of their services, saying it will ensure more money is retained in the banking system to enable banks lend at lower rates.