The current times have placed a priority on digitalization by offering cost savings, faster service delivery and enhanced security of data, processes and funds.
The most important reason for SACCOs to digitize their operations is to ensure that their members receive efficient, convenient, and secure service. Securing their funds through access controls and a centralized platform that is robustly protected is more preferable, even essential.
With the current cessation of movement to rein in the spread of COVID-19, the payment industry and the banking sector have been forced to adopt social distancing measures thus technology adoption to accommodate changing client circumstances is essential. In these tumultuous times, SACCOs must understand their members’ evolving demands and deliver innovative services that meet those needs. SACCOs should focus on members’ touch points, as well as digitized customer experiences such as cross-channel capabilities and self-service portals.
The COVID-19 pandemic has prompted a digital “race to the bottom,” with SACCOs that can serve clients remotely being the most resilient both during and after the outbreak. Loan applications, member communications, and customer intelligence are some of the areas where traditional SACCOs are in desperate need of digital solutions.
“To apply for loans, members must come into the office to fill out physical documents — a barrier during COVID,” one manager in a hawker’s SACCO in Murang’a County explained. The members of the SACCO were required to first visit the office to apply for a loan. A credit officer then evaluates the loan, and the guarantor stated on the application is verified and notified by phone. Even among other SACCOs in the area that have automated some aspects of loan approval, the procedure of supplying paperwork and identifying guarantors was still entirely manual.
The hawker’s SACCO had to ask its members to fill up loan application forms, scan them, and submit them to loan officers, or send paper copies via motorcycle messengers, to keep business running during the pandemic. The management recognized the need for a digital solution because the procedure was inefficient and error-prone.
Communication with members is another area of possible digital enhancement. To disseminate information about products and procedures, traditional SACCOs previously relied on actual meetings with members at either branches or head offices. According to the hawker’s SACCO CEO, the communication was one-way, where only the members got their messages. If a member had an enquiry, they had to call the customer service line without a guarantee it will be answered due to high call volumes.
Additionally, customer intelligence is a possible digital growth area to be able to track potential leads, member enquiries, and analytics on inactive vs. active accounts. Most SACCOs are unable to view all of a customer’s information in one location or to aggregate customer data. Much of this data is now spread across multiple systems and record-keeping processes, making it difficult for SACCOs to see how everything goes together. An advanced and robust digital platform can integrate all the data and processes for easier access.
Finally, if 2020 has shown us anything, it is that in the event of an unpredictable event like the Covid-19 pandemic, digitization is the key to maintaining service delivery in a safe and efficient manner. A single digital platform for all loan processing, communication and customer intelligence capabilities accessible from absolutely anywhere sounds like just the right step towards digital progression in this modern era.
SACCOs have long been seen as a symbol of trust and assurance when it comes to providing financial assistance to many millions of people all around the world. With the pandemic forcing people to remain indoors and maintain social distance, it was only a matter of time before SACCOs underwent this digital revolution.
Automated SACCOs are very essential since they help ensure transparency and that the data is easily accessible. Aside from that, SACCOs offering digitized services will be better prepared to welcome the current generation which leverages financial inclusion.