How Informed is the Bank Customer about the new law?

By September 16, 2016 March 19th, 2019 Evolve Insights

As it appeared in the Daily Nation on Sept 7th 2016


As customers, we have expectations. One of our key expectations is that we will be kept informed. An informed customer is without doubt a happy customer. As customers, we get informed through various channels. Sometimes we get a call, an SMS, an email, a letter or we come across a notice in the papers or an advert on television or even a post on social media. For example when a 10% excise duty on bank charges was introduced, I received several notifications. Occasionally I also get an SMS from my bank indicating that I qualify to borrow. Unfortunately, the SMS notification does not indicate the interest rate or other fees applicable. In addition, when I enrolled for mobile banking, I did not receive a notification on what the charges would be. This made me wonder why banks are selective in sharing information with customers. Why is some information not always so readily available?

After the new banking law was enacted last week, my expectation for information grew.  I expected that my bank would let me know what the new law means to me their customer. I expected that at least they would share some insights via social media where the discussion was alive. I expected that they would get out all the legalese and politics in the new law, clarify the details and share the information in simple terms.  What benefits does the new law present? What does ‘not more than 4% above the base rate’ on loans mean? Will this affect the old loans? What does ‘at least 70% of base rate’ on deposits mean? What deposits will earn interest? How are banks in countries where interest rates are capped managing? Will it be better or worse for me the customers? I was looking for answers to these simple questions.

Anything new and contentious attracts lots of attention. There had been so much hullaballoo about the new law. As I followed the discussions online, I noticed an initial statement from the Kenya Bankers Association after the signing into law. A little later, one bank had joined in the conversation. It tweeted a statement from their CEO mentioning its intention to comply with the new law.  Other banks remained quiet. On day two there was little if any official communication from banks. Social media was abuzz with unconfirmed information on suspension of lending. This made me wonder whether statements such as “our customers are important to us” “we value our customers” “we put our customers first” “we care” “we are here for you” are just but lip service. Conversely, could it be that customers needed no urgent communication on the new law? My curiosity led me to reading through the new law, what stood out was the need for full disclosure of all information to lenders.

Many of us are aware that businesses exist to make profits and increase shareholder wealth. This wealth is created when customers transact. In case of banks, customers are considered as either borrowers or depositors. Bank customers pay transaction charges; they also pay interest on borrowings and overdrafts. Without customers banks would not exists. Keeping customers informed is both for the good of the banks and the customer. Maybe an SMS, an email, or a letter is on the way, just maybe!

Lucy Kiruthu is a Management Consultant and Trainer and can be reached on or via twitter @kiruthulucy

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