Banks are pressured from other financial institutions to provide a wide range of financial services
to their customers. Banks also profit from handling financial transactions, both by charging fees
to one or more participants in a transaction and by investing the funds they hold between the
time of deposit and the time of withdrawal, also known as the “spread”. With more financial
transactions being processed by their central computer systems, banks are also concerned about
the security of the system, in particular with the unwarranted access to their accounts. In
addition, individuals are also concerned with the secrecy of their personal information. A big
percentage of Kenyans poled expressed concern over privacy of computerized data. As more
people are exposed to the information superhighway, privacy of information and the security that
goes hand and hand with this information is crucial to the growth of electronic transactions.
To add further convenience to the customers, many banking institutions are working together to
form an integrated system such as Deposit Protection Fund Board (DPFB), Kenyan Bankers
Association, and Kenya Credit Providers Association. In addition, the Association in
collaboration with Central Bank of Kenya established the Kenya Credit Information Sharing
Initiative (KCISI) in August 2009. This unit operates under the ambit of the Association to
coordinate the efforts of members to share credit information through Credit Reference Bureaus
licensed by the Central Bank. Formal exchange of credit data among banks commenced with
effect from August 2010. Through this initiative, the Association hopes to ensure that lenders
make use of vital information on their debtors to differentiate between low and high risk
borrowers. This will enhance credit risk management and eventually lead to granting of more
favorable terms to low risk customers.
