I&M Bank Rwanda opened its doors for the first time in May 1963 as the first financial institution in Rwanda. Since that time, as the country and the needs of the market have changed, so has the business. The Bank now serves three key segments; Retail for Individuals, Corporate and Institutional Banking as well Business Banking. The Services offered range from Advisory, Business Facilities, Forex trading, Mortgage financing, Transfer and Remittances, Electronic Banking, Digital Payment solutions and so much more.
I&M Bank Rwanda is a leader in innovation and is the bank of choice for Coffee, Tea, Minerals, Power, Telecoms, Institutions, and Diplomatic representations in Rwanda. Extensive development work with Small and Medium Enterprises has been made possible through partnerships with Development Finance Institutions (DFIs) to offer quarterly Financial Literacy Workshops and lines of credit.
I&M Bank Rwanda is a subsidiary of I&M Bank Holdings. The Bank’s branch network in Rwanda includes 17 outlets and 26 ATMs. We are also present in Kenya, Tanzania and Mauritius (as Bank One)
Over the last five years, the Bank has leveraged on technology to introduce new products and services into the market including Transactional Banking Services, m-Visa payments, Visa cards (Credit, Debit and Prepaid), integrations with Mobile Network Operators to support Bank-to-Mobile wallet transactions, and e-Tax.
We refined the organizational structure to drive a sales focus under the differentiated Business Units. These have supported customer relationship management both at individual account level to regional levels. The structure ensures that the sales units maintain linkages into the internal control functions such as Operations or Risk Management.
In the Payments space, in 2014, we introduced VISA payments cards, which are accepted globally, this resulted in a 800% increase in number of card transactions in just 2 years. In the same year, we went on to roll out mVISA, a mobile payments solution that allowed for person-to-person, as well as bulk payments.
As a business, we have been intentional in growing revenues and managing expenses which allowed us to maintain positive cost to income JAWS of 5% pa.
Investment in our ATM infrastructure over the last few years has resulted in best in class ATM uptime.
Focused heavily on staff training and career development and we now boast of the lowest staff turnover in the industry at 4.5%
Industry Recognition. Over the last 5 years, I&M Bank Rwanda has been the recipient of several awards including. Best Bank in Rwanda by Global Finance in 2017, Bank of the Year Rwanda by the Banker Magazine (2006, 2007 and 2013), Best Customer Service Bank Rwanda (2016) Bank of The Year from the Mining Industry in 2015 and numerous awards from Rwanda Revenue Authority for Tax Compliance.
Our target over the next five years will be in improving our distribution channels to this end, key investment has been made towards a new core banking system and reporting tool that will result in operational efficiency and provide us with a mechanism for predicting and meeting customer needs.
We shall continue to enhance our Digital Banking offerings and this will also usher in more products and allow for tailored solution for specific customer needs. In line with that, we are also launching Agency Banking as a solution for more financial inclusion across the country.
Other key investments will include improving our Service provision; we have already introduced a complaints management system and are in an ongoing staff customer service training. We are also expanding our ATM network, and looking at changing how people transact through the introduction of smart branches in the next few years.
At I&M Bank, customer feedback is a strong component in our product development process. Following customer insights from our last Account Opening Campaign, we were able to identify opportunities and as a result, this year, we launched three new Products; A young saver’s account for minor, a Malaika women’s account and a FuturePro account for students. Over and above that, we also adjusted some of our existing offering to allow more people to take up the products, which we believe is going to be key in supporting access to financial services in Rwanda.
A quarter of banking customers noted an improvement in customer service over lockdown, research shows
SAS research reveals that banks offered an improved customer experience during lockdown
This represents some good news for banks in an extremely challenging time, with 59% of customers also saying they’d pay more to buy or use products and services from any company that provided them with a good customer experience over lockdown.
The improvement in customer experience also coincides with a rise in the number of digital customers. Since the pandemic started, the number of banking customers using a digital service or app has grown by 11%, adding to an existing 58% who were already digital customers. Over half (53%) of new users plan to continue using these digital services permanently moving forward.
Brian Holden, Director, Financial Services at SAS UK & Ireland, said:
“It’s notable that in times of need customers value being able to communicate with their bank and place an even higher value on good customer service. A rise in the number of digital customers means banks can now reach a wider audience online, leveraging AI and analytics to offer a more personalised experience.
“There is work to be done, though. Even greater personalisation is needed if banks are to win over the 12% of customers who felt banking services deteriorated over lockdown. And this personalisation will need to get right down to a segment of one to properly reflect the unique circumstances some individuals now find themselves in due to the pandemic.”
While the number of digital users grew over lockdown, there is still a quarter (24%) of the banking customer base that have chosen not to make the switch to digital services.
Meanwhile, failure to offer a consistently satisfactory customer experience could prove costly for banks, with a third (33%) of customers claiming that they would ditch a company after just one poor experience. This number jumps to 90% for between one and five poor examples of customer service, so this just underlines how much retail banks can win or lose in these difficult times.
For more insight into how other industries across EMEA performed during lockdown, download the full report: Experience 2030: Has COVID-19 created a new kind of customer?
Swedish Bank Stress Tests in Line with Recent Rating Actions
The Swedish Financial Supervisory Authority’s (FSA) latest stress test results show major Swedish banks’ robust ability to absorb credit losses. The results support Fitch Ratings’ view that short-term risks have abated in recent months, and are in line with Fitch’s assessment of major Swedish banks’ capitalisation at ‘aa-‘, which was a factor when Fitch removed the ratings of Handelsbanken, Nordea (not covered by the FSA’s stress test) and SEB from Rating Watch Negative in September.
The FSA estimated about SEK130 billion of credit losses over 2020-2022 for the three largest banks (Swedbank, Handelsbanken and SEB) under its stress test. This represents about 220bp of their loans, or about 70bp annually. However, the banks’ pre-impairment profitability in the stress test could absorb credit losses of up to about 110bp of loans annually. Fitch’s baseline expectation is for credit losses below 20bp of loans in 2020 and 8bp-12bp in 2021.
Capital remained strong under the stress test. The average common equity Tier 1 (CET1) ratio fell by only 2.8pp (1.9pp if banks did not pay dividends) from 17.6% at end-June 2020. The capital decline was not driven by credit losses, which could be absorbed by pre-impairment profitability, but by risk-weighted asset inflation.
The three banks’ 3Q20 results showed that capital has been resilient despite the coronavirus crisis. The banks had a CET1 capital surplus over regulatory minimums, including buffers, of almost SEK100 billion (excluding about SEK33 billion earmarked for dividends). SEB had a CET1 ratio of 19.4% at end-September, Handelsbanken’s was 17.8% and Swedbank’s 16.8%.
The SEK130 billion credit losses under the latest stress test are lower than under the FSA’s spring 2020 stress test (SEK145 billion), which also covered a shorter period of two years. However, they are still larger than the actual losses incurred by the three banks during the 2008-2010 crisis. This is despite tightened underwriting standards by the three banks in recent years, including, in the case of SEB and Swedbank, in the Baltics, the source of most of their loan impairment charges in the previous crisis.
In its baseline economic forecasts, the FSA assumes a harsher shock to Sweden’s GDP in 2020 and 2021 (-6.9% and 1%, respectively) than Fitch’s baseline (-4% and 3.4%), although it assumes a similar recovery by end-2022. It also assumes real estate price corrections, which appears particularly conservative in light of a 11% housing property price increase over January to November 2020.
The ratings of Handelsbanken (AA), Nordea (AA-) and SEB (AA-) are on Negative Outlook due to medium-term risks to our baseline scenario. The rating of Swedbank (A+) is on Stable Outlook, reflecting significant headroom at the current rating level following a one-notch downgrade in April due to shortcomings in anti-money laundering risk controls.
Future success for banks will be driven by balancing physical and digital services
Digital acceleration due to COVID-19 has not eliminated the need for bank branches
Faster service (23%), smaller queues (26%) and longer opening hours (31%) are among customers’ biggest asks of their bank branch, new research from Diebold Nixdorf today reveals. But with 41% consumers saying they would be comfortable to engage with all banking services via an app, it is vital that banks respond to the full spectrum of customer needs – balancing and evolving their offerings on multiple fronts.
A third (35%) of customers say they will always want access to physical, in-branch banking services in some capacity and one in ten (10%) consumers will never bank predominantly online in the future. This demonstrates that there remains an important role for the services a branch provides. This role, however, continues to shift away from purely transactional banking:
A quarter (26%) value face-to-face advice when it comes to their banking needs
One in five (18%) seek advice on different products
17% want to speak to the staff or other customers.
Matt Phillips, Diebold Nixdorf vice president, head of financial services UK & Ireland, said: “The majority of banks have spent the last decade focusing on their digital strategies and investing in improving – or establishing – their online customer experience. However, the data shows that there is still an essential role for physical branches. Banks now increasingly face the challenge of continuing to provide customers with access to a range of physical and as well as digital services, giving them the flexibility to choose the best service for them at any given moment in time.”
When looking beyond the impact of COVID-19, planned branch visits by customers are expected to rebound to 28%, following a dip to 11% during lockdown. And when asked about the new services they’d like to see inside their bank, sixteen percent of respondents said more self-service machines would improve their in-branch experience.
Matt Phillips continues: “In a world that is fast evolving and where the future is digital, there’s no doubt that high street banks must, and are, responding to the needs of highly digital customers. But not every customer requirement is digital. There is still a strong need for physical bank branches and the interaction and services they offer, and striking this balance between physical and digital is where the industry must come together to provide solutions. For example, building a strong, leave-behind strategy is something we’re seeing across the board when banks have to close branches, ensuring customers have access to self-service machines to complete all their transactional needs.”
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