East Africa's financial services industry is set for a new push as KCB Group PLC readies to acquire a 75 percent stake in fintech innovator Riverbank Solutions Ltd. 

The deal, which is subject to regulatory approval from the Central Bank, is part of the regional lender's strategic push to expand its digital financial services offering across East Africa.

This acquisition will see KCB tap into Riverbank's established expertise in three critical areas of digital finance. The fintech's Swipe platform offers agency banking services, while its CheckSmart solution facilitates social payments. Additionally, Riverbank's Zed 360 platform provides business management tools that will enable KCB to offer enhanced services to its SME and MSME clients.

Through Zed 360, KCB's business customers will gain access to a wide range of operational tools including inventory management systems, financial reporting capabilities, and payroll processing solutions.

These integrations are poised to streamline financial operations for small and medium enterprises while providing the bank with greater visibility into its clients' financial ecosystems.

Riverbank's additional offering, the Zizi platform for revenue collection, further complements KCB's existing services. Upon completion of the transaction, Riverbank will operate as a subsidiary of KCB Group PLC, marking another milestone in the bank's digital transformation journey.

The move comes as regional banks increasingly recognize the need to either build or buy digital capabilities to remain competitive in a market where consumers and businesses alike are demanding more sophisticated, accessible financial services. 

“We are actualizing new digital capabilities to deliver customer-centred value propositions through technology to guarantee seamless, reliable, secure, and innovative solutions for our customers," said KCB Group CEO Paul Russo. 

He added, "Across the region, payments are expected to have the fastest growth, suggesting an opportunity to innovate. That’s why we have made this strategic acquisition to enable us offer a full stack of solutions. This is a great opportunity to maximize value for our shareholders in the long-term while strengthening the competitive position for the Group."

“Riverbank is not new to us as they have been providing us with Agency Banking Solution since 2013. Additionally, we see true value in the Zed 360 platform under which we expect to step up the delivery of our value proposition to MSMEs as well as in harnessing the ecosystem banking,” Russo explained.

The acquisition is part of an ongoing strategy by KCB to increase innovation of digital MSME offerings, focusing on seamless transaction and payment services, instant digitized lending, provision of business management tools and offering non-banking solutions such as business training and marketplace presence for our customers. 

The transaction will help the Group accelerate its strategy to interconnect with partner platforms and fintechs to offer services such as virtual wallets and payment APIs. This will see KCB consolidate its agent banking channels into one platform.

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