Barclays Bank of Kenya has predicted that the costs of banking services is likely to go up in the near future because of increased regulations.
The bank said in its annual report “Trust is the most important asset for any bank. The Kenyan banking industry finds itself—although well intended—in a potential over regulation cycle.”
With over a century’s industry presence in Kenya, the bank said that the sector might face more regulations this year for various reasons. “In 2019, we are likely to see more laws being implemented in banking, likely making operations more complex to manage and banking services more costly,” it said in the report.
Banks in Kenya are subject to scrutiny supported by new regulations under the rule of Central Bank of Kenya Governor Patrick Njoroge, Business Daily Africa said.
According to Barclays, some of the regulations introduced recently appear to overlap in terms of ‘intent and requirement’, the media report said. For example, over five new regulations introduced last year have complicated the banking landscape in Kenya. Some of the regulatory themes last year included consumer protection, data privacy, and cybersecurity.
However, the bank emphasised that stern regulation is key to ensure that the banking sector maintains standards which can prevent financial crimes.
“We welcome the need to make the industry safe and sound. Thus, we support the regulators and will continue to collaborate as the regulatory regime evolves,” the bank said.
The recent 2019 East Africa CEO report said that concerns such as operations risks and cybersecurity threats are followed by the changing regulatory conditions—the third biggest concern for the sector.