Equity Bank Case Study | Modefin

Equity Bank Fuels massive Transformation; migrates 3.5 mn SIM application Tool kit users and brings flexibility, stability and cost savings.


While many of the world’s developed economies are taking huge strides in enabling digital banking services, 65% of the world’s adults in the poorest economies, even today, do not have access to some of the most basic banking facilities such as sending or receiving money quickly and safely.

Some countries in sub-Saharan Africa, such as Kenya, have been innovative and revolutionised digital banking with mobile money accounts like M-Pesa. M-Pesa allows people to conduct money transactions with just regular feature phones that does not compel users to own expensive smartphones for their daily banking needs.

However, Equity Bank, recently awarded the Best Bank in Africa award for 2020, realized that increasing customer acquisition and serving the underserved and unbanked meant that they needed to leverage the power of digital banking. Customers needed to experience benefits like free money transfers, access to credit and insurance in a safe, convenient and transparent manner. Equity Bank couldn’t wait for the customer to come to the bank. They decided to go where the customer was.

STKs – the smart way to bank

72% of Kenyans possess a mobile money account. To bring more Kenyans under the banking umbrella, Equity Bank partnered with Airtel, Kenya, the mobile phone services provider to come up with Equitel and offer digital financial services by way of STKs to its customers. SIM Application Toolkit or STK enables the SIM card to initiate actions for various value-added services, banking being one of them.

Equity Bank tasted phenomenal success with STKs. However:

their existing system was not capable of exposing the APIs to process the transactions.
Equity Bank was dealing with several fintech vendors providing piecemeal services that proved to be time-consuming and expensive
the vendor was unable to provide the flexibility, stability or security that was essential to conduct banking transactions on the phone

The Challenge

Modefin was challenged to migrate approx. 4 million STKs into their mobile banking platform in less than 20 days.

PIN authentication had to be performed without a glitch.

Customer services had to be managed with minimum downtime and no outages.

The platform had to be tested for stability and security and had to run seamlessly without any errors and bugs.

The Approach

Modefin exposed the API for changes that would take place on the STK.

Modefin built an adapter specific to STK processing so that integration files could be reused later for USSD or Mobile API.

During migration, PIN migration was critical and Modefin worked closely with HSM SME for seamless authorization and migration to the Modefin platform on the fly.

Initial performance hiccups which occurred due to the load was fine-tuned overnight and stabilized within a few hours.

The Benefits

High RoI and business impact.

  • The mobile banking platform is what Equity Group CEO James Mwangi describes as a “massive transformation” to a digital bank.
  • More than two-thirds of all Equity Bank loan transactions carried out in 2015 were processed via Equitel.
  • Transactions at the counter and at ATMs are beginning to “shrink significantly” as many retail clients switch to the mobile platform.
  • This decongestion in banking halls is also having an impact on employee expenses – 660 staff exited the bank last year and a further 5% shrinkage in staff costs is expected in 2016.
  • Equitel became the second biggest mobile-money transfer service to register around 2 million daily transactions with just about 4.2% of the mobile-money subscriber base

In 2011 the branches were doing annually 28 million transactions. Despite the growth of customers from 4 million then to 10.1 million today, the branches have only dealt with 23.8 million transactions [in 2015],” says Mwangi. “ATMs, which used to deal with 34 million transactions, has gradually been declining and now we are at 30 million transactions. We are on the verge of a turning point where we start slowly retiring the physical infrastructure.

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