Convergence as a competitive strategy (a case study of equity bank Kenya)

Abstract

In today’s dynamic business environment, mobile devices have become instrumental particularly in availing of various innovative business solutions. Convergence from the banking perspective is a strategy whereby the bank designs or enhances an existing product by availing it on the platform of a network provider whose core business is unrelated to banking. It is necessitated by the prevailing technological advancement and stiff competition from alternate payment services provided by non-banks. It is thus a means to adapt to changing industry environment. The aim of this study was to establish ways in which Equity Bank uses convergence with the various mobile solution providers to gain competitive advantage in the banking sector. A case study was used and data collected through personal interviews using a guide. Data was also obtained from the organization’s intranet, reports and other documents and analyzed using content analysis. The study established that convergence has been a successful strategy as it has allowed differentiation, grown the revenues and customer base as well as complementing the bank’s agency model which is the latest competitive strategy that is being advanced to the market. In conclusion the objective of the study was achieved and it is evident that convergence provides a sustainable competitive edge for the bank in the highly competitive and changing banking industry in Kenya. It is therefore recommended that this strategy be intensely applied at the Strategic Business Unit level as some of the convergent solutions were not performing as well as others and had various challenges attached to them