How SACCOs Operating Without Core Banking System Are Losing Money

How SACCOs Operating Without A Core Banking System Are Losing Money.

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How SACCOs Operating Without Core Banking System Are Losing Money.

As a SACCO executive, I bet you have realized the importance of a core banking system.

If not, you should learn more about the benefits of digitization to SACCOs.

The center point of SACCO automation is the adoption of a modern and reliable core banking system. Keep reading to learn about how your SACCO is losing revenues operating without a core banking system.


Consequences of poor customer service

CBS is known for providing convenient services to SACCO members as one of their biggest benefits.

SACCOs with manual operations, most likely have very poor and inconvenient service delivery to their members.

Of course, if I put myself in the members’ shoes, I will definitely look for a better and convenient means to access funds.

Many SACCOs end up losing sales (in form of member transactions) because they offer poor services. This situation forces their members to access funds from mobile lending apps ending up dissolving their membership in the SACCO.


High Costs of IT Maintenance

First of all, a core banking system is very different from an ERP.

Any financial services institution needs a core banking system to better service delivery and operation.

It has been a common phenomenon whereby SACCOs use ERP systems in place of the core banking solution. This results in a lot of customizations and maintenance to fit into the SACCOs processes. All these activities end up costing the SACCO a lot of unbudgeted money.

In short, you should use the right system for the right operations in the SACCO.


Human Errors

Man is prone to errors.

Some errors may come at a very high price.

Working with a core banking system eliminates human errors because it automates the whole process.

This is one way how core banking systems help SACCOs save huge amounts of losses.


Fraudulent Activities

Many SACCOs have suffered at the hands of fraudsters.

Most of these incidences occur in SACCOs that operate manually or use unfit systems to run their operations.

This happens because there is a lack of an electronic audit trail, which is a huge risk to the SACCO.

An electronic audit trail helps trace the whole activities conducted in the SACCO and identifies those who participated at the various levels.

Learn more about how you can use a good core banking system to prevent fraudulent activities in the SACCO.


Risks of not being compliant

All SACCOs are bound to be compliant with their regulators’ guidelines.

For instance, in Kenya, SACCOs should adhere to the guidelines provided by Sacco Societies Regulatory Authority (SASRA).

SACCOs in Kenya can benefit a lot when they use systems that have automated SASRA reports. This helps them stay compliant and on track with changing regulations over time.


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