What going digital means for banks, customers
Mobile and agency banking are changing the economics of financial inclusion in Uganda, enabling banks to reach customers that traditional branch-based models have struggled to serve.
Christopher Kabagambe is the CEO of ABC Capital Bank. (Courtesy)
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Christopher Kabagambe is the CEO of ABC Capital Bank. He spoke to the New Vision on how digital innovation and adoption are reshaping access to financial services. Below are excerpts.
1. Digital innovation is reshaping banking across Africa. How significant is that shift in the Ugandan context specifically?
It's significant because Uganda still has large segments of the population, particularly outside Kampala, that branch-based banking has struggled to reach economically. Mobile and agency banking change that equation by lowering the cost of reaching a customer, which makes previously uneconomical segments viable to serve. Having led a digital-only neobank as well as more traditional institutions, I've seen firsthand how much faster digital channels can extend reach compared to physical branch expansion, provided the underlying infrastructure and trust are in place.
2. Who are the customers being left behind by traditional banking models, and how do digital channels change that?\
The customers who get left out are usually SMEs, youth, women entrepreneurs, and people outside Kampala; branch banking was never really built with them in mind, mostly on cost grounds. What digital does is change the economics: simplifying how customers open accounts and transact, and building out mobile and agency channels, brings the cost of serving those customers down to a level where it makes sense for a bank to bother. We're not chasing a single leap to a fully digital model, though. Trust and usability have to grow at the same pace as the technology, so it's a phased build, not a switch we flip overnight.
3. Financial literacy is often cited as a barrier to inclusion. How does that intersect with the push toward digital banking?
It's a real constraint, and digital adoption doesn't solve it on its own. If anything, it raises the stakes. A customer now needs to understand not just how to save or borrow, but how to do that safely through a mobile or agency channel. Closing that gap takes deliberate investment in customer education alongside the technology rollout, not as an afterthought once the channel is already live.
4. As banks digitise, concerns grow around fraud and cybersecurity. How should banks manage that risk while still expanding access?
Customer trust and security have to sit at the centre of any digital expansion, not get added on afterwards. As we build out channels, that means fraud monitoring, cybersecurity controls, staff training and stronger internal controls growing at the same pace as the channels themselves. I'd also say technology should support the relationship with a customer, not replace it; particularly for someone using a digital channel for the first time, having a person to call still matters.
A large one. Much of Uganda's underserved population is engaged in agriculture, trade or small business. Digital tools such as mobile-enabled savings and credit products and digital trade finance can connect farmers and agribusinesses to formal financial services, in some cases for the first time.
7. How does ESG factor into decisions about digital expansion and who banks choose to serve?
It's becoming part of how we make decisions, rather than something we tack on afterwards. That shows up in our lending decisions, in governance, and in how we engage the communities we serve, with particular attention to financing that supports agribusiness, SMEs, job creation and responsible enterprise growth as digital channels put more of the country within reach.
8. What does regulatory oversight look like as digital banking scales up in Uganda?
It has to keep pace with how fast digital adoption is moving. We stay in close contact with Bank of Uganda and with our technology partners on compliance and data protection, because the moment oversight falls behind adoption, the risks start to outweigh the benefits for the customer.
9. You clearly follow the wider global conversation on this. What ideas out there do you think are genuinely implementable in Uganda today
A good friend of mine, Emmanuel Daniel, has been a useful sounding board on this. He's a USA/China/Singapore-based fintech thought leader, twice named among the top 10 global influencers on the Fintech Power50 list in 2021 and 2022, and he tends to push people to think a step ahead of where the industry currently sits.
10. Three of his ideas strike me as genuinely useful for Uganda, not just interesting in theory.
The first is building for AI agents, not just apps. His view is that customers will increasingly use their own AI assistants to negotiate with a bank's systems on their behalf, rather than tapping through an app themselves. If that's coming, banks and telcos here need to start opening up their APIs now, so that whatever AI assistant a customer is using in a few years can actually transact on their behalf, instead of the industry scrambling to catch up later.
The third is using real-time behaviour data for credit decisions, rather than relying purely on old bank records. Mobile money and airtime usage patterns say a lot about a person's cash flow and reliability, even if they've never held a bank account, and some Ugandan fintechs are already piloting exactly that.
Of those three, I'd put full mobile money interoperability, cheaper remittance corridors and bundling financial services into a single app in the near-term, achievable category.
Agentic AI banking and a central bank digital currency pilot are the longer-term, higher-risk plays; worth watching closely, but not mainstream-ready yet, here or anywhere else.
11. Beyond the ideas you're borrowing from elsewhere, what's already happening here in Uganda that gives you confidence?
Quite a lot, actually.
Bank of Uganda is working on what it calls the National Payment Switch, a single platform meant to connect banks, mobile money operators, fintechs and merchants, so money can move between all of them without the friction we've lived with for years. That's a serious piece of national financial infrastructure, and it's moving.
Mobile money itself has become the backbone of how Ugandans move money day to day. We're talking about tens of millions of wallets and hundreds of trillions of shillings passing through mobile money and the RTGS system every year. Interoperability between the mobile money networks is already live, so a customer on one network can send money to a customer on another without going through an agent twice. Regionally, there's real movement too. East Africa is pushing ahead on cross-border payment rails, through frameworks like the East African Payment System and COMESA's regional settlement system, so that moving money between Uganda, Kenya, Rwanda and beyond gets cheaper and faster, not just within our own borders.
As a bank connected to a regional group, that's something we watch closely and want to be part of. What encourages me is that none of this is speculative; it's already underway. The job now is making sure banks like ours plug properly into that infrastructure, rather than building parallel systems that don't talk to each other.
12. Where do you see digital-led financial inclusion in Uganda headed over the next few years?
Toward mobile and agency banking becoming the front door for most new customers, especially SMEs, youth, women entrepreneurs, and rural customers, with a person still reachable behind that door when they need one. Getting there isn't about rushing; it's a deliberate build, and it only works if the fraud controls, the cybersecurity and the financial literacy work keep growing alongside it.