In a recent development, Kenya’s largest bank has successfully moved its IT infrastructure to a tier III data center operated by iColo. This migration from an on-premise setup to iColo’s facilities in Nairobi was initiated in 2022 as a cost-controlling measure. The shift was driven by the significant expenses the bank incurred in managing its in-house data center, particularly in power, cooling, and uptime.
The move to colocation allows KCB to leverage shared services and infrastructure, potentially leading to cost savings. Although specific figures on the projected savings have not been disclosed, the transition to a professionally managed colocation facility is seen as a strategic decision for the bank.
Colocation data centers offer a cost-effective alternative to building and maintaining independent facilities, enabling companies to benefit from economies of scale through shared resources. This approach has been embraced not only by KCB but also by other Kenyan banks like Equity Bank and NCBA, indicating a growing trend in the local banking sector.
Additionally, there is a shift towards upgrading core banking applications among Kenyan banks, with a focus on enhancing digital banking services. While some banks have migrated to new core platforms, others are in the process of transitioning essential services to cloud providers like Microsoft Azure and AWS. This industry-wide evolution underscores the importance of staying technologically competitive in the dynamic financial landscape.