KCB Group, Kenya’s largest bank with a market capitalisation of $963.3 million (KES 124 billion), has completed the migration of its IT infrastructure to iColo, a tier III data centre.
The migration from on-premise infrastructure to iColo’s facilities in Karen and Gigiri, Nairobi, began in 2022. Two people familiar with the matter told TechCabal that the migration was motivated by a need to control costs. The bank had been incurring millions of shillings on power, cooling, and uptime for its in-house data centre.
It is unclear what cost savings KCB will achieve through this colocation migration since no specific projections or estimates have been provided.
KCB declined to comment on this story.
Before the move to colocation, KCB ran all its services on-premises. However, some services, such as Exchange, which offers currency exchange, online trading, and international money transfers, are hosted on Microsoft Azure, and plans are in place to move other services to AWS.
“This transition involved moving to a professionally managed colocation facility,” one person familiar with the migration process and who asked not to be named so he could speak freely told TechCabal
Colocated data centres, like iColo, provide shared spaces within larger facilities where multiple companies lease space. This allows such companies to benefit from shared services and infrastructure.
“Colocation offers a more cost-effective solution compared to building and maintaining an independent data centre. Banks can achieve economies of scale by sharing common resources,” a banking executive, who also wished not to be named, told TechCabal.
KCB isn’t the only Kenyan bank to choose this model. According to an industry insider, Equity Bank and NCBA have been using colocated facilities over the last few years to manage costs, signalling a growing trend among local banks to favour off-site data centre solutions.
Kenyan banks have also began upgrading their core banking applications. In October, Stanbic upgraded its core platform, Temenos, to version R24. KCB uses Temenos for traditional banking and recently updated it to version R21 for its Rwandan operations. However, KCB uses Sopra, a different core system for digital banking services.
