Qorus Banking Innovation Awards 2016

County Revenue Collection and Management Solution

15/09/2016 Banking Innovation

About

The system is a web based application integrated with payment channels such as ABC Bank branches, Agency banking outlets, POS collection application+devices, Mobile app, Mobile money from the main Mobile Network operators, online payment gateway (Visa/Master card payments) and other systems.

Innovation presentation

Concept&Objectives: Following the establishment of devolved governments in Kenya, county governments were expected to collect their own revenue to plug in the gap between allocation of revenue from the National Government and their own budget.

To achieve this, they had to replace the traditional systems with new technology-based systems. ABC Bank designed and implemented the automated an end to end Revenue collection & Management solution for Kirinyaga County. The new solution was expected to address the following:

• Inefficiency- inadequate revenue collection staff to cover large geographical areas, limited access to certain areas, while business people became apathetic due to too much time spent at local authorities’ offices.

• Revenue loss through corrupt practices

• Shortfalls in collection targets

• Lack of proper revenue management framework

• The rise of ghost workers

• High costs incurred in manual tasks.

Reasons: In order to plug the gap in revenue allocation by the central government, counties needed a foolproof revenue collection system that addresses the challenges of the previous system while enhancing efficiency and convenience for both the county administration and residents.

Automation of revenue collection processes and structures is instrumental in improving and simplifying administration of taxation through utilizing modern technologies. With a modern system of revenue collection, a county government is able to mobilize additional revenue by increasing collection efficiency, convenience to the taxpayer as well as by expanding its revenue base (identify and accommodation additional revenue sources).

State of competition: Kenya has 47 counties. Majority of them have launched automated revenue collection systems in partnership with financial institutions. ABC Bank has developed an innovative county governments strategy anchored on strong relationships and unique value proposition on a partnership model. This is what has set the bank apart from the competition as the bank is looking at the model from a partnership perspective and not just as a banking partner. The bank has developed and deployed the end to end solution for the County government free of CAPEX and is offering on a hosted model, thereby saving the county on the infrastructure cost and allowing the County to concentrate on their core mandate which is Revenue collection and Service delivery to its citizen. The solution is unique in the sense that is real-time integrated to several revenue collection touch-points such as Agency, POS application, Mobile app, web-portal, mobile money payment channels from the Mobile Network Operators, Online payment gateway and to the National Governments financial system (IFMIS).

Source of inspiration: The old system used by local authorities for revenue collection was manual. It entailed collection personnel physically visiting business premises and markets to collect fees. Traders/ business people would also visit local authorities’ offices to pay for business licenses, land rates and other fees. ABC Bank wanted to develop and provide a revolutionary solution that will help county governments attain their revenue collection targets and therefore transform lives of residents through quality service delivery in health care, infrastructure, education, trade and enterprise development, job and wealth creation, etc.)

Uniqueness of the project

The end to end solution is hosted at ABC Bank Data Centre with DR sites managed externally and provided on a SAAS model. The uniqueness of the project is that ABC Bank has provided the solution free of CAPEX and has entered into strategic agency partnerships with Saccos within the County who are providing their branches for County Revenue Collection on behalf of the bank , thereby providing over 30 Sacco branches as outlets for Revenue collection for the County Government, without having to open a bank branch within the County. The solution is also unique in that it has a GIS (Geographical Information System) capability. Thus, it analyzes, stores, manipulates and visualizes geographic information on a map. It centralizes the revenue collection and management process in order to monitor and report on various revenues generated within Kirinyaga County. This enables it to:

• Determines location of new ads (billboards, wall branding, etc) and the associated revenue from these ads.

• Allows the county government to identify taxable properties, in order to avoid any outliers

• Tracks attendants at parking lots to identify the revenue they collect and check for collection discrepancies

• Streamlines permit acquisition processes & increases visibility of assets (through geographical mapping) and therefore prevents revenue leakages

• Saves costs and reduces the amount of resources allocated to do manual tasks.

In-Depth Analysis

The Reason Behind

ABC Bank identified the need to help county governments transition from the brick-and-mortar revenue collection systems to the more efficient and convenient technology-based system which is key in:

• Enhancing efficiency , thus improving revenue collection

• Minimizing leakage of revenue (corruption) by sealing of loopholes in the previous system

• Minimizing tax evasion

• Enhancing convenience and confidence among tax payers / county citizens

Results

• The Solution has impacted the Revenue Collection services positively by providing convenience and efficiency which has led to the County increase their collection by 70%

• The Citizens praise the solution since they do not have to travel for long distance to pay their taxes as they can do it at the comfort of their phones, while the Revenue Collectors do not have to work for too many hours dealing with physical cash reconciliations since the collection is now automated and real-time. The county has also redeployed most of the Revenue officers to deliver other services to the Citizens since with automation, optimal number of staff are required for revenue collection. The revenue loop holes that were existing before have been sealed with automation, thus increasing transparency, accountability and in turn efficient service delivery

• The product has received national and industry recognition- Think Business Banking Awards 2016 : Special Award, Best Product Innovation ; Connected Summit 2016 : 1st Runner Up, Best County Initiative Award.

Key Dates

  • Launch date 5 January 2015

Interested in learning more? Speak to Boris, Qorus's Content Lead

Qorus has a library of almost 8,000 innovation case studies across critical areas like customer experience, sustainability, marketing & distribution and more that can be used to inform your decision-making.
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