I&M Bank swaps its legacy payments system for US firm Otoma’s AI-native hub, starting in Kenya

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I&M Bank has picked US payments technology firm Otoma to replace the legacy system that runs its payment services, a change the lender says will let it launch and change payment products much faster. The rollout starts in Kenya, according to Otoma, which described the Kenyan launch as “just the beginning”.

For the bank’s more than one million customers, nothing changes overnight. The upgrade sits in the back office, but it governs how quickly I&M can add new ways to pay, fix problems and connect to new payment networks as Kenya’s payments market shifts.

What the Otoma deal covers

Otoma will supply what it calls an AI-native payment hub. A payment hub is the central software that receives, checks, routes and settles a bank’s payments, whether they are transfers between banks, card payments or mobile money movements. Older bank systems often handle each payment type separately, which makes every change slow and expensive.

Jamie Loden, I&M Bank’s chief operating officer, said the platform would let the bank “simplify how we build, change and operate payment services, reduce the time and complexity of delivering new capabilities, and respond much faster as our customers, markets and payment ecosystems evolve.”

Otoma chief executive Peter Reynolds, who took over at the company in April this year, said the hub would replace I&M’s legacy infrastructure and ease the “time, complexity, and cost involved in making change”. The firm says its tools let banks develop, test and launch payment products in “near real-time”.

Otoma was founded in 2016 by chairman Reuven Ben Menachem and chief operating officer Zack Yaniv. The financial terms of the I&M contract have not been disclosed, and neither firm has given a date for when the new system will go fully live.

Second systems upgrade in two months

The Otoma deal follows a trade finance upgrade last month, when I&M partnered with Surecomp to deploy its DOKA-NG and RIVO software to digitise letters of credit, guarantees and other trade finance work. Together, the two deals point to a lender rebuilding its core operations piece by piece rather than in one large switch-over.

I&M, founded in 1974, offers retail and corporate banking. Separately, the Tax Appeals Tribunal recently set aside a KSh713m KRA tax bill raised against the bank over a bad-debt entry.

Why it matters for Kenyan bank customers

Kenyan banks are competing hard with mobile money for everyday payments, and speed of launching products has become a key weapon. Safaricom keeps adding credit, savings and investment features to M-Pesa, while banks are pushing instant transfers through Pesalink and app-based services. A more flexible payment engine should make it easier for I&M to add features such as faster transfers or new merchant payment options without long system freezes.

Customers comparing how money moves between banks can read our guide to Pesalink, RTGS and EFT charges and limits, or check the M-Pesa paybill numbers for 36 banks for deposits into bank accounts.

Bank system migrations can cause short outages while services switch over. I&M has not announced any planned downtime linked to the Otoma rollout.