Digital wave takes banking outside branches for Kenya’s big lenders
The sheer speed and scale with which customers are carrying out digital banking transactions signals a shift to fully fledged virtual banking systems in Kenya.
Half-year financial disclosures by Kenya’s largest banks Equity Group and KCB Group show an increasing number of customers are shunning the branches for digital platforms when seeking banking services.
Equity is now competing with fintechs on the processing of payments, noted Group CEO, Dr James Mwangi, when announcing 98 per cent jump in half-year profit to Kes17.5 billion for the bank.
Dr Mwangi attributed the regional lender’s performance to the convenience brought about by digitization noting that “banking has now become a 24-hour service particularly with the increased adoption of digital payments.”
Equity’s story is very similar with KCB Group where CEO Joshua Oigara disclosed that in the period to June, the value of mobile transactions surged by 104 per cent to Kes1.1 trillion with over Kes172 billion being net mobile banking deposits.
Read also: Equity half-year profit jumps record 94 per cent to Sh17.5 billion
“As a Group, 98 per cent of all our transactions are now taking place outside the branch channels. We have also seen a 96 per cent growth in the Mobi Service transactions per customer to 19 per month as more customers adopt the mobile banking,” noted Mr Oigara.
In the half, KCB Group saw the number of mobile transactions soar by 54.7 per cent to 181 million from 117 million recorded in June 2020.
The bulk of the mobile transactions for KCB was driven by float purchases by cash transfer agents at 37 per cent closely followed by customer to business money transfers at 35 per cent.
In total, KCB’s total value of non-branch transactions grew by 75 per cent to Kes1.9 trillion by June this year from Kes1.07 billion realised at a similar period last year.
Customers at Equity Group moved Kes1.76 trillion via fintech channels in the half-year ending June being 147 per cent jump from Kes715.2 billion transacted at a similar stage last year.
The regional lender saw Kes917.7 billion transacted via digital platforms in the second quarter this year compared to Kes367.6 billion transacted in the comparable three-month period in 2020.
Financial disclosures show that Equity’s number of transactions on digital channels went up by 65 per cent in the half year to 556.4 million from 337.8 million deals recorded in the period to June 2020.
KCB Group attained a historic milestone with the balance sheet growing by 7 per cent to close the half at Kes1.02 trillion, up from Kes953 billion.
