NCBA enters deposit race with cash prize offers
NCBA Bank has kicked off a three-month deposit mobilization campaign named “Deposit & Delight,” offering cash rewards to savers. This initiative provides Kenyan customers with the opportunity to win up to Kes1 million for deposits as low as Kes5,000.
The campaign underscores the bank’s commitment to expanding its retail banking business to support its key strategic priority of customer growth. Traditionally, banks offer prizes to encourage deposit mobilization, and as lenders grapple with the growing cost of fund deposit mobilization, more campaigns are likely to be launched.
However, with the rise of digital banking, competition from unit trusts, and awareness of government interest rates, it remains to be seen whether prizes or higher rates of return will attract more depositors.
Absa Bank pushes deposit return to almost double-digit
Absa Bank Kenya, for instance, is promising to reward savers with a 9 percent interest rate, with monthly payouts making the investment relatively liquid. The PanAfrican lender is taking its campaign digital, where the cost of onboarding savers is low, and reaching them is highly efficient, especially among the younger workforce.
Banks are currently competing for deposits with higher rates and recruitment drives, with some targeting niche market segments.
SME accounts lockdown at StanChart
Standard Chartered Kenya has launched a Kes15 million campaign aimed at rewarding new account holders who transfer their salary accounts to the bank. The campaign, titled “Switch your Salo. Bank Better,” seeks to reward clients opening salary accounts with Standard Chartered as the bank expands its suite of wealth management services for salaried employees. StanChart is also aiming to attract high-value small businesses by setting minimum limits on SMEs that enjoy their premium services.
The decision to close accounts of small businesses with low monthly cash inflows of less than Kes10 million may, however, work against StanChart, providing an opportunity for competitors to target their clients and offer small business banking. It also poses a risk to the bank’s public image, potentially being perceived as elitist.
Read also: Ndiinomics: How Kenya wants to reap without sowing
Good time to be a saver
This period presents an opportune time for savers, as banks are willing to pay higher returns, making savings an attractive investment option, especially for young savers. Younger workers, concerned about the economy, are seeking good investment opportunities to maximize their returns.
According to a consumer trends study by marketing consultants Pierrine, 22 percent of respondents stated that they were saving for a rainy day as part of their personal finance strategy during challenging times. To better manage their finances, young consumers are employing financial strategies such as debt avoidance, budgeting, investing, and setting financial goals.
