Techs suck out 15 bank branches
Lewis Njoka @LewisNjoka
The number of bank branches decreased by 15 last year as adoption of alternative delivery channels deepened countrywide.
A report by the Central Bank of Kenya (CBK) shows that the number of branches dropped to 1,490 down from 1,505 in 2018.
During that period, eight counties reported an increase of 10 branches while 14 counties reported a decrease of 25 branches, translating to 15 overall decrease in branches as banks sent people home with technology taking centre stage.
Nairobi Country had the highest decrease at eight branches, says the CBK report for 2019.
“The decrease in physical bank branches was mainly attributed to the adoption of alternative delivery channels such as mobile phone banking, internet banking and agency banking,” the report reads in part.
Gerald Muriuki, an analyst at Genghis Capital, says he foresees a further reduction of bank branches this year as more customers adopt electronic banking and banks do away with branches that are no longer tenable.
Mergers and acquisitions
He said banks that have recently entered into mergers and acquisitions, such as NCBA, are likely to close some branches especially in cases where branches overlap.
“If you look at recent statistics from the Central Bank, there is a huge growth in terms of mobile and internet banking.
There is a lot of shift from physical branches towards electronic form of banking,” he said.
“When you look at numbers from the big banks like Equity and KCB, they are talking about over 98 per cent of transactions happening outside the branch.
That definitively means some of those branches may not be sustainable,” he added.
In 2019, Sh382.9 billion was transacted via Mobile-phone Financials Services (M-FS) in the country, a four per cent increase compared to Sh367.8 transacted in 2018.
However, the overall number of transactions declined slightly to 154.99 million down from 155.77 million in 2018.
As at December 31 2019, Kenya had 54.5 million mobile phone subscribers having transacted a total of Sh2.1 trillion via mobile phone, since inception in the country.
According to CBK, Banks have continued to leverage technology, introducing 31 new products in the market last year, most of which were applications seeking to introduce digital banking services.
“The financial services industry is being restructured by the ever-changing consumer needs, innovative financial products, technological advancement and the use of multiple delivery channels,” it says.
Technology
Banks embracing technology has resulted in improved efficiency in customer service with an employee serving more customers than he did in 2018, according to the report.
Last year, an employee was serving 1,956 customers compared to 1,733 the previous year.
Changes in staff over the period too reflected adoption in technology with some general duty roles replaced by more specialized, technology-oriented roles.
The number of staff increased by 0.43 per cent to 32,025 from 31,889 in 2018 with management and supervisory staff increasing by 2.1 and 7.2 per cent respectively. Support and clerical staff, however, reduced by 3.8 and 4.7 per cent.
