Commercial banks have started getting payback from the deployment of technology which is taking customers away from the branches, helping cut costs related to the deployment of tellers and increase the speed of transactions through mobile and internet supported platforms.
For example, at the Equity Bank, 97% of all transactions of the bank are being done outside the physical branches. The bank CEO James Mwangi said mobile transactions taking up 77% of all transactions while agency banking is contributing 12% of all transactions.
Investment company Cytonn said in an analysis that this development is expected to further improve on banking efficiency, and assure the sustainable growth of its banking business.
“This will likely propel the bank’s prospects of achieving sustainable growth, as it replicates its successful business model across its various regional subsidiaries,” noted Cytonn.
Gideon Muriuki, the CEO of Co-operative Bank Group said the bank has successfully moved 89% of all customer transactions to alternative delivery channels that include mobile banking, an expanded 24-hour contact centre, 586 ATMs, internet banking and over 16,000 Co-op Kwa Jirani banking agents.
“Our Mco-op Cash Mobile Wallet continues to play a pivotal role in the growth of non-funded income with over 4.7 Million customers registered and loans worth over Sh27.6 billion disbursed as at the close of quarter three 2019,” Dr Muriuki said.
KCB is also a major beneficiary of the digital revolution. The bank revealed that 95% of total transactions are being performed outside the branch. This is comprising of 75% on mobile, 150% on the agency, internet and POS and 5% on the ATM, while only 5% was performed by branch tellers.
“This has facilitated the faster growth of transactional income while maintaining a slower pace in the growth of operating expenses. This has also seen a 141% growth in non-branch revenue to over Sh8.6 billion,” said Cytonn while analyzing the bank’s quarter three performance.
“Going forward, we expect the bank’s growth to be driven by channelled diversification. This is likely to help the bank to continue improving its operational efficiency. The benefits of this are already being felt, as the bank aligned its staff headcount to its operational needs.”