Kenya: Bank visits decline as customers opt for mobile transactions

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  • There has been a decline in bank visits across Kenya, with customers opting to deposit cash via mobile money platforms and transfer bank deposits to their mobile money wallets
  • In the latest Kenya Banking Sentiment Index, Deloitte reveals that this has posed a challenge to banks, which have made significant investments in their brick-and-mortar businesses
  • Deloitte recommends banks to consider leveraging innovations in technology such as cloud platforms, analytical capabilities and augmented intelligence which can generate levels of customer engagement

A new report has revealed that there has been a decline in bank visits across Kenya, with customers opting to deposit cash via mobile money platforms and transfer bank deposits to their mobile money wallets.

In the latest Kenya Banking Sentiment Index, Deloitte reveals that this has posed a challenge to banks, which have made significant investments in their brick-and-mortar businesses.

Has the rise of mobile transactions in Kenya affected bank operations?

The high cost of investing in new technology and robust digital systems also pose a significant challenge to
banks that have not considered significantly shifting to a digitised banking environment.

In addition, the promise of digital banking has not been fully realised, largely due to customer reluctance and/or
a lack of attractive digital solutions by the banks.

Banks have faced stiff competition from digital players such as M-Pesa, which has weakened their channel power.

According to Deloitte, globally and locally, banks are investing in chatbots to improve their customers’ experience.

Chatbots are AI-enabled conversational interfaces used to interact with customers instantly by replicating the patterns of human conversations.

Banks using AI chatbots have been able to increase customer interaction and attract more customers compared to those who do not have the platform.

Several top-tier banks in the region have developed credible and reliable systems that allow their clients
to have a smooth transition into the new operating mode of a digitized banking environment.

Some of these systems include Mobile money, Mobile banking applications and Online transaction systems.

What banks should do 

Going forward, Deloitte recommends banks to consider leveraging innovations in technology such as cloud platforms, analytical capabilities, and augmented intelligence which can generate levels of customer engagement
and operational efficiency that was unthinkable before.

“CBK’s governor recently noted that cloud platforms present a great opportunity for financial institutions to upscale to cutting edge financial services platforms to meet the needs of today’s discerning customers,” the report noted.

Further to this, advancements in biometric technology, including facial recognition, are creating new opportunities for banks to streamline their customer experience.

Currently, facial recognition technology is operational in many smartphones, and banks can capitalize on the already inbuilt and integrated software.

Deloitte further recommended for the exploitation of these digital platforms adding that they would enable banks to cross-sell services to customers more efficiently, potentially increasing banks’ revenue streams.

“For instance, banks that pool data from different sources should enable sales personnel to leverage on this data via the digital interface as they engage with clients,”.

Digital tools with cross-business data could allow junior bankers to work directly with customers without relying on the relationships of senior bankers while eliminating multiple roles in service delivery, all of which would reduce operating expenses and enhance customer centricity.

By forming partnerships or linking with third-party ecosystems, banks can provide a better customer experience and can evaluate customers past the boundaries of their traditional interactions.

Banks should prioritize retaining first-time users of digital channels by using targeted offers and engagement strategies.

At the same time, they should invest in digital, customer-facing technology to provide the seamless experience
the industry has been seeking for a while.

These enhancements may cover not only digital-only channels but also in-branch experiences, such as
self-service digital kiosks/interfaces.

Banks should also focus on delivering hyper-personalized services that can factor in a customer’s financial well-being holistically, by integrating their disparate data architecture across lines of business and functions and
combine it with AI-driven analysis to create a 360-degree view of customers.

Wanjiku Njuguna is a Kenyan-based business reporter with experience of more than eight years.

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