Currencies

Mobile banking uptake increases to 58 percent

agency

A signage shows agency banking and mobile money services at a Nyeri shop. PHOTO | JOSEPH KANYI | NMG

Summary

  • A customer satisfaction survey by Kenya Bankers Association (KBA) found that mobile banking was the most preferred channel in 2021 at 58.4 percent, up from 52 percent the year before.
  • Mobile banking is primarily offered through USSD codes, using basic mobile phone technology to offer financial services to customers without the internet.
  • The bankers’ lobby said the uptake has grown rapidly in the Covid-19 pandemic era as banks invested more in the platforms to reach customers who in turn sought to reduce contact-based interactions.

Six in 10 bank customers prefer mobile banking compared to other forms of accessing bank services, underlining the growing popularity of the convenient and automated platforms.

A customer satisfaction survey by Kenya Bankers Association (KBA) found that mobile banking was the most preferred channel in 2021 at 58.4 percent, up from 52 percent the year before.

Mobile banking is primarily offered through USSD codes, using basic mobile phone technology to offer financial services to customers without the internet.

The bankers’ lobby said the uptake has grown rapidly in the Covid-19 pandemic era as banks invested more in the platforms to reach customers who in turn sought to reduce contact-based interactions.

“The increase may be attributed to the challenges introduced by the pandemic and its containment measures which have entrenched the use of contactless banking services,” KBA said in a statement.

The use of mobile banking has also been incentivised by reduction or removal of charges on the services as directed by the Central Bank of Kenya as part of the regulator’s efforts to boost uptake of cashless transactions.

Mobile banking was the only channel that registered growth in preference while the rest stagnated or declined.

The survey found that online banking was the second most popular channel at 20.3 percent last year, dropping from 23 percent in 2020.

Under this category of internet-enabled platforms, apps developed by banks are the most preferred. Some of the bank apps include MCo-op Cash (by Co-op Bank) #ticker:COOP , Eazzy Banking (Equity) #ticker:EQTY , and SC Mobile Kenya (Standard Chartered) #ticker:SCBK .

Automated teller machine (ATM) was the third overall most preferred means of accessing banking services at 9.7 percent last year, declining from 12 percent in 2020.

Bank branch was fourth at seven percent, maintaining its popularity level. Agency banking was fifth, dropping to two percent from seven percent. The survey is based on feedback from nearly 30,000 respondents.

Mobile banking and banking apps are expected to dominate access to financial services in the coming years due to their convenience and ability to scale.

“The preferrence of banking applications is attributed to two main factors. First, many banks have launched and popularised the use of versatile banking apps, which have taken over some of the banking functions previously done by customers through mobile and internet Banking,” KBA said.

“Secondly, the penetration of internet-enabled devices and networks continues to grow in Kenya, giving some bank customers a new, preferred digital option for carrying out transactions.”

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