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Kenyan banks grapple with love for
ATMs amid digital banking trend  

NAIROBI, (Xinhua) -- Kenyans love for use of automated teller machines (ATM) to access their money has seen banks increase the number of the cash dispensers across the country as they reduce physical branches and adopt digital channels.

The commercial banks have been forced to change their initial strategy of doing away with the machines and physical branches in favor of digital technologies.

The 42 banks in Kenya in 2016 and 2017 scrambled to come up with digital branches to serve their customers online, with market trend initially showing this was the future of the sector.

A majority of bank customers in the East African nation consequently have adopted digital technology, where they have linked their accounts to mobile money for transactions.

However, they are still in love ATMs, making commercial banks grapple with the misnomer of customers embracing digital technology and at the same time sticking with cash dispensers.

Central Bank of Kenya’s latest report on the banking industry points to this incongruity that the banks have to deal with.

In 2017, Kenyan banks increased the number of ATMs by 6.36 percent to nearly 3,000, reversing a trend that had seen the number of the machines decline in 2016.

“The number of ATMs at the end of December 2017 stood at 2,825 from 2,656 in December 2016,” said the bank on Thursday.

The growth was a shift from 2015 to 2016 where the number of ATMs across the country decreased by 62 as banks went digital. 

“The increase in ATMs in 2017 partly reflects the strategic decision by banks to reduce cost of opening new branches by putting up more cash dispensers and reach more customers,” noted the apex bank.

The number of bank branches during the period, however, decreased from 1,541 in 2016 to 1,518 in 2017. Nairobi County registered the highest decrease in the number of branches by 14.

Meanwhile, as more ATMs were put up in 2017, the Kenyan banking industry that year was marked with enhanced efforts by banks to embrace information technology systems that include setting up of online banking platforms and digital loan platforms.

“The banks continued to leverage on digital platforms to drive business strategies and models aimed at providing banking services more efficiently. Banks are reviewing their business and digitizing some processes that were traditionally manual such as personal loan application,” noted the apex bank.

The digital innovations have certainly enabled banks to reach out to more customers and offer them services more efficiently.

The number of ATMs, however, continues to grow in the East African, with the apex bank data showing that it currently stands at 2,852.

Bernard Mwaso, a consultant with Edell IT Solutions in Nairobi, attributed Kenyans love for ATMs amid digital banking channels growth to issues including culture, fraud and banks improving services at the machines.

“I believe one of the things making Kenyans stick with ATMs even as they embrace digital platforms is the culture they have had for years, especially among the older customers. People are used to walking to an ATM and withdrawing cash. It won’t stop soon,” he said.

“Banks have also been improving their services at the ATMs. They are no longer cash dispensers alone but most banks are now offering depositing and forex services at the ATMs, where people can withdraw dollars attracting many to the machines,” he said.

He added that going by increased fraud in the banking industry on the digital channels, a good number of bank customers consider the platforms high-risk.

“I stopped digital banking because I was carjacked last year in a public transport vehicle and the thugs used the platform on my phone to transfer cash,” journalist Julius Korirs said. 



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