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
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.
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
“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
“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.