Most Kenyans prefer digital banking as they seek better service and lower costs, KBA report shows
Financial exclusion continues to be a pressing issue, with 10.63 per cent of customers requiring special accommodations such as braille or screen readers, yet many digital banking platforms still lack these features.
Poor customer service, high fees, and unreliable mobile banking services are the primary reasons Kenyans are switching banks. This has been revealed in the Kenya Bankers Association (KBA) 2024 Customer Satisfaction Report.
The report, which was released on Wednesday, further revealed that nearly half of banked Kenyans hold two or more accounts, underscoring growing competition in the banking sector as customers search for better financial services.
"Transparency in fees, robust complaint redress mechanisms, and financial literacy are non-negotiable. With only 18.3 per cent of Kenyans financially healthy, banks must develop tools to track financial wellness and educate customers on budgeting and responsible borrowing," noted Competition Authority of Kenya (CAK) Director-General David Kemei.
The findings show that 47.3 per cent of customers cited poor service as their reason for switching, while 46 per cent pointed to high transaction and maintenance fees. Other concerns include inconvenient digital platforms, long wait times, and security issues.
Digital banking
The assessment also pointed to digital banking as the preferred mode of banking for most Kenyans, with mobile and internet banking receiving top satisfaction scores.
"More than 56 per cent of customers favour self-service digital platforms for their convenience and accessibility," the report says.
However, access to financial services remains a major concern, especially for rural communities. This is because banking services are concentrated in Nairobi and other urban centres, leaving underserved areas with limited options.
"MSMEs, which form 40 per cent of our GDP, still face barriers to affordable financial services. Banks must expand beyond cities through partnerships to unlock digital inclusion and empower grassroots entrepreneurship," stated Kenya National Chamber of Commerce and Industry (KNCCI) CEO Ahmed Farah.
He also emphasised the potential of AI-driven banking solutions in improving financial inclusion.
Despite these concerns, customer loyalty in Kenya's banking sector is gradually improving. The report noted that the industry's Net Promoter Score (NPS) increased from 37.7 per cent in 2023 to 44 per cent in 2024, with 58.1 per cent of customers actively recommending their banks.
However, retention remains a challenge, with only 36.7 per cent of customers sticking to a single bank, while nearly half hold accounts in two or more banks, seeking better service and lower costs.
Financial exclusion continues to be a pressing issue, with 10.63 per cent of customers requiring special accommodations such as braille or screen readers, yet many digital banking platforms still lack these features.
"Kenya's banking sector is a pillar of innovation, but we must address operational gaps to sustain trust. Strengthening digital infrastructure and inclusivity like expanding our Persons with Disability Accessibility Project will ensure services are seamless, secure, and accessible to all," noted KBA CEO Raimond Molenje.
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