Mobile accounts listed most preferred banking platform in CBK survey

NAIROBI, Kenya, Dec 16 – Majority of Kenyans preferred to use digital banking in 2021 opting out of brick and mortar facilities as fintech continued to influence transactions behavior, a new survey published on Wednesday revealed.

According to the FinAcess Household Survey 2021, the use of mobile banking platforms increased from 25.3 per cent in 2019 to 34.4 per cent in 2021 even as banking services in general, including digital banking, increased by 44.1 per cent in 2021 from 40.8 per cent in 2019.

“This is attributed to the increased usage of mobile banking accounts; whose proportion rose to 34.4 percent in 2021 from 25.3 percent in 2019,” the survey conducted jointly by the Central Bank of Kenya (CBK) and Financial Sector Deepening Kenya (FSD Kenya) noted.

The survey noted the number of clients who used physical bank branches declined from 29.6 per cent in 2019 to 23.8 per cent in 2021.

Further, the survey also noted the diminishing role of physical cash as technology continues to influence transactions behaviour.

It noted that only 18.3 per cent of respondents used cash exclusively.

Meanwhile, formal financial inclusion as measured by the access dimension, expanded to 83.7 per cent in 2021 from 82.9 per cent in 2019, as more Kenyans put their money in accounts.

The survey also noted that the use of informal sources to access financial services declined to 4.7 per cent in 2021 from 6.1 per cent in 2019, implying increasing formality in the financial sector, hence better regulation and safety.

In particular, innovations in bank-based products continued to offer competition to unregulated digital lenders, hence the decline in usage of the latter from 8.3 per cent in 2019 to 2.1 per cent in 2021.

Even so, the segment of the adult population excluded from accessing financial services and products by providers, increased to 11.6 percent in 2021 compared to 11.0 percent in 2019.

“This highlights the impact of Covid-19 restrictions that made it difficult for the youths turning 18 years to take national Identity (ID) Cards, which are necessary in direct access to formal financial service providers,” the  survey read in part.

The findings of the survey also indicated increased usage of mobile money on daily and weekly basis in 2021 compared to 2019, but a decline for monthly usage.

This was attributed to the role of mobile money in addressing the cash needs of households; government policy on cashless transactions to curb the spread of COVID-19 pandemic; waiver of transaction fees on mobile money; and self-caution by users during the COVID-19 pandemic.