Digital Banking Most Preferred for Transactions in Kenya, CBK

A new survey has revealed that a majority of Kenyans still prefer to use digital banking in 2021 as fintech continues to influence transactions behavior.

According to the FinAcess Household Survey 2021, the use of mobile banking platforms increased from 25.3 percent in 2019 to 34.4 percent in 2021.

General banking services on the other hand, including digital banking, increased by 44.1 percent in 2021 from 40.8 percent 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,” read part of the report.

The survey conducted jointly by the Central Bank of Kenya (CBK) and Financial Sector Deepening Kenya (FSD Kenya) noted that the number of clients who used physical bank branches declined from 29.6 percent in 2019 to 23.8 percent in 2021.

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Furthermore, the survey stated that the role of physical cash is fast diminishing as technology is continuously increasing to influence transaction behavior.

The use of informal sources to access financial services reduced to 4.7 percent in 2021 from 6.1 percent in 2019 according to the survey. This shows that there is an increasing informality in the financial sector.

Moreover, financial access services from unregulated lenders declined from 8.1 percent in 2019 to 2.1 percent in 2021. This is due to the stiff completion they face from the bank-based products.

The survey added that there was an increase in the number of people using mobile money on a daily and weekly basis in 2021 as compared to 2019.

The increased mobile banking usage is 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.