Kenya’s Banking Sector Undergoes A Digital Transformation, With NCBA Leading The Charge

Kenya’s banking sector is experiencing a profound transformation as it adapts to shifting customer expectations, rapid digital adoption, and evolving market risks. This dynamic change is redefining growth strategies, competition, and risk management across East Africa, with significant implications for small and medium enterprises (SMEs) and corporate clients alike.

In an exclusive interview with CNBC Africa, James Gossip, Managing Director of NCBA Bank Kenya, shared insights into the trends shaping this evolution and the strategies guiding the sector’s response.

SMEs remain the backbone of Kenya’s economy, contributing roughly 30% of the national GDP, with micro-SMEs accounting for about 80% of this contribution. Their success, Gossip noted, depends heavily on access to efficient, secure, and affordable financial services, an area increasingly defined by digital capability.

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The Rise of Digital-First Banking

Kenya’s digital revolution is sweeping through the financial landscape, driven by the demand for enhanced access, real-time liquidity management, and seamless transactions. In response, banks have been re-evaluating their digital platforms to better meet SME needs.

Recognizing this opportunity, NCBA Bank recently launched Connect Plus, East Africa’s first cloud-based digital banking platform, designed around three key SME priorities: security, omni-channel accessibility, and cost efficiency.

“The response has been overwhelmingly positive,” Gossip said, noting that more than 20,000 clients have already signed up since the platform’s debut. Developed using an agile methodology, Connect Plus continues to evolve based on real-time customer feedback, a departure from traditional top-down innovation models toward customer-driven product development.

A Young, Mobile-First Population

Digital banking adoption in East Africa has accelerated dramatically, with Kenya standing out for its mobile banking penetration rate of 145%. The country’s youthful demographic, 70% of the population under age 35, is a major catalyst for this shift, showing a strong preference for digital and mobile-based financial solutions.

This demographic trend is pushing banks to rethink how they design, deliver, and market products, ensuring that innovation aligns with digital lifestyles and user expectations.

Balancing Innovation and Risk

While digitalization drives efficiency and inclusivity, it also introduces new challenges around risk management and regulatory compliance. Gossip highlighted the crucial role of fiscal and monetary policy in shaping banking strategy, noting that maintaining low non-performing loan ratios and adopting a conservative credit risk approach remain vital to sector stability.

At NCBA, data and analytics are at the heart of this effort. The bank is leveraging artificial intelligence and behavioral scoring models to deliver more personalized lending decisions that reflect real customer behavior. Through partnerships with fintech firms and the integration of advanced technologies, NCBA aims to deepen financial inclusion and enhance competitiveness.

A Future Defined by Adaptability

Rather than chasing radical disruption, NCBA’s approach focuses on rapid, efficient adaptation to customer and market needs. This philosophy is driving a new era of agile, innovation-led banking, where data, flexibility, and customer trust define success.

Despite broader economic headwinds, Gossip remains optimistic. He believes that agile digital solutions and transparent engagement will remain key pillars for sustainable growth in Kenya’s banking sector.

“As Kenya continues to bridge the digital divide,” he concluded, “the transformation taking place today will not only reshape our banking sector but also catalyze broader economic growth across Africa.”

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