Banking

Equity bank transforms branches into customer relationship centres

Banks are starting to understand that asset management will boost non-interest revenue and foreign currency earnings.

Kenya, November 6th – Equity Bank Holdings Plc has embarked on an aggressive innovation journey geared towards transforming its key branches into relationship management centres, in a move aimed at offering customers personalized client experience.

This comes in the wake of digitization which has continued to push banks to mobile and online banking, leaving branches dormant.

Equity group managing director and CEO James Mwangi noted that in the last three months, 91 per cent of all the bank’s transactions were digital, supported by the group’s innovation and digitization strategy.

 This has moved the bank from the fixed cost delivery channels of brick and mortar of bank branches and ATMs, to variable cost delivery channels of mobile, internet, mobile App, Agency and merchant banking.

Regulatory and social pressure on banks’ pricing structures and downward pressure on deposit spreads is leading to the recognition that asset, or relationship management, is a viable new banking segment.

Banks are starting to understand that asset management will boost non-interest revenue and foreign currency earnings.

“Of the total 341.3 million monetary transactions, only 30.3 million transactions passed through the branches and ATMs with the rest, 311 million transactions passing through the third-party channels,” Mwangi said in a statement.

 “This shift in delivery channels resulted in a reduction of 11 per cent in staff costs while registering a modest increase of two per cent in total costs, maintaining a cost income ratio of 51.6 per cent at the group,” he added.

The above results indicate that more customers have now shifted to accessing the bank’s financial services via personalized devises like the eazzybanking app, equitel, internet banking, agency banking and merchants.

Equitel recorded 197 million transactions by September 2017 compared to 150 million transactions during the same period in 2016, the groups quarter three 2017 financial results show.

The platform is a mobile banking solution which allows customers to access both banking and telecom services from voice, data and Short Message Service.

Equitel recorded a 41 per cent growth from Ksh250.8 billion to Ksh353.6 billion while internet banking grew a record 1,696 per cent, fromKsh5.4 billion to Ksh96.9 billion.

Agency banking grew 18 per cent from Ksh331.6 billion to Ksh391.3 billion and merchants growing by 16 per cent, from Ksh34.8 billion to Ksh40.3 billion in transaction value.

Despite branches recording a decline in number of transactions by six per cent from 15.7 million to 14.7 million, there has been a three per cent increase in the value of transactions from Ksh1.071 trillion to Ksh1.106 trillion.

This has been largely driven by the bank’s focus on the SME sector, corporate and supreme banking, Mwangi said.

Currently, Equity bank has rolled out supreme branches countrywide, as it sets its eyes on positioning the branches as relationship management centers of excellence.

A recent survey by Geopoll ranked Equity bank as the most preferred lender in Kenya with the highest scale in Africa, followed by Capitec of South Africa and GT bank of Nigeria.

By Martin Mwita

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