Kenya’s Equity Bank removes ATMs in shift towards mobile banking
Kenya’s Equity Bank has started closing some of its automated teller machines (ATMs) as the lender shifts customers to alternative channels in a fresh cost-cutting strategy.
Equity, Kenya’s biggest bank by customer numbers, has so far closed 11 ATM lobbies, each of which had multiple cash dispensing machines.
One in every five ATMs in Kenya belongs to Equity Bank, thanks to an aggressive expansion strategy.
However, banks in Kenya are currently trying to adapt to the challenges of the rate-cap era. Many banks have turned to job cuts, branch closures and deploying technology to cut costs.
President Uhuru Kenyatta introduced the cap last August, ignoring the advice of the Central Bank of Kenya and the Treasury, as he sought to fulfil a 2013 election campaign pledge to lower the cost of credit.
Lenders have faced a reduction in revenue of as much as 25% and are therefore looking to offset the decline.
While ATMs require upfront capital investments to acquire the machines and lease space, they also depreciate at 20% annually.
Agency and mobile banking have no such capital commitments and have therefore proved a popular measure.
This shift was also informed by evolving preferences of Equity Bank’s 9.59mn customers who want to do their banking on the go through mobile phones, or access banking within their neighbourhood via agents.
“Last year Equity conducted a survey and the findings were customers prefer self-service digital banking and have a higher preference for convenience in payment platforms and access to loans,” said James Mwangi, Chief Executive at Equity.
Equity Bank’s mobile banking service – Equitel – processed 227.4mn transactions in the year to December 2016, followed by agents (61.9mn deals), ATMs (24.8mn), and 20.4mn dealings at its brick-and-mortar branches.
Mobile banking has become increasingly popular in Kenya over recent years, with mobile penetration reaching almost 90%.
With a rural population of 74% according to 2016 figures from the World Bank, many Kenyans are unable to access physical branches.
Ericsson: 5G will be fastest adopted mobile generation in hi
Ericsson’s June Mobility Report projects that nearly 600 million 5G subscriptions will be active by the end of 2021, making it the fastest adopted mobile generation in history.
The longer range forecast is for around 3.5 billion 5G subscriptions and 60 per cent 5G population coverage globally by the end of 2026.
China, the US, Korea, Japan and the GCC (Gulf states) will lead deployment, with Europe lagging behind. The latter got off to a slower start and has been mired in infrastructure battles over the provenance of hardware.
North East Asia is expected to lead 5G deployment with an estimated 1.4 billion subscriptions by 2026, while North America is expected to account for the highest 5G subscription penetration.
Key findings of the Ericsson Mobility Report, June 2021
5G remains on track to become the fastest adopted mobile generation in history with subscriptions increasing at a rate of about a million per day
China, North America and the Gulf Cooperation Council markets are leading the way on subscriber numbers, while Europe is off to a slow start
5G subscriptions with a 5G-capable device grew by 70 million during the first quarter of 2021 and are forecast to reach 580 million by the end of 2021
5G ready for 'advanced use cases'
Fredrik Jejdling, executive vice president and head of networks, Ericsson, said, “We are in the next phase of 5G, with accelerating roll-outs and coverage expansion in pioneer markets such as China, the USA and South Korea. Now is the time for advanced use cases to start materialising and deliver on the promise of 5G. Businesses and societies are also preparing for a post-pandemic world, with 5G-powered digitalization playing a critical role.”
Photo credit: Ericsson