Will The COVID 19 Pandemic Change Banking In Kenya?

Changing Society

COVID 19 is sweeping through our communities, forcing people to exercise social distancing in their day to day engagements. Weddings have fewer people; funeral ceremonies have become rushed events where most customs are not being observed, religious gatherings have mostly gone online. The impact on society in ten months has been dramatic.

Thankfully, technology has played a central role in bridging the social gap that has been precipitated by this pandemic. We have seen the widespread adoption of digital applications that have enabled remote working, delivery services have taken hold and gained more popularity as people prefer ordering-out instead of dining-in, cashless transactions have been encouraged, making this option top of mind for many Kenyans.

It’s safe to say that Kenyans' consumption habits are changing due to environmental changes caused by the pandemic. As Richard Shotton indicated in The Choice Factory, the habit bias becomes loosened when consumers undergo a life event.

……if a consumer’s environment changes the habits become loosened. For example, when consumers undergo a life event, their environment is changed enough to destabilise habitual behaviour. In case that term is unfamiliar, by life event I mean important changes, such as getting a new job, starting university, having a baby or getting married.

Richard Shotton. The Choice Factory: 25 behavioural biases that influence what we buy (p. 34). Harriman House. Kindle Edition.

I am also careful to note that this impact may not be uniform across the board in the country. My observation is that the effects have been felt more in urban and peri-urban setups in Kenya.

A little bit of History

Technology adoption in the banking sector in Kenya has been a slow evolution. Having joined the industry fifteen years ago, I have seen several phases of this process.

Looking back, one cannot believe it took four weeks to open a bank account fully. Most transactions were fulfilled by cash. This is because cash withdrawal was difficult to execute due to the very few available cashpoints. We are talking pre-M-PESA days.

Most debit card and credit card point of sale transactions were prone to failure leaving customers embarrassed at supermarket tills. And yes, Banks used to close their doors at three o’clock in the afternoon to execute manual reconciliation of transactions before the end of day processes were run. This process of manual reconciliation would take at least two hours to complete. In general, banking services were a customer experience dystopia.

Over time, I saw Banks make changes in the account opening processes, teller services, bank reconciliation services, roll out of widespread ATMs services, agency banking services, and cheque clearance automation services amongst many other service delivery improvements.

Fast forward fifteen years later, most banks have processes that support the opening of a bank account within twelve hours. Best in class Banks support the opening of bank account through their mobile and web channels instantly. ATMs and Agent cash-out points are widespread and thanks to M-PESA, sending money to anyone in the country is a breeze.

Slow progress

There is a fundamental belief amongst the banking industry players and pundits that the ground has been shifting for a while now, and the Pandemic is set to hasten this process. Will Kenyan Banks be slow to react again?

In the same fifteen-year period in the banking industry, we have seen large-scale digitalisation of services and products offered by information-based companies (Search Engines, Social Media Companies, Entertainment companies, Telecommunications Companies e.t.c). This process has been catalysed by the widespread availability of technology practices, tools, and widely available knowledge.

The watershed moment was when Banks allowed a Telecommunication player to muscle them out of the retail payment market through mobile money services.

- The barriers to offering financial services to a subset of consumers are extremely low today. A motivated entrepreneur in his garage can build an App offering a loan service, for example, host it on Amazon or Azure cloud and publish it on the App stores in less than three months -


The green shoots we see in the widespread acceptance of digitalisation and changing habits precipitated by the pandemic have become a point of reflection for me.

We have never been in a period where the market is so receptive to digital-first products than now. Winston Churchill once said, “never waste a good crisis.” This pandemic will be a wasted crisis if Banks don’t recognise what is going on and jump on the opportunity to change their business models.

The question is, how should Banks be driving choice architecture in as far as their customers are concerned and what business models would enable this to happen?

Can Banks make a timely change?

To make the right strategic choices, Banks need to be aware of the underlying changes taking place. These can be bucketed into:

  1. Secular Changes: We are seeing changes in people habits in as far as consumption of technology services and products is concerned. People are more receptive to digital-first products. This shift, combined with technology’s democratisation, has created fertile grounds for Internet companies to spring up and digitise Kenyan economy. These companies could be new players or existing large telecommunications companies that have payments products and have ambitions for creating lifestyle products.
  2. Operating Challenges: Banks are still very traditional in their set up. The hierarchical management structures I found in my first banking gig fifteen years ago still exist today across the industry. Slow decision-making processes still plague the industry. Lack of competencies in digital-first skills that include Business Model Design, UX Design and Behavioral Economics, Digital Product Design, Data Science, Digital Marketing, and DevOps at different management levels is a barrier to adopting and executing a digital-first strategy in Kenyan Banks today.

Is The Platform Business Model An Option?

To address these issues, Banks may need to borrow a lot from the Platform businesses that rule the digital internet economy. According to NFX.com:

Network effects are among the four remaining defensibilities in the digital age, including brand, embedding, and scale. Of the four, network effects are by far the strongest.

Linear Business Model

Banks today are executing against a linear business model. This is where value is created linearly internally and sold downstream to customers. The effect of this is that technology, people and processes are organised in a top-down hierarchical manner.

These business models are very efficient in manufacturing enterprises where products move downstream through supply chains to customers. In the internet age, supply chains are not the aggregators of value. This has shifted to networks that connect business and individuals, enabling them to exchange value.

Platform Business Model

In a Platform business model, value exchange is multidirectional. Platforms allow for network effects to happen.

Networks are the new aggregator of business value. ……..what a company owns matters less than the resources it can connect to. Today’s most valuable businesses are those that can build and orchestrate large networks, not those that can aggregate and centralize large amounts of resources under one roof. In the old model, scale was a result of investing in and growing a business’s internal resources. But in a networked world, scale comes from cultivating an external network built on top of your business.

Moazed, Alex; Johnson, Nicholas L.. Modern Monopolies (p. 27). St. Martin’s Publishing Group. Kindle Edition.


  1. https://www.nfx.com/post/network-effects-manual/
  2. Moazed, Alex; Johnson, Nicholas L... Modern Monopolies (p., 27). St. Martin’s Publishing Group. Kindle Edition.
  3. Richard Shotton. The Choice Factory: 25 behavioural biases that influence what we buy (p. 34). Harriman House. Kindle Edition.


These are my humble observations, and I leave the door open to the fact that I could be totally wrong. Let me know what you think about the effects of COVID 19 on the banking sector in your country.

The opinions presented here are strictly my own and do not represent those of my employer.



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digital money design.

digital money design.

Fintech, Banking, Financial Services, Decentralised Finance, Technology.....