More than half of Kenyans today rely on mobile phones to perform financial transactions, a new study shows.
This comes as commercial banks increasingly adopt mobile banking to increase their customers and improve services.
According to the mobile banking survey released by the Kenya Bankers Association Tuesday, up to 60 per cent of Kenyans use mobile phones to carry out financial transactions.
The report said the complementary relationship between banks, mobile phone firms and agency banking has greatly improved.
“The growth of the mobile banking platform is steadily changing the way to do business in banks. Technology has greatly improved the quality of service delivery in financial institutions,” said the banking association chief executive Habil Olaka.
He said the fast growth of mobile banking has caused most banks to change the way they do business, technology taking the center stage.
“Days are long gone when customers would queue at banking halls waiting to pay their utility bills, school fees or any other financial transaction. They can now do this using ATM cards, over the Internet or from the comfort of their homes using a mobile phone,” said Mr Olaka.
It is the first survey conducted by the association’s center for research on financial markets in collaboration with Think Business Limited.
The report down-plays existing competition between banks and mobile money service providers to attract customers, saying the two complement each another.
“Due to the tremendous growth of the mobile phone industry, most financial institutions have ventured into the untapped opportunity through partnerships with mobile network operators,” said Mr Olaka during the release of the study.
The rise in mobile banking has been attributed the desire by consumers for more security, cost and time savings. About 95 per cent of those interviewed perceive mobile banking as cheaper than normal banking.
Mobile banking customers were however worried about fraud and lack of trust. The banking association says this needs to be addressed before it deals a blow to mobile banking.
According to the survey, 64 per cent of all Kenyans use the mobile phone as the main avenue for sending or receiving cash locally.However, up to 58 per cent of cash withdrawals are done from Automated Teller Machines with mobile firms only accounting for a fifth of total withdrawals.
The mobile money market is estimated to have 17 million users transferring approximately Sh 2 billion daily.The report further projected thetotal number of mobile subscribers to rise to 33.2 million in 2014 from the current about 20 million users.
Kenya is ranked top in the world among countries with the fastest growing mobile money adoption rates and this is the reason financial institutions have shifted from traditional banking.
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