KBA survey reveals reasons customers switch banks

Poor customer service, high fees and inconvenient digital banking platforms are some of the top reasons Kenyans switch banks, a survey report released today reveals.

According to the 2024 Banking Customer Satisfaction Survey report by the Kenya Bankers Association (KBA), 47.3 per cent of customers leave their banks due to poor service, while 46 per cent cite high fees as a major reason for switching. Other concerns include inconvenient digital platforms (32.8 per cent), long wait times (30.1 per cent), and security concerns (29 per cent).

 It also revealed that mobile and internet banking remain the most preferred channels, each scoring 6/6 in customer satisfaction.

The survey exposed that more than 56 per cent of consumers favour self-service digital platforms for their convenience and round-the-clock availability. The story further showed that ATM usage and call centre interactions have declined, signaling a shift toward digital-first banking.

The study revealed that access remains a challenge to the banking industry, with 10.63 per cent of customers requiring special accommodations such as braille or screen readers, yet many digital banking services still lack accessibility features.

The report also pointed to financial exclusion in rural areas, where banking services remain concentrated in Nairobi and other urban centres, leaving underserved communities with limited options.

Speaking at the launch, Competition Authority of Kenya (CAK) Director General David Kibet Kemei emphasised the need for greater transparency and consumer protection in the banking sector.

“Transparency in fees, robust complaint redress mechanisms, and financial literacy are non-negotiable. With only 18.3 per cent of Kenyans financially healthy, banks must develop tools to track financial wellness and educate customers on budgeting and responsible borrowing,” he said.

He called for stronger consumer protection measures, including enhanced data security, better digital banking experiences, and financial solutions tailored for all income groups.

Kenya National Chamber of Commerce and Industry (KNCCI) Chief Executive Officer Ahmed Farah echoed concerns about financial exclusion, noting that banking activity remains heavily concentrated in urban areas.

“MSMEs, which form 40 per cent of our GDP, still face barriers to affordable financial services. Banks must expand beyond cities through partnerships to unlock digital inclusion and empower grassroots entrepreneurship,” Farah said.

He also emphasised the potential of AI and data-driven strategies to improve financial access, adding that KNCCI remains committed to supporting market linkages, policy advocacy, and trade facilitation.

Despite the challenges, customer loyalty in the banking sector is improving. The report revealed that the industry’s Net Promoter Score (NPS) has risen from 37.7 per cent in 2023 to 44 per cent in 2024, with 58.1 per cent of customers actively recommending their banks.

However, retention remains a concern, as only 36.7 per cent of customers are loyal to a single bank, while 49.5 per cent hold accounts in two or more banks, suggesting they are still seeking better service options.

KBA CEO Raimond Molenje acknowledged the sector’s progress but warned that inconsistencies in service delivery and digital inefficiencies could undermine trust. “Kenya’s banking sector is a pillar of innovation, but we must address operational gaps to sustain trust.

Strengthening digital infrastructure and inclusivity—like expanding our Persons with Disability Accessibility Project—will ensure services are seamless, secure, and accessible to all,” he said.

The report also highlighted improvements in complaint resolution, with 75.44 per cent of complaints resolved within two days, up from 66.4 per cent in 2023.

However, 16.25 per cent of customers still reported inconsistent resolutions, pointing to a need for stronger service-level agreements and greater accountability in customer support.

KBA recommended several measures to address customer dissatisfaction, including greater investment in user-friendly digital banking platforms, enhanced transparency in fee structures, and the expansion of financial services in underserved areas.

Banks were also urged to adopt AI-driven tools for personalised services, develop tiered loyalty programs to retain customers, and improve the accessibility of mobile and internet banking for persons with disabilities.