This archive report was first published on 14 November 2019.
As the banking industry continues to evolve, one thing remains clear: Automated Teller Machines (ATMs) are here to stay. In fact, the number of ATMs in Kenya has been increasing, with the banking industry adding 37 new machines to its network last year, bringing the total to 2,833.
But why are ATMs still so popular, despite the rise of digital banking? The answer lies in their convenience. With the increasing use of mobile phones and laptops, customers are looking for ways to access their accounts and conduct transactions on the go. ATMs offer a convenient and accessible way to do just that.
According to the Central Bank of Kenya (CBK), the growth in ATMs is driven by the increasing use of technology and stiff competition among banks. The CBK notes that the general increase in ATMs in 2018 reflects the deliberate decision by banks to avail convenience to customers at strategic locations.
But ATMs are not just limited to dispensing cash. Modern ATMs offer a range of services, including cash and cheque deposits, and cardless transactions such as M-Pesa withdrawal. In fact, the CBK observes that since the launch of M-Shwari in 2012, a vast number of platforms offering similar services have emerged, with over 16 million active mobile phone deposit accounts valued at over Sh105 billion.
As the banking industry continues to evolve, ATMs are adapting to meet the changing needs of customers. For example, NIC Bank, which has since merged with CBA to form NCBA, rolled out smart ATMs called NCR Interactive teller that allow customers to talk to a live remote teller. The video teller machine augments in-person teller services, allowing customers to speak to a remote live teller and seek their assistance to complete over 90 percent of all branch transactions.
Despite the rise of digital banking, ATMs remain a crucial part of Kenya's banking landscape. As the CBK observes, the accelerated adoption of ATMs has caused churn in the existing stock as most banks have moved to replace old machines with new deposit-taking terminals.
According to a September 2018 Customer Service survey by the Kenya Bankers Association (KBA), many customers were yet to warm up to the idea of robots and artificial intelligence and would rather have humans handle their customer service needs. The survey found that 54 percent of customers cited human-centric service as their preferred mode of service.
