Banks Must Adopt New Service Models to Stay Competitive
By Julius Wamae Ouma
For years, Kenya’s banking growth story was driven by physical expansion. Banks raced to open branches, hire more staff, and establish presence across the country. But today’s customers are changing the game. They want speed, convenience, and meaningful access, not just buildings.
This shift has forced many banks to rethink how they deliver value. Restructuring physical presence is now a strategic priority for forward-looking institutions. Done well, branch transformation enhances service speed, accountability, and relevance, key ingredients for profitability and a healthier balance sheet.
To achieve this, banks must reassess their distribution models. Mobile money and agency banking have already reshaped how Kenyans interact with financial services. While branches still matter, they must now integrate seamlessly with digital and community-based platforms. A smaller, smarter network often delivers better outcomes than a large, rigid one. Today, accessibility is defined not by geography but by how easily and quickly customers can transact.
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Faulu Microfinance Bank offers a strong case study of this evolution. Over the past 18 months, Faulu has invested heavily in a digital-first approach, expanding online services and strengthening its agency network of more than 70 outlets nationwide. The result has been increased convenience for traders and small businesses, along with a significant improvement in financial performance. The bank has more than halved its losses in the first half of 2025 compared to the same period in 2024, demonstrating the benefits of a leaner, tech-driven model.
Human capital is another pillar of this transformation. Banks can no longer rely on rigid hierarchies and departmental silos. Success now depends on agile, tech-savvy teams empowered to make decisions close to the customer. As automation takes over repetitive tasks, real value comes from problem-solving and personalized service. Faulu has introduced tools such as the Digital Field Agent system, enabling staff to deliver banking services digitally at customer premises, a practical example of how technology empowers human interaction.
Still, every structural change must begin and end with the customer. Internal efficiencies mean little if they do not translate into better experiences, faster onboarding, easier transactions, and greater trust. The key question is not how efficient a bank is, but how well it serves the people who depend on it.
As competition intensifies from fintechs, mobile operators, and other digital challengers, traditional banks can no longer rely on legacy systems or reputation alone. These new players are leaner, faster, and often more innovative. Banks that delay transformation risk losing relevance and market share. Those that act decisively, guided by clear goals and strong execution, will emerge stronger and more competitive in the years ahead.
The writer is the Chief Executive Officer at Faulu Microfinance Bank.
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