Equity Bank CEO James Mwangi. [Photo/zipo.co.ke]
Equity Bank Holdings Plc has begun to change its branches into small business centers following the shift of its financial transaction to other channels. Group CEO James Mwangi said 91 percent of transactions have moved from branches and Automated Teller Machines (ATMs) to variable cost delivery channels of mobile, internet, mobile app, agency and merchant banking.
In the new strategic direction, branches will now become relationship management centers to boost relationship, especially with its huge number of small and medium enterprises (SMEs) clients.
Speaking during the release of the bank’s third-quarter financial results recently, Mwangi said of 341.3 million monetary transactions, only 30.3 million transactions passed through branches and ATMs. He said the rest, 311 million transactions, passed through third-party channels.
This shift in delivery channels resulted in a reduction of 11 percent in staff costs while registering a modest increase of two per in total costs and maintaining a cost-income ratio of 51.6 percent at the group, he explained.
Analysts say pressure on banks’ pricing structures and deposit spreads is leading to the recognition that asset or relationship management is a viable new banking segment.
“Lenders are beginning to comprehend that asset administration will increase non-interest proceeds and external currency incomes.”