Older bank customers have not fully embraced digital banking unlike the youths, forcing banks to continue with brick and mortar expansion.
Forty-two percent of adults above the age 24, have only a mobile account compared to 49 percent of those below the age of 24 as per The Global Findex Database published by the World Bank.
Bank account ownership has remained flat among the older age group over a period of three years at 16.6 million, while that among the younger ones has declined by 5.1 percentage points to 14 million over the same period.
Four of the top-tier banks in the country opened 54 new branches last year, underlining their dilemma with the older generation, who are yet to fully go digital.
Banks that have increased their branches are Equity, Cooperative, NCBA and I & M. The decline in account ownership among the youths follows increased use of mobile accounts, with research showing over 80 percent of them preferred receiving their wages on phones.
Increased use of mobile accounts to receive money has resulted in them being preferred for holding savings.
Data showed the number of people exclusively holding their savings with mobile accounts increased to 32 percent in 2024 from approximately 22 percent in 2021.
The number of those who were exclusively saving with banks decreased to 4 percent in 2024 from 8 percent in 2021.
Banks have been aggressive in investing in IT platforms that interact easily with mobile money accounts in a bid to take advantage of the digital platforms in order to reduce costs associated with physical branches.
Banks have however, continued to open traditional physical branches despite huge investments in digital platforms to cater for those yet to transition to e-wallets.
The older age group is the holder of bulk deposits, which lie in the account longer than young adults whose spending is higher on lower income.
Older generations are more critical of digital platforms and have a preference to personal interaction. Data from the Central Bank of Kenya shows usage of Automated Teller Machines (ATMs) has also been on the decline.
Banks had 2282 ATMs at the end of 2023 having started the year with 2309 ATMs, underlining a decline in the use of automation even as branch numbers grow.
