Recent trends suggest Kenyan banks continue closing ATMs as they expand their branch network, reflecting a shift towards alternative digital and agency banking solutions to meet customers' cash needs.
According to the latest annual report from the Central Bank of Kenya (CBK), ATMs dropped by 19 last year, bringing the total down to 2,282 from 2,301 in 2022. Meanwhile, bank branches increased by 36, reaching 1,511 from 1,475 over the same period.
The CBK attributes the decline in ATMs to the growing adoption of agency, mobile, and digital banking services. "The number of ATMs decreased due to the adoption of alternative banking channels in the banking industry," the report states.
Throughout last year, banks optimized the deployment of ATMs, adding and removing machines as needed. The most significant additions occurred in July 2023, with 43 new ATMs installed, while December 2023 saw the largest reduction, with 23 ATMs taken out of service.
Over the past decade, the rise of agency and digital banking has shifted many traditional banking functions away from ATMs and branches.
ATMs, which primarily offer cash withdrawal services, have been upgraded to handle cash and cheque deposits. Meanwhile, bank agents serve as mini-branches, providing services close to customers' homes or workplaces.
In 2023, banks added about 4,409 agents, totalling 82,780. The top retail banks with millions of customers, such as Equity Bank Limited, KCB Bank Group Kenya, and Co-operative Bank of Kenya, accounted for over 90% of these agents. These agents offer various services, including cash deposits, withdrawals, bill payments, balance inquiries, and fund transfers.
As Kenyan banks continue to adapt to the evolving financial landscape, the reduction in ATMs and the rise of digital and agency banking reflect the growth of financial inclusion in the East African nation and the industry's efforts to provide more convenient and accessible services.
