Equity Bank’s Digital Banking Products Gain Further as Income from Loans Takes a Hit

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The banking sector as a whole, is one that has hit the headlines with all sorts of fintech announcements. From the recent one with CBA announcing their Loop product targeted at “millenials and the tech-savvy”, to the Kenya Bankers Association’s PesaLink system aimed at negating M-Pesa’s current hold on banks.

The trend here is, moving away from traditional methods of banking, that of visiting branches and spending a considerable amount of time queueing, to a more digital way of banking. Almost every bank, if not all entirely, have a  mobile app to help reduce the number of trips their customers make to the bank (the quality of the app is a story for another day).

Equity today announced their 2016 financials and it was not surprising to see that the bank’s digital products such as EazzyApp and Equitel, outshine other products offered by the bank. Income from loans, which is the mainstay of banking, took the biggest hit, as the bank registered a 1 percent drop from KES. 269.9 Billion in 2015 to KES. 266.1 Billion in 2016. The Bank CEO, James Mwangi explained this is because they focused on the less risky government securities as opposed to the high risk loans in other sectors such as agriculture.

There was also a clear trend in the preference of Equity customers to lean towards the digital platforms as opposed to traditional platforms in banking. Equitel saw a total of 227.4 million transactions made in 2016 up from 94.3 million transactions in 2015. ATM and Bank branch transactions stood at 24.8 million and 20.4 million, respectively,  down from 30.4 million transactions over the ATM and 23.8 million branch transactions. Agency transactions (Equity Agents) also saw a rise from 51.3 million transactions to 61.9 million transactions.

Equitel disbursed a total of 38.5 billion shillings over a period of one year. Which saw 2 million to 6.3 million customers reached by mobile lending within a year. EazzyApp, which was launched just the other day, accounted for a total of 10.2 million shillings in transactions up from 5.5 million last year.

Interestingly, Equity bank reported that PayPal accounted for 27% of all income from international money transfers, ahead of MoneyGram (18%) and coming second to Western Union, which accounted for 47% of all international money transfers.

Following this revelation, Equity Bank has created an office of the Director of Innovation within the CEO office. The bank claims to have innovated in convenience, and they hope that this new office will propel their convenience innovation further.

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