Co-op Bank leads lenders back to physical branches

Co-op Bank

Co-operative Bank of Kenya branch along Parliament Road, Nairobi. Dennis Onsongo | Nation Media Group

Photo credit: Dennis Onsongo | Nation Media Group

What you need to know:

  • Co-op Bank said it is opening new outlets despite migrating 90 per cent of transactions online.
  • Lenders have been saving on cost by rolling back their branch network pushing customers to mobile and online banking platforms.

Co-operative Bank of Kenya has announced it will open seven new branches bringing their total count to 200.

The lender said it will open outlets in Kamakis on Nairobi’s Eastern Bypass, Kabarnet, Iten, Moyale, Mwiki/Kasarani, Bunge at the new Parliament Tower in Nairobi and Kamulu in Nairobi Eastlands.

Co-op Bank said it is opening new outlets despite migrating 90 per cent of transactions online due to the need for service centres for its customers, sacco network numbering 479 countrywide, and 23,000 bank agents who depend on physical outlets for cash management services.

Lenders have been saving on cost by rolling back their branch network pushing customers to mobile and online banking platforms, which are cheaper to operate.

However pulling out of locations may cost banks market share, leave out potential clients and deny them platforms to drive sales.

“The emerging theory that bank branches and ATMs will cease to exist is largely wishful thinking driven by desires to cut brick and mortar costs, and not by credible customer feedback on the service outlets through which customers prefer to be served,” Co-operative Bank Chief Executive Officer Gideon Muriuki said on Wednesday.

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