Money Markets
Commercial banks shed 711 jobs last year due to increased use of technology in customer service. PHOTO | FILE
By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com
In Summary
Commercial banks shed 711 jobs last year due to
increased use of technology in customer service, marking the first time
employment in the industry fell since 2002.
The Central Bank of Kenya
(CBK), in the 2015 annual supervision report, said the number of those
employed by the banks fell to 36,212 by the end of last year from 36,923
in 2014.
With the fall in staff numbers, the number of
customers per employee rose by 26 per cent, meaning that the lenders
were able to extract more from labour.
“On average, in 2014, one employee was serving 770 customers whereas in 2015 an employee was serving 972 customers.
“On average, in 2014, one employee was serving 770 customers whereas in 2015 an employee was serving 972 customers.
This shows increased efficiency in customer service
as a result of banks embracing technology,” said the CBK in the banking
sector survey report.
Banks have been turning to cost management in order
to improve their profit margins, increasingly pushing customers to
alternative banking channels such as agency and mobile banking as a
means of reducing their personnel costs.
The top 10 banks in Kenya, which collectively
control 72 per cent of the market and 88.2 per cent of the 35.2 million
deposit accounts, collectively cut 518 jobs last year, according to
their respective annual reports.
The fall in staff numbers were in Equity Bank, Cooperative Bank, Barclays Kenya and
Standard Chartered, while KCB, CBA, DTB, CfC Stanbic, NIC Bank and
I&M Bank all increased their number of employees, although at a
slower rate than their top counterparts cut theirs.
Equity cut the most jobs during the year at 647,
followed by Cooperative Bank at 502. StanChart and Barclays reduced
their workforce by 167 and 40 respectively.
Equity Bank
Equity Bank attributed the job losses to “natural
attrition”, a consequence of its decision to freeze staff recruitment
three years ago as it shifted towards the agency banking model.
Cooperative Bank has also been looking to shift
customers towards the alternative banking channels, and last year
started stationing agents inside its branches hoping to eventually woo
customers from banking halls.
“The number of transactions happening in branches
have now declined by over 33 per cent while Mco-op cash, agent and
Internet banking transactions have increased by 65 per cent, 46 per cent
and 297 per cent respectively,” said Cooperative in its 2015 annual
report.
StanChart’s job cut was initiated by its parent
company in London, Standard Chartered Plc, which has said it will
eliminate 15,000 jobs worldwide by 2018.
As a result of the job cuts, the banks were able to reduce the contribution of employee costs to total expenses from 27.2 per cent in 2014 to 24 per cent last year, in spite of the actual staff costs increasing by Sh2.2 billion.
As a result of the job cuts, the banks were able to reduce the contribution of employee costs to total expenses from 27.2 per cent in 2014 to 24 per cent last year, in spite of the actual staff costs increasing by Sh2.2 billion.
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