Despite year-on-year progress in overall Net Sentiment, when diving deeper into the performance of Kenyan banks, it is clear that reputational campaigns are masking operational deficiencies. While reputational Net Sentiment improved by 8 percentage points, operational performance fell by 6.7 percentage points, bottoming out at -31%.
This is according to the latest Kenya Banking Sentiment Index. The annual index tracked over 502,000 public online posts from 1 March 2023 to 28 February 2024, capturing the voices of customers of Absa, Co-operative Bank, Diamond Trust Bank, Equity Bank, I&M Bank, Kenya Commercial Bank (KCB), NCBA Bank, Stanbic, and Standard Chartered.
“The improvement in reputational Net Sentiment indicates that Kenyan banks are investing in their public image, but the decline in operational performance highlights significant underlying issues. This gap between perception and reality can only be bridged by addressing the core operational challenges being faced by the banks,” comments Liska Kloppers, Head of Client Strategy of DataEQ.
While most banks saw improved Net Sentiment scores from 2023, I&M Bank retained its top position, achieving a score of over 45 percentage points higher than its closest competitor. In stark contrast, Kenya Commercial Bank experienced a decline in Net Sentiment, ranking last with a score of -10.1%.
“KCB was one of only two banks to hold a negative Net Sentiment score. The bank saw a spike in complaints in March as Azimio la Umoja coalition leader, Raila Odinga, called for a boycott, describing KCB as an ‘enabler and facilitator of a brutal regime’,” says Kloppers.
Positive sentiment around pricing and fees was driven largely by I&M Bank, which was highlighted by influential authors for offering zero costs on transactions to M-PESA.
“M-Pesa continues to be highly popular among Kenyan consumers, having grown to become a dominant player in the financial landscape. The positivity surrounding zero-fee transactions and fee-less money-sending options highlights the widespread adoption and integration of M-PESA into the daily lives of Kenyans,” says Kloppers.
Customer service remains a major pain point across the industry. Customers frequently reported issues such as unresponsive bank agents, long call centre hold times, and extensive queueing at branches. Additionally, customers expressed frustration at agents’ inability to resolve queries, often being directed to visit a branch, exacerbating their dissatisfaction.
Risk-related conversions grew by more than 10 percentage points across the industry, negatively impacting the Net Sentiment of all banks with Equity Bank and Kenya Commercial Bank most impacted. Downtime remained the biggest driver of risk conversation in 2024, with Standard Chartered registering the highest proportion of these conversations. Digital security and fraud were also significant concerns.
“Despite their best efforts, Kenyan banks continue to face challenges such as cyber security threats, regulatory compliance, and the need to maintain customer trust in an increasingly digital environment. To remain competitive, banks must improve communication regarding technical issues and provide clear timeframes for issue resolution to mitigate downtime risk conversations, especially related to mobile banking apps,” Kloppers concludes.