By 
Kenya’s banking sector is entering a new phase of digital maturity, as I&M Bank disclosed that 98% of its customers now transact through digital channels—signaling a shift from user acquisition to revenue optimisation within an increasingly saturated market.
The milestone reflects a broader trend among tier-one lenders, where digital adoption has reached near-total penetration. With over 727,000 customers across five markets and assets valued at KES 668.9 billion ($5.2 billion), I&M Group’s performance provides a strong benchmark for the region’s financial services industry and the evolving RegTech industrylandscape.
Over the past decade, banks have prioritised migrating customers from physical branches to mobile apps, USSD, and online platforms. This transition has significantly improved operational efficiency, reduced costs, and strengthened compliance management systems through enhanced digital tracking and regulatory reporting capabilities.
Today, digital channels dominate routine banking activities, including transfers, bill payments, and balance inquiries. Leading institutions such as KCB Group, Equity Group, and Co-operative Bank of Kenya report that over 90% of transactions occur outside physical branches, underscoring the widespread adoption of compliance technology and digital banking infrastructure.
For instance, Equity Group has indicated that more than 95% of its transactions are processed digitally, with KCB reporting similar levels across its mobile and internet banking platforms.
Commenting on the bank’s performance, I&M Group CEO Kihara Maina noted that the results reflect the resilience and integration of its operations across multiple markets.
However, as digital adoption peaks, banks are now confronted with a new challenge—how to increase revenue from an already digitised customer base. While transaction volumes continue to grow, competition and pricing transparency across digital platforms are compressing margins, requiring stronger risk assessment and compliance analytics to sustain profitability.
I&M’s latest financial results highlight a strategic pivot toward non-interest income streams. The bank recorded a 31% increase in non-interest income to KES 14.4 billion ($111 million), outperforming overall revenue growth. Additionally, assets under management surged by 223% to KES 99 billion ($764 million), driven by the expansion of wealth management offerings to existing customers.
This shift reflects a growing emphasis on value-added services, supported by compliance automation and regulatory monitoring, as banks diversify income sources beyond traditional transaction fees.
The lender has also enhanced its foreign exchange capabilities through its FX Direct platform and upgraded online trading channels, targeting cross-border transactions and FX flows. These initiatives align with broader efforts to strengthen financial compliance, improve fraud detection, and enhance regulatory compliance monitoring in digital banking environments.
Across the sector, competitors are adopting similar strategies. Equity Group is expanding into investment and insurance services within its digital ecosystem, while KCB Group is deepening its footprint in merchant payments and digital lending following its acquisition of Riverbank Solutions.
These developments signal a transition toward integrated financial ecosystems, where banking apps evolve into comprehensive platforms offering lending, savings, insurance, and payments. This transformation is underpinned by RegTech solutions and compliance software that enable seamless service delivery while meeting evolving regulatory requirements.
As customer growth slows and digital penetration reaches its peak, competition is increasingly centred on “share of wallet” rather than user acquisition. Banks are now focused on maximising customer value through personalised offerings, improved user experience, and stronger compliance management frameworks.
The near-complete shift to digital banking marks a critical turning point for the industry. Going forward, sustained growth will depend on how effectively banks leverage digital infrastructure, optimise revenue streams, and maintain robust regulatory compliance frameworks in an increasingly competitive and transparent market.
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