In today’s banking landscape, the race for low-cost deposits is intensifying—and for good reason. Current Account and Savings Account (CASA) deposits are not just a funding source; they are a strategic asset. With their low interest cost and high stickiness, CASA deposits underpin profitability and financial resilience. For Kenyan banks, the path to growing CASA lies increasingly in one direction: digital innovation.
Digital banking has evolved from a convenience to a competitive necessity. Mobile apps, USSD codes, and online platforms are transforming how customers interact with their banks—enabling seamless payments, transfers, and account management. These tools are not only expanding access but also deepening engagement, which is critical for increasing transaction volumes and reducing account dormancy.
Kenya is uniquely positioned to lead this transformation. With over 40 million mobile money subscriptions and a penetration rate of 77.3% as of mid-2024, the country boasts one of the most vibrant digital financial ecosystems globally. According to the 2024 FinAccess Household Survey, formal financial inclusion has climbed to 84.8%, driven largely by digital onboarding and agent networks. These trends present a golden opportunity for banks to convert digital access into CASA growth.
Faulu Microfinance Bank offers a compelling case study. Through its DigiCash App and E-Banking platform, Faulu has created intuitive digital channels that empower customers to transact with ease. Backed by a KES 900 million capital injection from Old Mutual, the bank is doubling down on digital infrastructure—particularly to support small businesses. This strategy not only enhances customer experience but also generates consistent transactional income.
However, acquiring new-to-bank customers is only half the battle. The real challenge lies in activating and retaining them. This requires a holistic approach: data-driven digital marketing, personalized onboarding journeys, and sustained engagement across channels. Banks must move beyond acquisition metrics and focus on building long-term customer value.
Yet, the digital path is not without pitfalls. As customer journeys become more digitized, the risks to data privacy and cybersecurity grow. A single breach can erode years of trust. Moreover, over-automation risks alienating customers in a market where human interaction still matters deeply. The rapid pace of technological change also demands continuous investment—not just in systems, but in people and culture.
To succeed, banks must strike a delicate balance: embrace innovation while preserving customer-centricity. This means investing in secure, flexible platforms; designing human-centered digital experiences; and fostering agile, innovation-driven teams.
In the end, the banks that will thrive are those that view digital transformation not as a one-off project, but as a perpetual discipline. CASA growth will follow where trust, convenience, and engagement converge—and in Kenya, that convergence is increasingly digital.
By Stephen Ngugi – Head of Finance & Strategy, Faulu Microfinance Bank.