By; Julius Wamae Ouma
For many years, growth in Kenya’s financial services sector was driven by physical expansion. Banks competed to grow their branch networks and increase their headcount, with many prioritising scale. However, the underlying economics of banking have evolved, with today’s customers demanding performance, seamless service, faster responses, and meaningful access — rather than a mere physical presence.
As a result, restructuring physical presence has become a critical element for forward-looking banks seeking to align with new market realities. When implemented effectively, branch restructuring enhances speed of service, accountability, and relevance to the customer — key drivers of a stronger balance sheet, profitability, and cost efficiency.
Achieving this transformation requires a careful re-evaluation of distribution models. Across Kenya, mobile money and agency banking have revolutionised how customers consume financial services. While physical infrastructure still matters, it must now integrate seamlessly with digital platforms and community-based channels. In this environment, a smaller, smarter, and more agile network often delivers better results than a larger, rigid one. Accessibility and ease of transacting — rather than geography alone — now define proximity.
Faulu Microfinance Bank provides a strong example of this shift. Over the past 18 months, the Bank has invested heavily in digital-first transformation, expanding online services to reach more customers nationwide. By realigning its distribution channels and strengthening its agency network of over 70 outlets, Faulu has improved convenience for traders and small businesses alike. As a result, post-restructure, the Bank has grown customer deposits and more than halved its losses in the first half of 2025 compared to the same period in 2024 — demonstrating the tangible benefits of a leaner, more agile operating model.
Equally important is rethinking human capital. Banks can no longer rely on rigid hierarchies and siloed teams. Success increasingly depends on empowering agile, tech-savvy professionals who can make decisions closer to the customer. As automation takes on more routine tasks, the real differentiator becomes the ability to solve problems and deliver value in real time. Faulu has rolled out digital tools such as the Digital Field Agent Tool, enabling staff to provide banking services directly at customers’ premises — a key part of this evolution.
However, any restructuring must remain grounded in customer outcomes. Internal changes often fail when they do not translate into a better client experience. Streamlined structures, smarter systems, and lower costs only matter if they lead to faster onboarding, simpler transactions, and greater trust. The essential question today is not whether a process is efficient, but whether it better serves the people it was designed for.
Even as banks innovate, competition in the financial sector continues to intensify. Fintechs, mobile operators, and other non-traditional players are offering services that rival — and often outperform — those of traditional banks. These challengers benefit from their focus, agility, and freedom from legacy systems or institutional inertia.
Against this backdrop, banks that delay restructuring risk falling behind, losing market share, and facing rising costs of transformation. Those that act early, with clear goals and disciplined execution, stand to gain both efficiency and renewed relevance.
[The writer is the Chief Executive Officer of Faulu Microfinance Bank].
