Why co-shared spaces could be the future of Kenya's banking sector

For long, banks have built their businesses by being either overprotective or borderline secretive, which has, at most times, limited access.

Mean-looking uniformed officers would stand guard at the door, while meaner-looking private security would watch your every move while inside.

Then came digital banking, and the footfall reduced. Some banks opted to close a number of their branches, and others that were embracing an aggressive expansion spree became cautious.

However, the need for banks to continue protecting their clientele and cementing their footprint insists that physical presence is critical. How then does a bank run a physical branch when close to 100 per cent of its services are online?

Equity Group, Family Bank and I&M Bank are some of the major financial institutions that have been re-examining how to creatively expand amid the digital age of banking.

While Family Bank has opened new branches, it has been relocating others to strategic locations to get closer to customers.

But while other banks agonise over the perfect model, Standard Chartered seems to have cracked the code of using the co-shared space model – a model that breaks the perceived defences of banking business to make it more welcoming, a move that may improve physical footprint.

On Wednesday, the bank opened its second co-shared space in Nanyuki, Laikipia County, where ArtCaffe, an eatery franchise, also serves its customers. The first is located in Nairobi’s Upper Hill area and was opened in 2021.

“Over the years, that business has gained momentum. We have been able to attract new potential clients,” says Standard Chartered Head of Wealth and Retail, Kenya and East Africa, Edith Chumba.

She says the idea behind the Upper Hill branch was to target employees and the business community who would show up at the café for meals. While having coffee, they would then get to interact with the bank’s relationship managers.

“If you look at our footfall in our physical branches, the number has dropped significantly. We serve 95 per cent of our clients through alternative channels – ATMs, digital platforms and cash deposit machines,” she says. “The ones that come into our branches want that quiet moment. They want to spend time with our relationship managers discussing much more complex and deeper needs.”

Ms Chumba says anyone in business today cannot thump their chest that they can hack in on their own.

“Serving coffee is not our thing, but we know the clients we serve have a need for coffee. You have to look for relevant partners who would service the needs of your clients that relate to what you are also looking for from a business perspective,” she says.

The thinking behind this model is what the bank is banking on to provide a refreshed look to its physical presence, considering that sometime back it closed its Nyeri and Meru branches, with customers being served online.

Ms Chumba says the partnerships in the pipeline will go beyond coffee shops.

“Despite the fact that we have made investments in our technology and virtual platforms, we believe our relationship managers remain a key part in our service delivery, particularly when it comes to delivering our wealth management services,” added StanChart Head of Wealth and Retail Banking, Africa, Bongiwe Gangeni.

In the case of Family Bank, the institution is implementing a branch optimisation strategy. This involves opening physical branches in markets that are underserved and relocating some to areas that are more prime for business.

In mid-January, the bank relocated its Utawala branch to Mustard Seed Plaza, making it the fifth relocation under the optimisation strategy. Chief Executive Nancy Njau explains that this move is aimed at enhancing customer convenience, with 92 per cent of the bank’s transactions being done digitally.

“Over the last year, and in line with our five-year strategy, we have undertaken several branch relocations across the country to ensure our physical network continues to reflect our customers’ evolving needs,” she said during the launch of the branch.

“The relocation of the Utawala branch is a continuation of this deliberate strategy to enhance accessibility, efficiency, and overall customer experience.” Other branches that have been relocated are: Eldoret West, Kangemi, Kisii and Ngara. However, the bank also opened a new branch in Kilifi County last year.

Like Family Bank and Standard Chartered, Equity Bank’s transactions are also almost 100 per cent online. From the bank’s half-year 2025 financial statements, less than two per cent of the transactions are done through physical branches. It is an agony that Equity Group Holdings Chief Executive James Mwangi has expressed even as he insists that physical branches are still vital, particularly for branding purposes. And for this reason, his plan is to continue opening more.

“We have to really look for uses of branches,” said Mwangi during the release of the bank’s 2025 half-year financial statements.

“Branches are no longer relevant for transaction business; we need to look at how we can innovatively and creatively have the fixed cost channels start generating revenue.”

Mwangi explained that the reduction in physical footprint in banks is the reason why Equity Group Holdings has a technology subsidiary, a complementary business that is riding on the brand.

He says the business has gone digital and even third parties – whether it’s agents, merchants, all those electronic platforms with a back office that is digitised – have adopted technology. As such, brick and mortar contribute just 1.8 per cent of transactions.

I&M Group is also keen to grow its regional footprint, which means opening more branches. Rwanda is one of the markets where the bank seeks to grow its retail business after being primarily corporate-centred.

Chief Executive Kihara Maina says the bank spent 10 per cent of its total capital expenditure on technology, which saw the digitally active customer base grow to 86 per cent as at the end of June 2025.

Maina explains that since the bank was concentrated in the corporate segment of the market in Rwanda, not much infrastructure was needed to get that footprint.

He adds that for corporate banking, one only needs ‘really good coverage teams and to make investments in technology’.

“However, if you start expanding into the micro, small and medium enterprises (MSMEs), personal (banking) space, you must build up branch networks, teams, and that comes with investment that has been happening over the past few years,” he said.