Kenya’s Banking Sector at AI Tipping Point as New Report Reveals Major Readiness Gap

Kenya’s financial sector, a celebrated global pioneer in mobile money, is standing on the precipice of a new technological revolution driven by artificial intelligence that promises to redefine the very nature of banking. While the nation’s banking leaders overwhelmingly recognize the transformative power of AI, a significant gap between ambition and preparedness leaves the door wide open for a new wave of nimble, AI-native digital banks to disrupt the status quo.

According to new research from AI solutions company Akili AI, the potential for disruption is staggering. A survey of senior management and board members from Kenya’s leading banks revealed that over 80% agree generative AI will be transformative for the industry. Further data from a June 2025 conference highlighted that 96% of banking respondents believe AI will be of high importance over the next five years.

However, this optimism is contrasted by a stark lack of readiness. Akili AI’s research shows just 20% of banks feel “prepared” or “fully prepared” for the AI transition. Complementary survey findings show only 28% of industry leaders consider their institutions “mostly prepared” or better, and a mere 21% have formal AI governance policies in place. This “readiness gap” creates a critical vulnerability for established players as new competitors enter the market with fundamentally different and more efficient business models.

The core of this disruption lies in economics. According to Akili AI and iXAfrica Data Centres, the cost for a fully digital bank to acquire a new customer can be less than one-third that of a traditional bank. The cost savings are even more dramatic in ongoing customer management, which can be under one-fifth of the legacy model. Some AI-driven models can make customer acquisition up to 90% cheaper than traditional branch-based methods. This efficiency allows new entrants to operate with dramatically lower cost structures, reach underserved populations, and scale rapidly.

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“The AI revolution in banking is not a distant future, it’s happening now,” said Simon Bransfield-Garth, CEO of Akili AI, at an event held at iXAfrica’s Nairobi headquarters. “Kenyan banks have the opportunity to embrace AI to reduce costs, reach more customers, and innovate, in a market that is likely to become increasingly competitive with new digital entrants, including AI-native challengers”.

At the event, the two companies demonstrated next-generation AI applications that translate these cost efficiencies into tangible customer benefits, including automated customer service in Kenyan vernacular languages, instant account opening, and loan approvals in minutes instead of days.

The technology enables a new paradigm of “hyper-personalized” finance, where AI models can analyze a customer’s digital footprint – from spending habits to social media activity – to offer timely and relevant financial products. It also holds the promise of greater financial inclusion; AI-powered chatbots can replace complex forms with simple, conversational interactions in local languages, breaking down barriers that have historically excluded many from the formal banking system.

For incumbent banks burdened with expensive branch networks, the pressure to adapt is immense. The danger is that a failure to adopt generative AI quickly could leave them unable to compete on cost and accessibility.

“We have the infrastructure, talent, and market readiness to lead in AI adoption in Kenya, but AI is moving at unprecedented speed and action is needed by companies today, not tomorrow,” said Snehar Shah, CEO of iXAfrica . iXAfrica’s data centers provide the high-density, low-carbon power infrastructure essential for running these advanced AI workloads.

The path forward for traditional institutions involves a shift in mindset away from a “fast follower” approach, which may no longer be sufficient given the rapid pace of change. Experts suggest starting with specific business needs – such as automating customer onboarding or document checking – and implementing proof-of-concept solutions to demonstrate clear returns on investment before wider deployment. As Akili AI’s briefing note concludes, AI will not just optimize banking in Kenya; it will redefine it, and the next five years will determine who leads the charge and who gets left behind.