Kenya should be a digital and cashless economy by 2033, Standard Chartered bank has predicted.
According to the new survey, the desire among Kenyans to abandon hard money in favour of wireless transactions and online shopping has only become stronger going by the radical technology advancements and the fatal and lingering COVID-19 pandemic.
The bank also finds that along with the two factors have come transformed spending habits where majority of the consumers studied have tended to be much more rational, cautious and conscientious.
“Almost three-quarters of survey respondents in Kenya (64 per cent globally) agree that COVID-19 has made them more positive about online shopping, but they are also more careful with their spending and want new ways to track their money digitally,” reveals the report.
The study of 12,000 adults across 12 markets – Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US– also finds that respondents in all the markets anticipate doing more of their shopping online from now on.
In fact, for Kenya, while 79 per cent preferred to shop in-person prior to the pandemic compared to 21 per cent online, this has shifted significantly, with more than half (51 per cent) now preferring online payments to in-person, card or cash payments for future purchases.
“At 30 per cent, this is the largest increase in preference for online shopping of any market surveyed. Respondents in the UK, China, the US and Taiwan, while still anticipating an overall increase, are at the other end of the scale, believing their online spending will grow by less than 10 per cent in the future,” notes the survey.
Moreover, Stanchart found that this increase in preference for online payments is true across a range of purchases, from groceries and travel to digital devices.
“As a result, almost two-thirds (64 per cent) of people globally and 60 per cent in Kenya now expect their country to go fully cashless. In Kenya, of those who believe the country will one day go cashless, the average predicted year is 2033,” says the report.
The new reality is further supported by the bank’s ATM withdrawals data which shows that a cross the ten surveyed markets where Standard Chartered offers consumer banking (except the UK and US), COVID-19 has dramatically accelerated the decline in ATM usage.
Confirming the new trend, Standard Chartered Head of Retail Banking Edith Chumba said that cash withdrawals from ATMs are now half what they were two years ago.
“Today, 89 per cent of transactions are being conducted digitally with a 62 per cent and 90 per cent penetration for our retail and corporate clients respectively,” added Chumba.
Moreover, on Kenyans and spending, the Stanchart study found that up to 93 per cent of Kenyans said the pandemic has made them more careful with their expenditure (75 per cent globally), the highest proportion of any country surveyed.
“Reflecting this increased caution, 91 per cent of Kenyan respondents said that the economic impact of COVID-19 has made them more likely to track their spending, with over 80 per cent of Kenyans either using or interested in using budgeting tools or tools that block card-spend over specified limits,” says the report.
In addition, the study found that consumers around the world are now spending more on basics (such as groceries and healthcare) and digital devices than they did prior to the pandemic, and that they expect this increase to continue in the future.
This trend is also reflected in Kenya, with consumers seeing a 58 per cent increase in their expenditure on groceries, a 59 per cent increase in spend on digital devices, and a 39 per cent increase in healthcare expenditure.
At the same time, 80 per cent of people in Kenya say they have spent less on travel or holidays than they did before the pandemic, while 49 per cent have spent less on experiences, and 83 per cent have spent less on clothes.
“As well as increased caution when it comes to spending, consumers are increasingly conscientious. This is good news for small businesses and those producing locally made goods, particularly those making and selling sustainably sourced products,” notes the survey.
This is no different in Kenya as it leads the way globally in increasingly conscientious consumption habits, where 81 per cent of Kenyans say they are now more likely to shop locally (57 per cent globally).
Moreover,75 per cent are more likely to shop sustainably (52 per cent globally) while 70 per cent are more likely to support small businesses locally (50 per cent globally).