KPMG East Africa Partner and head of banking sector Joseph Kariuki
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Thousands of bank jobs could be wiped out as employers prioritise automation and cost-cutting measures to boost profits.
Latest industry findings by advisory and consulting firm KPMG show that banks would rather automate than upskill persons undertaking some roles.
The global industry report shows that 38 per cent of the surveyed banks are looking at process automation to drive their profits, which is closely followed by 37 per cent who would rather digitise key functions to achieve the same goal.
Upskilling their workforce to meet new market demands is not a priority of the lenders with only 31 per cent of employers in the banking sector looking at it as a viable option when targeting productivity and profit growth.
“Most banks could probably achieve a 10 per cent reduction in costs through blunt ‘cost-out’ targets or by applying AI to discrete processes. Cutting costs by 20 or 30 per cent, however, will require significant operational transformation,” said KPMG’s global lead for banking cost transformation Owen Lewis.
Other cost levers identified by the report include reducing the cost to serve customers, reimagining business processes, and lowering acquisition costs.
According to the report, 82 per cent of banks plan to reduce their cost base by at least 10 percent by 2030, with nearly a third targeting cuts of more than 20 per cent.
This push is expected to be powered largely by automation, intelligent workflows and the wider use of artificial intelligence.
In Kenya, where banks like KCB, Equity and Co-op have been aggressively digitising services, the trend could reshape how financial institutions hire and manage staff.
Traditional teller and call centre roles face the highest risk, while demand is expected to rise for technology, analytics and cybersecurity specialists according to a latest central bank of Kenya report.
The global report warns that while automation delivers immediate savings, failing to balance it with workforce upskilling could create longer-term gaps in capability and resilience.
“Focusing on automation alone may deliver short-term wins but risks leaving organisations without the skills needed to sustain transformation,” the study notes.
KPMG partner financial services Jörg Fehrenbacher says that one area of particular focus for process optimization is around the customer.
Banking leaders say they expect to achieve significant cost savings by reducing the cost to serve customers and their customer acquisition costs, suggesting banks will be prioritising processes that touch the customer, along with changes to their distribution and channel strategies.
“We have seen a lot of transformation programs focused on end-to-end process optimization over the past twelve months. Tellingly, the focus has been not only on digitalising the process, incorporating greater automation and removing manual tasks, but also on cost. The link between operational transformation and cost is clearly top of mind for banks,” said Fehrenbacher.
KPMG East Africa, Partner and Head of Banking Sector Joseph Kariuki, notes that strong governance and leadership are essential to navigating the complexities of transformation.
“Banks with clear strategies and centralised governance structures tend to see significantly better results. Full alignment of cost and transformation goals is crucial, particularly when assessing hybrid approaches that combine digital innovation with traditional banking models,” said Kariuki.
KPMG’s findings suggest that the winners in this transformation race will be those that align automation with customer needs and workforce strategies, rather than relying solely on blunt cost-cutting measures.
Central Bank of Kenya Bank Supervision report for 2024 shows that already the rising use of Artificial Intelligence (AI), which has automated numerous jobs that were previously performed by humans, has led Kenyan banks to reduce their clerical personnel by 5.5 per cent in the year ending December 2024.
However, other banking roles are still on the rise with management, supervisory, secretarial and other staff cadres increased by 938, 368 and 314, respectively. Large group banks had the largest increase in the total number of staff
