Kenya’s financial sector, long admired for its role in mobile money and digital banking revolution, now finds itself on the brink of another transformation powered by artificial intelligence (AI).
According to new research presented at an event hosted at iXAfrica Data Centres in Nairobi, over 80% of senior banking executives believe generative AI will be transformative for the sector. Yet fewer than a quarter of banks say they are prepared for the transition. The gap between optimism and readiness clearly shows there is an opportunity and a threat for incumbents as digital-first competitors enter the market.
TechArena attended the event at iXAfrica’s headquarters yesterday, where Akili AI showcased practical demonstrations of AI for financial services. These included automated customer support in Kenyan vernacular languages, instant account opening and loan approvals and AI-driven compliance tools.
Findings from the ABSA Banking Conference in June 2025 underline this tension. 96% of the respondents agreed that AI will be of high importance in the next five years. On the other hand, 78% said they are optimistic about its potential. Yet only 28% considered themselves “mostly prepared” or better. Only 21% said they already have formal AI governance policies in place.
While established banks grapple with legacy infrastructure and regulatory compliance, fintechs and digital-first entrants are free to design AI-native services from the ground up.
Why AI
Generative AI differs from the predictive AI many banks experimented with in the past. Instead of requiring years of data, complex infrastructure and large data science teams, generative AI can be deployed “out of the box.” This enables faster experimentation and lower costs, leveling the playing field for smaller players and speeding up time-to-market for new services.
In practice, AI is already making banking cheaper and faster. Customer acquisition costs for digital banks can be up to 90% lower than for traditional branch-led models. Operational costs of running a digital account are 80–90% lower than servicing it through a physical branch. For consumers, a branch-heavy banking experience can cost upwards of KSh 15,000 annually, while mobile-first alternatives cost less than half.
AI also enables new capabilities: onboarding customers in minutes rather than days, delivering compliance checks automatically and offering 24/7 support in local languages through conversational agents.
The implications go beyond banking. Analysts note that AI could cut the costs of managing cash across the economy, boosting liquidity and speeding up business transactions.
AI can also accelerate financial inclusion. Traditional forms and procedures often intimidate most first-time users. AI-powered chatbots can replace these barriers with simple, conversational interactions in vernacular languages, helping more people access credit, savings, and insurance.
“The AI revolution in banking is not a distant future, it’s happening now,” said Simon Bransfield-Garth, CEO of Akili AI. “Kenyan banks have the opportunity to reduce costs, reach more customers, and innovate in a market that is about to become highly competitive with new AI-native challengers.”
For Snehar Shah, CEO of iXAfrica Data Centres, the enabler is already here: “Kenya has the infrastructure, talent, and market readiness to lead in AI adoption. But the technology is moving at unprecedented speed, and companies need to act today, not tomorrow.”
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