Kenyan banks can grow revenue beyond traditional accounts by expanding into insurance, agency banking, embedded finance, and regional lending. This shift matters because interest margins have narrowed, government security yields have softened, and the Central Bank of Kenya’s new revenue-based licence fee structure adds further pressure. Moreover, customers increasingly expect more from a banking relationship.
In response, Kenyan banks are pursuing ‘beyond banking’ strategies that broaden their revenue mix through insurance, wealth management, transaction-based services, and regional expansion. For lenders willing to rethink the traditional banking model, the opportunity lies in building deeper customer relationships.
Expanding Non-Interest Income Streams
Kenyan banks are growing non-interest income through transaction fees, card charges, and other services as interest margins narrow. The Central Bank Rate has held near 8.75%, keeping lending growth cautious and pushing banks to diversify.
Listed banks reported mixed non-funded income performance through 2025 and into 2026, with some posting double-digit growth in fees and transactional income, while others recorded a slight dip. SBM Bank Kenya grew its non-funded income by 54% in the first half of 2026, driven by stronger transaction volumes. Much of this growth ties back to the adoption of digital banking in Kenya, including card fees, digital transaction charges, and trade finance commissions. Banks that treat fee income as a core strategy are better positioned to absorb regulatory costs, such as CBK’s new revenue-based licensing fees.
Bancassurance and Wealth Management as Growth Levers
Bancassurance and wealth management let Kenyan banks earn commission and advisory income from customers they already serve. Premiums sold through banks grew from about 19.5 billion shillings in 2019 to roughly 35 billion shillings in 2023, lifting bancassurance’s share of total industry premiums from 8.4% to 10%.
With insurance penetration in Kenya still below 3% of GDP, banks have room to expand life, health, and asset cover through existing branch and mobile channels. NCBA’s 2024 acquisition of AIG Kenya shows how far some lenders can go, moving from distribution partner to product owner. Wealth management follows a similar path, since banks that hold deposit and transaction data are well placed to offer advisory services, unit trusts, and retirement products to customers who trust them with their savings.
Embedded Finance and Open Banking Partnerships
Embedded finance and Banking as a Service (BaaS) let Kenyan banks earn fees by powering financial products built by other companies.
Under embedded finance and Banking as a Service (BaaS) models in Kenya, a licensed bank supplies the regulated infrastructure behind a fintech app, retailer, or payroll platform and earns a fee for every transaction that flows through it.
The Central Bank of Kenya published a draft open banking framework in March 2024, built around REST APIs, secure authentication (e.g., OAuth 2.0) and ISO 20022 messaging standards, with full compliance expected by December 2026. This regulatory push formalises a model many banks have already tested informally through mobile money integrations, and it rewards banks that build reliable, well-documented APIs early.
Agency Banking and Transaction-Based Revenue
Agency banking generates transaction-based revenue by enabling Kenyan banks to reach customers through agents without opening new branches. Since CBK introduced the model in 2010, the network has grown from a few thousand outlets to tens of thousands of agents handling deposits, withdrawals, bill payments, and loan disbursements on behalf of banks.
Each transaction carries a small fee, and at national scale these fees add up to meaningful income. Agents also serve as merchant touchpoints, and banks that link agency networks to merchant payment systems and mobile money rails capture additional commissions on every swipe, transfer, or payment. This turns routine transactions into a steady, low-risk stream of income.
Regional Expansion and Digital Lending Opportunities
Regional expansion and digital lending let Kenyan banks earn income beyond domestic interest margins. Equity Group’s regional subsidiaries in the Democratic Republic of Congo, Tanzania, and Uganda contributed 46% of the group’s banking profit in 2025. Digital lending is thus expanding at home. The Central Bank of Kenya licensed 25 additional Digital Credit Providers on July 14, 2026, bringing the total number of approved operators to 252, with regulated lenders disbursing over 150 billion shillings across 8.37 million loans.
Building a Sustainable Revenue Strategy for Kenyan Banks
A sustainable Kenyan bank revenue strategy blends several income levers instead of relying on one:
- Strengthen bancassurance and wealth advisory teams so cross-selling feels like service, not a sales pitch
- Invest in embedded finance partnerships and Banking-as-a-Service (BaaS) infrastructure in Kenya ahead of the CBK’s 2026 open banking deadline.
- Price agency and merchant transactions based on the value delivered, rather than focusing solely on cost recovery
- Leverage regional subsidiaries and licensed digital lending to diversify earnings beyond Kenya’s domestic economic cycle
Banks that sequence these moves deliberately tend to build revenue that holds up when rates move against them.
WFIS Kenya Welcomes Banks Ready to Grow Beyond Traditional Accounts!
The World Financial Innovation Series (WFIS) in Kenya engages with banks and financial institutions navigating the shift towards diversified, fee-generating revenue models. This transition reflects broader changes across the financial sector, including thinner interest margins, evolving regulation, and increasingly demanding customers.
As Kenya’s financial ecosystem evolves, institutions are exploring new ways to deepen customer relationships, build non-interest income, and respond to growing competition from fintechs. With CBK’s open banking framework taking shape, the ability to develop scalable partnerships, embedded finance capabilities, and customer-centric revenue streams will become increasingly important.
Taking place on 2 March 2027 at the Edge Convention Centre, Nairobi, the event will bring together senior decision-makers from banking, insurance, microfinance, and financial technology to explore embedded lending, open banking governance, and practical approaches to building responsible, contextual financial products.
Frequently Asked Questions
What does ‘beyond banking’ mean for Kenyan banks?
‘Beyond banking’ means Kenyan banks earn revenue from insurance, embedded finance, agency transactions, and regional lending, not just deposits alone.
How does embedded finance work in Kenya?
Embedded finance enables banks to provide licensed infrastructure, allowing fintechs and platforms to offer payments, credit, or accounts under their own brand.
What is Banking as a Service (BaaS)?
Banking-as-a-Service enables non-bank companies to use a licensed bank’s systems and infrastructure to launch new financial products quickly.
Why is bancassurance growing among Kenyan banks?
Bancassurance is growing because banks already hold customer trust and transaction data, making it easy to cross-sell insurance products effectively.
How does digital lending support bank revenue?
Licensed digital credit providers in Kenya now disburse billions in short-term loans, adding fees and interest income for banks.