Equity Bank has set its sights on a new breed of affluent clientele by introducing customised relationship and banking service. The branch-based venture christened supreme banking targets high net worth individuals.
The lender opened its first exclusive branch in 2013, but has since grown them to 16, stepping up the industry’s race for deep-pocketed clients. Customers are required to maintain a minimum deposit of Sh200,000 to qualify for “supreme banking.”
The ultra-high net-worth segment, which caters mainly for Small and Medium Enterprises (SMEs) and corporates, offers the highest revenue contributions from loans and a perceived differentiation from other banks, according to the bank’s CEO James Mwangi.
“We have digitised the bulk of loan process. Currently, 92 percent of all loan transactions are processed virtually. Branches are left with only eight percent of loans in numbers, but that contributes 77 percent of the total volume of loans transacted,” says Mwangi.
The branches have classy lounges with free Wi-Fi internet, customers have personal relationship managers and a choice to operate their accounts in the local currency or any of the major global currencies including the US dollar, British pound and Euro. They also enjoy extended banking hours during weekdays as well as weekends.
Equity officially joined the bandwagon of banks rolling out the carpet for the rich with the supreme rollout in 2013, but has struggled to shed off the initial tag of the bank for gumboot donning rural masses.
Having made a name for banking the bottom of the pyramid, Equity’s foray into corporate and high net worth end of the market has come in measured steps that have over time put it head-to-head with rivals such as Kenya Commercial Bank, Standard Chartered and Barclays, which pioneered premium bank branches in Kenya.
The bank started off as a building society and was granted a licence by the banking regulator in 2004 to operate as a commercial lender.
Mr Mwangi fashioned Equity as a mass market retail lender with no monthly charges on bank customer accounts, zero minimum operating balance, ledger fees or account maintenance fees.
The positioning saw it grow rapidly to Kenya’s biggest lender by client numbers with a total of 8.6 million customers, accounting for nearly half of Kenya’s depositors. Private banking solutions with sleek halls and personalised services are targeted at wealthy customers who don’t want the hassle of queuing for services.
Mwangi says there was a lot of fear about what would happen to the branches when the digital revolution set in, but adds that the branches have now become centres serving SMEs and corporates.
“They’ve become centres of value addition banking, wealth management and advisory services. The branches are now doing high value banking. We didn’t need to remove, but reshape the branches and retrain the staff to do a different kind of banking,” Mwangi said.
“In a way we’ve created two banks-an SME corporate bank and a transaction bank. Transaction bank is virtual and digitised and the SME corporate bank is still at the branch dealing with high value transactions.” Mwangi says the lender’s staff were retrained and turned into a sales force and relationship managers. “That is why there was no retrenchment at Equity when others were retrenching,” he added.
Equity’s focus on the ultra-wealthy segment comes amid a push from the lender to expand its digital footprint that saw it introduce a banking application called Eazzy banking last year. The lender is projected to add up to five more Supreme branches in the next two years.