The COVID-19 pandemic is the most adverse economic disruption since the 2008-2009 global recession. In many countries, particularly in Europe and America, it continues to largely sustain with the unabating new cases of infection. Even with the glimmer of hope spawned by the approval of various vaccines, various sectors are yet to regain their pre-COVID-19 flourish.
Despite the economic slowdown, the Kenyan banking industry continues to navigate the health crisis, aligning products and services to the demands of the ‘new normal’. Notably, the industry’s pre-COVID-19 ‘’digital readiness’’ has been hailed for preventing the heath crisis from degenerating into a financial crisis.
The 2020 State of the Banking Industry Report showed banks were sufficiently liquidated with strong buffers to contain the economic shock. This has been corroborated by the Central Bank of Kenya Annual Report and Financial Statements 2019/2020, which notes that the industry’s core capital and total capital to total risk-weighted assets ratios were 16.4 percent and 18.5 percent, respectively as of June 2020, above the statutory minimum ratios of 10.5 and 14.51 respectively.
However, the sustainability of traditional banking models continues to be challenged in this ‘new normal’, presenting the question: Did COVID-19 accelerate what has always been possible?