Banking on Survival: Why Kenyan Bank Employees Are Being Pushed to the Edge

Editor's note: In this thought-provoking piece, Benedict Were, a seasoned communication professional, critically examines Equity Bank's dismissal of over 1,200 employees in May 2025 following fraud-related allegations. Beyond the headlines and press statements, we were tasked with investigating the human, institutional, and systemic aspects of Kenya's banking sector in greater detail. He calls for a shift from punitive reaction to sector-wide reform, highlighting the urgent need to restore ethics, dignity, and fairness in the financial industry.

In May 2025, Equity Bank made a startling decision to dismiss over 1,200 employees following an internal audit that identified irregular transactions involving staff M-Pesa wallets and personal accounts. The bank terminated these employees for what it described as gross misconduct. In its statement, Equity Bank emphasized that this action was necessary to uphold integrity and restore customer confidence.

Immediately after reading Mwangi's. Mwangi's press conference, I went beyond the headlines and the carefully crafted corporate narrative to what I believe lies a far more complex and troubling reality. A reality that I want to say we cannot understand through institutional action alone.

I opine that for us to grasp the unfolding in Kenya's banking sector fully, I call the action by Equity Bank a crisis bedeviling the entire banking sector in Kenya and say that we must examine it through three interconnected lenses of the human capital, the institutional, and the systemic nature of such fraud related cases and the picture it paints of our banking landscape.

When pressure breeds vulnerability

It is worth noting that right at the heart of this issue are the people who make the banking industry work: the junior staff, the relationship officers, the call centre agents, and the credit analysts. These are the real foot soldiers who make the daily banking machine move.

Nonetheless, behind those glamorous camera flashes when Mwangi was firing 1,200 service members, there are many who face enormous pressures daily, to make the industry generate so many billions annually. But do you know how much they earn? They live on modest salaries while senior managers rake in billions in bonuses. They have ambitious sales targets, with daily, continuous pressure from their line managers.

They undergo intense regulatory scrutiny, and a rising cost of living leaves many of these bank employees stretched thin. What the industry forgets, or fails to recognize, is that when you combine these pressures with rigid compliance expectations and limited psychosocial support, you create an environment where mistakes are inevitable and, in some cases, where the line between ethical and unethical behaviour becomes dangerously blurred.

Regarding our case, Equity's case, some of those dismissed were reportedly flagged for personal transactions involving as little as KSh 200; yes, a KSh 200 transaction sent someone home. I deeply understand that, as a bank, integrity is paramount. While no bank can afford to overlook fraud, we must ask ourselves if these were truly deliberate acts of deception or symptoms of something driving employees to the point of desperation. Did the bank look into its internal environment to understand the reasons behind such acts?

For many, whom you pay so little and demand so much from them, bending minor rules is not about greed but their acts of survival. You do not pay so little and expect so much. When punitive actions disproportionately target junior staff while leaving institutional culture untouched, the message is clear: accountability flows downwards, not across or upwards. Sooner or later, you will fire another 1,200 or double that, say 2,400.

Institutional blind spots

Our next focus is the institutional level, where much of the dysfunction often originates. Mass terminations might temporarily satisfy shareholders and regulators, but they rarely address the root causes of issues. Organisations still need people to deliver results, and problems like fraud, misconduct, and poor lending practices do not occur in isolation; they arise in environments where governance is weak, incentives are misaligned, and leadership emphasises results over accountability.

As my former supervisor used to say, it takes two to create a problem. In recent years, Kenyan banks have experienced an increase in non-performing loans (NPLs), accompanied by inadequate post-disbursement monitoring and questionable loan approvals. The current NPL ratio of 17.4%, the highest in nearly two decades, not only reflects economic challenges but also highlights how risk and creditworthiness have been managed within these institutions.

While it is encouraging that banks are turning to artificial intelligence and data analytics to detect irregularities, technology alone is not the solution. We must recognise that surveillance without support fosters fear rather than integrity.

Ethical conduct cannot be enforced solely through algorithms; it must be cultivated through leadership, trust, and transparent internal systems. Our institutions need to invest not only in tools but also in people, by training them, providing ethical leadership, and establishing mechanisms that protect whistleblowers and ensure fair recourse for accused staff.

Furthermore, the entire financial sector is facing a systemic crisis of confidence. The industry thrives on trust, which is the currency of any economic system; in Kenya, however, this trust is deteriorating. Key stakeholders, including customers, are becoming wary of banks that seem unstable, opaque, or unfair. Employees, too, are questioning organisations that offer little protection or empathy. Meanwhile, delayed government payments, high inflation, and stringent loan terms are pushing more borrowers into default, creating a dangerous cycle of financial exclusion and rising credit risk.

What we are witnessing is not just a spike in bad loans or a series of personnel issues; it is a sign of a more profound crisis of coherence. We must address these blind spots immediately. Our banks, regulators, and policymakers recognise that the issue extends beyond fraud and bad debt to a systemic culture that is fundamentally flawed. It is about finding a balance between performance and ethics, technology and humanity, and discipline and fairness.

Our next course of action must begin with honest introspection at all levels. At the human level, the banking sector should prioritise staff welfare by reviewing compensation structures, providing mental health support, and offering ethical guidance tailored to real-world dilemmas. At the institutional level, banks must realign incentives, strengthen their risk management frameworks, and reframe compliance as a shared responsibility rather than just a punitive measure.

Finally, at the systemic level, Kenya should promote dialogue around financial sector ethics, develop industry-wide safeguards for employee rights, and recommit to transparency in how credit and capital are extended. We need to shift from retaliation to reform, moving from a reactive to a reflective approach.

The current statistics, showing non-performing loans at 17.4% and 1,200 job terminations, are indeed alarming. However, behind each number lies a person, a decision, and a broken link in the chain that binds our banking system together. To weather this storm and rebuild public trust, our financial institutions must start by restoring dignity and justice within their walls.

The author is Benedict Were, a communication professional with over eight years of experience in strategic communication across corporate and development sectors.

Views expressed in this article are solely those of the author and do not necessarily reflect the official policy or position of TUKO.co.ke.

Proofreading by Asher Omondi, copy editor at TUKO.co.ke.

Source: TUKO.co.ke