An Investigation of the Effects of the Alternative Business Channel Diversification Strategies on the Performance of Equity Bank Branches in Nyeri County
Karanja, Nyingi Daniel
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Use of technology and keeping track with updated technology enables an organization to compete favorably in the competitive market. Alternate business channels can give financial institutions superior competitive advantage. The study investigated the effects of the Alternative Business Channel diversification strategies on the performance of Equity Bank branches in Nyeri County. The study aimed at providing solution to problems that would prevent the use of Alternative Business Channels for the gain of superior market share.' Literature review was obtained from previous relevant research studies, scholarly journals, and academic books by several authors, existing theories and other relevant sources. The study adopted a census research design. The census population under study included twenty five (25) management staff and thirty (30) active Equity Bank agents making a total census population of 55. This study was carried out with the administration of questionnaires to the 55 respondents on a drop and later pick basis. Quantitative data was analyzed using measures of central tendency such as mean,mode and median. While qualitative data was analyzed using content analysis. Data was presented using tables, charts and graphs. The findings of this study indicated that all the channels under study affected the performance of Equity Bank in a positives manner. The findings indicated that ATMs to a very great extent, reduced congestion in the banking halls, enhanced convenience levels of the customers by offering 24/7 service and reduced operational cost of the bank. Another significant proportion of the respondents indicated that ATM' s increased revenue generation base and also enhanced the image of the bank. In regard to Eazzy 24/7 it was also found that Eazzy 24/7 encouraged many customers to make their own financial transactions instead of visiting the bank. This in turn enables the bank to gain competitive advantage in the market. The service was found to have created an additional income generating activity for the bank as well as expanding the banking platform to the current and potential customers of the bank. The study also found out that the role of agency banking was regarded highly by the customers as well as by the Equity Bank. It was found from the respondents that agency banking influenced the growth of Equity business by expanding its marketing base, enhanced service delivery, promoted customer outreach program and enhanced capacity utilization at Equity Bank branches. The findings from the study indicated that points of sale have contributed to generation of extra revenues to the bank. This adoption of technology in the banking sector was contributing to enhanced overall performance of the bank. The study therefore recommended that Equity Bank should continue to invest significantly in technology in order to reap from these numerous advantages. New software's, new processes, new products and bench marketing practices will continue to be of critical to the banking industry.