An analysis of the state of mobile phone banking in Kenya : a case of selected Banks in Kenya
Mobile phone banking is a fast growing sector in the banking industry and has become a major global concern. Many banks in the world are trying to take advantage of the technology in mobile phones and introduce the service as means of providing fast and efficient service. Since owning a mobile phone is becoming prevalent, banks in Kenya are trying to adjust themselves to the use of mobile phone banking to serve their present customers. Several banks are introducing the use of mobile phone banking; these include Co-operative bank of Kenya, which has the M-banking, National Bank with the Simple banking, and the Equity bank among others. These banks have services such as easy access to check balances, payment and subscription through mobile phones using Short Message System (SMS). They are also in collaboration with the network providers to offer services such as topping up of credit and payment of utilities. This study sought to establish the state of mobile phone banking in Kenya by determining type of mobile phone banking services that have come up, technologies and marketing strategies used by banks and to assess customer perception on the same. It targeted 15 banks in Kenya that have introduced mobile phone banking services and 150 customers (10 in each of the banks). The study also sought to find out if the banks are fully exploiting the mobile phone services and whether use of mobile phone banking has led to expansion of their clientele base hence increase profitability. The study should assist the policy makers to come up with feasible options and policies on mobile phone banking. It will also act as a basis for further research on mobile phone banking services for banks in Kenya. The sample population was determined using purposive and stratified random sampling. Two questionnaires one for the bank and the other for customers were used to collect data. Data was coded and entered into a computer for analysis through the help of statistical package for social sciences (S.P.S.S). Data was analysed using descriptive and inferential statistics with the help SPSS. Data has been presented in form of tables and graphs. The study has yielded several insights from major initiatives dedicated to offering mobile phone banking services by banks to their customers. It shows that mobile phone banking services are valued by many people in Kenya and, for the mobile phone banking users surveyed, are more affordable than traditional banking. It also shows that early adopters of mobile phone banking are willing to use mobile phone and are using the SMS service as mode of banking. Further, mobile phone banking providers must build greater awareness of their services and must find the right balance between human interaction and technology to appeal to more customers. More important, the study identifies that perceptions about banking, mobile phone banking, and technology are important in determining the rate of adoption. Income alone is not a sufficient indicator. The study argues for a deeper exploration of these perceptions and how they may be used to segment the low-income market.