Influence of Competitive Strategies on Adoption of Internet Banking in Commercial Banks in Machakos County, Kenya
Muthenya, Stephen Mutune
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Technology has ushered in a regime where non-bank businesses are providing new options for safe guarding and managing the finances of customers, so dependency on banks will only be guaranteed if the banks can provide services and value that cannot be sourced elsewhere. In Kenya, the banking industry is made up of various categories of banks ranging from commercial to microfinance banks. The quick growth in number of banks in Kenya is attributed to swift tempo of economic development favoring economic liberalization thus making the banking industry highly competitive. Therefore, banks are looking for strategies to enable them compete favorably in highly competitive marketplace. Internet banking enables customers to browse essential bank products and services seven days a week, 24 hours a day, through their personal computers and smart phones. The study aimed to evaluate the influence of competitive strategies on adoption of internet banking in commercial banks in Machakos County. The specific objectives of this study were:to determine the influence of differentiation strategy on adoption of internet banking in Commercial Banks in Machakos County; to establish the influence of cost leadership strategy on adoption of internet banking in Commercial Banks in Machakos County and to find out the influence of focus strategy on adoption of internet banking in Commercial Banks in Machakos County. This study adopted a descriptive survey design. The researcher drew his population from selected Commercial Banks in Machakos County, 8 in number with a total population of 243 staff members (both managerial and clerical). Due to the small population size, a complete census was carried out. A semi- structured questionnaire was used to collect primary data. Secondary data was collected by use of a data collection form. The relationship between the dependent variable (Y) and the independent variables (X) was tested using multiple linear regression model. Content validity was tested by use of professionals and experts in the field of internet banking while reliability of the test instrument was tested using Cronbach alpha method as a measure of internal consistency. Both descriptive and inferential statistics were used to analyze data. Frequency tables, percentages and means were used to present the findings.The study found that bank services with speedy and efficient platforms, user friendly platforms, platforms which are technologically enhanced, products and services with enhanced security settings contribute to adoption of internet banking.The study also revealed that bank’s focus on foreign exchange, paperless banking, mobile banking, corporate clients and digital payment greatly improve internet banking adoption. It also found out that banks that do not charge for fast paced internet banking services, have pricing that is devoid of hidden charges, pricing those factors in product and service quality and have adopted cost cutting measures have a significant impact on adoption of internet banking. The study recommends use of speedy, customer friendly and technologically enhanced platforms with enhanced security settings. Focus on foreign exchange, paperless banking, mobile banking, digital payments and concentration on cooporate clients. Having products that are devoid of hidden charges, pricing that factors in product and service quality, avoidance of charges for fast paced internet services and adoption of cost cutting measures in an endevour to increase adoption of internet banking.