E-commerce Uptake and Performance of Commercial Banks in Murang’a County, Kenya.

Abstract

E-commerce uptake in banking is increasing day by day in Kenya. Banks drive for improved performance has fuelled innovation in e-banking. Banks have invested in e-commerce but uptake by users is not commensurate. The purpose of this study was to assess E-commerce uptake and the performance of commercial banks in Kenya, focusing on Murang’a County. Specific objectives examined how Infrastructure level, User skills, Management support and Banking services offered affect performance of banks. Theories of Technology acceptance, Diffusion of innovation and Resource Based view were used as they were relevant to the study. Descriptive research design was applied in this study. Target population was all the banks in Murang’a County. The researcher used stratified sampling to select respondents and ensure representation of all banks. Data was collected, analysed and used to assess e-commerce uptake and the performance of the banks. Infrastructure level, management support and services offered were found to have positive contribution to performance of banks. Stable infrastructure made customers trust the system and continue using. Management who supported innovation worked towards ensuring the same reach the users through marketing structures. Where banking services offered online were efficient and reliable, the users would not come to banking halls. Banks with the above three steady reported less customers visiting the banking halls, excited customer experiences and further marketing by members through word-of-mouth. User skills was found to contribute the least to performance due to laxity in uptake of e-banking. Some customers admitted they are aware of the availability of the services but they embrace technology when they plan to, and not when it is marketed to them. The study concluded that Infrastructure level, Management Support and Banking services offered contributed to better performance of the banks. The study recommends marketers to improve on marketing strategies to make users have the necessary skills and confidence to transact. Another recommendation is commercial banks to look into ‘banking services charges’ for online and over the counter services to ensure they sell what they target and not cannibalize what they intend to sell. Banks should maintain steady infrastructure to maintain e-customers on technology, and to give new-joiners an exciting experience that would make them stick to e-banking. Management should keep innovating and ensuring the same reach the intended user on time.