Strategic Intelligence and Performance of Commercial Banks in Kenya
Walowe, Kori Blandina
MetadataShow full item record
Commercial Banks are a great contributor to economic development and prosperity of a country. They facilitate the flow of funds, aid the accumulation of capital, mobilise savings and finance industries. However, between 2016 and 2018 there was high disparity on return on equity. Insider lending, fraud and mismanagement were the key causes for disparity and poor performance. This study investigated the effect of strategic intelligence on the performance of Commercial Banks in Kenya. In particular, the study sought to determine the effect of business intelligence, competitive intelligence and knowledge management on the performance of Commercial Banks in Kenya. The study further sought to establish the moderating effect of regulatory framework and the mediating effect of dynamic capabilities on the relationship between strategic intelligence and performance of the Commercial Banks in Kenya. The study was anchored on balanced scorecard model, resource-based view, dynamic capabilities, and Knowledge management model and stakeholder theories. It adopted positivism philosophy and used both descriptive survey and explanatory design. The target population comprised 40 Commercial Banks in Kenya. The respondents were obtained through stratified proportionate and random sampling technique. The study employed both primary and secondary data, where primary data was obtained using semi-structured questionnaires, administered through drop-and-pick method, while secondary data was acquired from annual publications of the Central Bank of Kenya found on the internet. The study further used themes and narratives to present qualitative data. Descriptive statistics were used to summarize the survey data which was later presented in frequencies, means, standard deviations and regression models. The study used ordinary multiple linear regression analysis to confirm the effect of strategic intelligence on the performance of Commercial Banks. In order to assess statistical significance, hypothesis testing was conducted at P-value<0.5. Findings indicated that business intelligence, competitive intelligence and knowledge management had a positive effect on both return on equity and non-financial performance indicators in Kenya Commercial Banks. Regulatory framework had a moderating effect on the relationship between strategic intelligence and non-financial performance measures, but it had no effect on relationship between strategic intelligence and financial performance measures of Commercial Banks. On other hand, dynamic capabilities had a mediating effect on the relationship between strategic intelligence and non-financial performance measures, but partially mediating effect on the relationship between strategic intelligence and performance of Kenya Commercial. The study, therefore, recommends that corporate level managers of Commercial Banks should engage more on strengthening strategic intelligence skills to remain a pertinent in a competitive banking industry. Moreover, the Commercial Banks need better functional forecasting methodologies, training, constructive application of both theories and practice, and innovative scientific approaches to capture more customers. Additionally marketing management teams should work closely to enhance dynamic capabilities in order to catch-up with volatile business environment. For more improvement, the Central Bank of Kenya should work closely with Commercial Banks policy makers to explore weaknesses of the ongoing banking regulations and improve where necessary, to attract more investors.