Business Intelligence Systems and Performance of Commercial Banks in Kenya

Abstract

Organizations that have used business intelligence systems have been widely highlighted as reaping enormous benefits. However, despite the adoption of business intelligence systems in commercial banks in Kenya, they are still experience challenges in their performance with some reporting profit warnings and increasing non-performing loans. Therefore, general objective was to investigate influence of business intelligence systems on Kenyan commercial banks’ performance. Moreover, the study also sought to assess effect of association marketing system, PM system, risk management system, asset as well as liability management system and compliance system on Kenyan commercial banks’ performance. Moreover, the research employed descriptive research design. Additionally, the researcher targeted 439 staff working in finance, credit, marketing and risk management departments the nine tier one commercial banks located in Kenya. Sample size was 209 respondents and stratified random sampling was employed to select sample from study population. The researcher utilized primary and also secondary data. Moreover, secondary data was used to obtain data on ROA and ROE provided by Tier one commercial banks annual report. Respondents were given semi-structured questionnaires to help with the collection of primary data. The validity as well as reliability of research tools was tested via a pilot test. Thematic analysis was employed to analyse all qualitative data, and findings was given in a narrative format. Thematic analysis is the process of identifying, evaluating, and documenting patterns or themes in data. Quantitative data was then evaluated using descriptive as well as inferential statistics. Moreover, descriptive composed of frequency distribution, percentages, mean, and measures of dispersion. Inferential statistics for instance correlation analysis and multivariate regression analysis was employed after that. Tables and also figures were used to display the results. The study established that relationship marketing system, performance management system, risk management system, asset and liability management system and compliance system had a positive and significant influence on the Kenyan commercial banks’ performance. The study concludes that the significant benefit that the commercial banks have derived from successful relationship marketing system in a business is the development of loyalty in customers. An effective performance management system plays a very crucial role in managing the performance in an organization by ensuring that the employees understand the importance of their contributions to the organizational goals and objectives. A comprehensive preventative risk management program leverages a team of experts to identify and provide a deeper understanding of all types of risks. Using asset and liability management system allows banks to recognize and quantify the risks present on its balance sheet and reduce risks resulting from a mismatch of assets and liabilities and that a compliance management system automates most processes, including task scheduling, compliance monitoring, etc. and helps an organization drive agility, efficiency, and accuracy. The study recommends that the banks should aim at improving their customer service by addressing properly their customers’ questions, concerns, or even complaints. The banks should clearly define and communicate performance expectations to ensure that every employee is pulling in the same direction and working towards common goals. The banks should build a tight link between risk management and business-planning processes to make the management be able to focus on the relating challenges and actions that are required to meet the performance goals. Kenyan commercial banks should have effective liquidity management plans in place. The banks should use technology to automate banking compliance data processes, compliance data gathering, controls monitoring, data validation and risk monitoring to ensure operational efficiency, ensuring regulatory requirements are met, and creating a satisfying customer experience.