Business Intelligence Capability and Performance of Commercial Banks in Kenya
Wamai, Muiga John
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The banking sector in Kenya has continuously invested in business intelligence capability for growth, improved efficiency and financial performance. During the last seven years, returns on assets of commercial banks has been diminishing despite the adoption of business intelligence capability. In reference to this context, the study intended to evaluate the effect of business intelligence capability on the performance of commercial banks in Kenya. Specifically, the study investigated how infrastructure, data integration and organisational capabilities influence the performance of commercial banks in Kenya. The study further assessed how competitive advantage mediates the association between business intelligence capability and performance of commercial banks. The main theory anchoring the study was resource-based view supported by DeLone and McLean‟s model and dynamic capability view theory. An explanatory non-experimental design was employed to conduct a census involving the 43 commercial banks in Kenya. The respondents were 129, made up of the heads of information technology, operations managers and credit managers drawn from the commercial banks. Both primary and secondary data were applied. A semi-structured questionnaire was used to gather primary data on business intelligence capability whereas secondary data on bank performance was gathered from audited financial statements using data collection sheet. Validity and reliability of the questionnaire were affirmed. Descriptive and inferential statistics were applied for analysis. Means, standard deviation and frequencies were used. Ordinary list squares model was also used in analysis. Diagnostic tests of normality, linearity, autocorrelation, homoscedasticity and multicollinearity were conducted to ascertain conformance with assumptions of linear regression. The main beneficiaries of the study were the commercial banks management, academia and policy makers. The main results of the study revealed that commercial banks in Kenya had various business intelligence capabilities such as infrastructure, data integration and organization capabilities which positively and significantly affect performance. The study also found that competitive advantage does not mediate the association between business intelligence capabilities and performance of commercial banks in Kenya. The study concluded that commercial banks in Kenya had business intelligence capabilities which included infrastructure, data integration and organization capabilities which have an effect on commercial banks performance. It was recommended that the leadership of commercial banks and other stakeholders should embrace business intelligence capability as it is an effective performance management strategy.