E-Banking Strategy and Performance of Commercial Banks in Kenya
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Date
2022
Authors
Kavila, Timothy Muthini
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Due to globalization pressure and competition from non-money depositing entities,
Commercial banks must come up with different methods to add value to their services. Some
of the ways that need to be adopted includes embrace of technology by the banks. Technology
is a great tool that can be employed to increase performance and improve the bottom line of
any organization. The study focus was on the role of e-banking strategy on bank’s performance
in the country. The objective being to investigate the role of mobile money strategy, agency
money strategy, internet money strategy and the A-T-Ms strategy on banks performance in the
country. The study being on the amount of strategic investment these banks have done on these
areas and what has been the output in terms of performance. The main areas of the study were
the balanced scorecard theory, technology acceptance theory and resource-based view theory.
Descriptive research design was employed for this study. The study targeted 39 banks that have
been in operation with the period of 2016 – 2020. Therefore, the total number of observations
was 195. Secondary dataset was employed for the study which was obtained from various
sources including the annual reports and publications of banks, the CBK, and Communication
Authority of Kenya. The data analysis employed inferential and descriptive statistics. In
descriptive statistics, percentages and frequencies are employed while the inferential statistics
included correlation and regression analysis. According to correlation analysis, agency banking
(r = 0.578, p = 0.000), mobile banking (r = 0.536, p = 0.000), ATM banking (r = 0.644, p =
0.000) and internet banking (r = 0.431, p = 0.000) have a significant relationship with banks
performance. The research concluded that use of agency banking, mobile banking, ATMs, and
internet banking had positive outcome and significantly affected performance of banks. The
study also concluded that these e-banking strategy had a positive and significant effect on both
ROA and ROE of commercial banks. Therefore, they had a positive and significant effect on
performance of commercial banks. The study did a recommendation for commercial banks and
that there is a need for an investment in advanced technology, new way of doing things and
capacity enhancement to increase utilization of e-banking services. Additionally, banks ought
to put in resources to train, educate, enlighten their customers on the benefits of utilising ebanking
services.
Description
A Research Project Submitted to the School of Business in
Partial Fulfilment of the Requirement for the Award of the
Degree of Master of Business Administration (Strategic
Management), Kenyatta University
Keywords
E-Banking, Commercial Banks, Kenya