The Effect of Mobile Banking Accounts and Deposits on Operational Efficiency of Commercial Banks in Kenya

Abstract

This study's main objective was to examine the mobile banking's effect on commercial banks' operational efficiency. The study looked at mobile banking accounts and mobile banking deposits concerning commercial banks' operational efficiency in Kenya. The research was led by the unified theory of acceptance and use of technology model (UTAUT) and Technology acceptance model (TAM). A descriptive research design was used, targeting all the 41 commercial banks. The research adopted a census survey while utilizing secondary data from Central Bank of Kenya and the commercial banks' annual financial reports in Kenya. Data on the number of bank deposits mobilized as savings and the number of registered bank accounts. The study period is from 2010-2018. STATA software was used in data analysis, descriptive and statistical inferential. The independent variables were measured against the dependent variable to examine if they affected commercial banks' operational efficiency. Multiple regression equations estimated the relationship between the variables. Hausman Test was used to specify the adoption of Random effect or Fixed effect models in panel data. The Hausman tested and fixed effect model was selected. The diagnostic tests covering heteroscedasticity, autocorrelation, multicollinearity, and normality tests were also conducted. The findings were presented using graphs and tables. The results were as follows: mobile bank accounts (β=0.0365, p>0.05), and mobile deposits (β=0.015, p>0.05). The study concluded that mobile accounts and mobile deposit had no significant effect on commercial banks' operational efficiency in Kenya. The study recommended that commercial banks invest more in mobile deposits since it had a positive relationship with commercial banks' operational efficiency in Kenya. The study results would enhance the adoption of more efficient financial innovation products and services in the banking industry that would enhance the overall commercial banks operational efficiency.