Factors Of Mobile Banking Affecting Performance Of Tier One Banks In Kenya

Abstract

The study sought to determine the factors of mobile banking that affect the performance of tier one commercial banks in Kenya. The study’s specific objectives were; to establish how mobile banking transaction volume affect financial performance of tier one banking institutions in Kenya; to establish how mobile banking transaction costs affect financial performance of tier one banking institutions in Kenya; to establish how mobile banking products financial performance of tier one banking institutions in Kenya; and to establish how mobile banking accessibility affect financial performance of tier one banking institutions in Kenya. The study was underpinned by various theories which include Schumpeterian theory of innovation, the market power theory, task technology fit theory, and technology acceptance theory respectively. The research used a descriptive research design, in which quantitative data was collected from 8 tier one commercial banks in Kenya, covering the years 2015 to 2019. Data was collected from bank repositories as well as CBK’s publications. Data was analyzed using descriptive statistics and results are displayed using tables and figures. In relation to objective one, it has been found that mobile banking increases transaction volume and this significantly and positively enhances financial performance. The findings related to objective two have confirmed that mobile banking reduces transaction costs for banks to maximize on their profits. The outcomes related to objective three indicate that mobile banking has introduced variety of services and products and this contributes to the overall performance of the banks. As concerns objective four, mobile banking has been found to enhance accessibility and this increases transaction volumes that are impeccable in promoting financial performance. The results of the study revealed that mobile banking is an important and necessary strategy in the modern banking environment for purposes of improved financial performance and increased of competition. This is backed up from the obtained statistics in which case there was a positive correlation between mobile banking and financial performance. Further, the findings support the fact that ensuring easy accessibility of the banks’ services through mobile banking promotes convenience and give customers opportunities to transact frequently than when it is through the counter. Moreover, the research outcomes support the fact that mobile banking accessibility for 24 hours, irrespective of geographic locations, is a very important strategy that banks are depending on to ensure financial performance is promoted. The results also indicate that, increasing the number of products or services that can be accessed through mobile banking means multiple sources of revenues for the banks. This was supported by obtained statistics in which a positive correlation was noted. The study has provided a number of recommendations for policy action and future scholarly work on this area.