Rose Mbula Mutevu


The role of technological innovations on efficiency and cost reductions in the banking sector is paramount to the successful and profitable service delivery in the sector. Kenyan commercial banks have continued to use huge investments in technology based innovations and training of manpower to handle new technologies. None of the available studies had focused on the effects of technological innovation on the performance of Kenyan banking industry and Equity Bank of Kenya in particular. The main objective of this study therefore was to investigate the effects of technological innovations on the financial performance of the commercial banks in Kenya where the focus was on Equity Bank of Kenya. This study used a descriptive research design. The specific objectives of the study were to determine the effects of mobile banking and internet banking transactions on the financial performance of commercial banks in Kenya. This research problem was studied through the use of a descriptive research design. The target population included the 240 staffs from the Equity Bank of Kenya in the NCBD and its environs of the west, east and south as well as in the Head Office. A sample of 20% (48 respondents) was selected using stratified random sampling from within each group in proportions. The study made use of a survey questionnaire which was self-administered through drop and pick later method. Quantitative data collected was analyzed by the use of descriptive statistics using SPSS and presented through percentages, means, standard deviations and frequencies. The information was displayed by use of bar charts, graphs and pie charts and in prose-form. From the findings, the study concludes that adoption of technological innovations by banks affect their financial performance. Balance enquiry, automatic advices to clients on credits and airtime purchase, money transfer as well as mini-statement affects the financial performance in the Bank. Competition, minimum bank reserves, operational costs, operational risk, capital requirements, customer base/reach, regulatory requirements, customer relation, profitability and customer trust on internet banking affect the financial performance. The study recommends that for banks to be highly competitive, they need to employ modern technological innovations such as internet based banking services. The critical role of technological innovation in the development of a company and its contribution on the economic growth of firms has been widely documented.

Key Words: Technology, Innovations, Commercial Banks

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