EFFECT OF FINANCIAL INSTITUTION INNOVATION ON FINANCIAL PERFORMANCE IN COMMERCIAL BANKS IN KENYA
Abstract
The main objective of this study was to establish the effect of financial institution innovation on financial performance of commercial banks in Kenya. The specific objectives were: To determine the effect of agency banking, internet banking, mobile banking and branch network on the financial performance of commercial banks in Kenya. Descriptive survey was used while a questionnaire was used for the collection of primary data. Secondary data was used in verification of the communicative and pragmatic validity of primary data. The target study unit for this research was 38 randomly selected commercial bank senior management staff. Statistical analysis was carried out with the aid of the IBM SPSS Statistics for Windows, version 23. Study findings when all the stated hypotheses were tested in the regression model, were found to be significant between themselves and with financial performance of commercial banks in Kenya. The strongest relationship was observed between mobile banking and financial institution innovation (r = 0.757**). The study concluded that mobile banking positively and significantly influences the firm financial performance of commercial banks in Kenya. Internet banking also had significant impact on financial performance of commercial banks (r=0.709). Branch network, however, had logical and explainable sign but was not statistically significant (r =0.317**). The significance value of 0.000 meant that the study variables agency banking, internet banking, mobile banking and branch network if regressed together had a positive influence on financial performance of commercial banks in Kenya. The study recommended that the banking institutions should open up more branch network which will ensure services accessibility by customers and resulting in improved financial performance.
Key Words: Agency Banking, Internet Banking, Mobile Banking, Branch Network
CITATION: Mbogo, M. T., & Ibrahim, A. A. (2022). Effect of financial institution innovation on financial performance in commercial banks in Kenya. The Strategic Journal of Business & Change Management, 9 (2), 694 – 709.
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DOI: http://dx.doi.org/10.61426/sjbcm.v9i2.2291
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