STRATEGIC PROCESS INNOVATION AND PERFORMANCE OF COMMERCIAL BANKS IN KENYA
Abstract
The purpose of this study was to investigate the effect of strategic process innovation on performance of commercial banks in Mombasa County. The study used a descriptive cross-sectional survey research design. The study targeted management staff of seven banks which were feted as the best banks in digital and service efficient banks in 2020 and include Standard Chartered bank, Equity Bank, KCB Bank, Sidian Bank, Bank of India, Bank of Baroda and I&M Bank. Stratified random sampling technique was used to select a sample size of 82 participants by help of Yamane statistical formula. Primary data was collected using structured questionnaire based on the objectives of the study. The collected data was edited, coded for processing using the Statistical Package for Social Sciences (SPSS v.26) and results were presented in frequency tables. Descriptive and inferential statistics was used to analyze information generated from the respondents. The study results revealed that the bank has installed point of sale terminals in all areas in Mombasa. This means that the point of sale terminals are widely accessible within Mombasa. The study found that the bank had wholly transitioned to cash less transactions meaning that customers of the bank has switched to digital transactions. The bank systems accessibility to customers had improved and that the bank account holders had been connected to electronic banking platform. The analysis came to the conclusion that there is parallel loan application processing and optimal workflow distribution and that the bank has experienced lower turnaround time of credit processing. The study concluded that the credit worthiness of the applicants is effectively ascertained. Also the commercial bank has experienced timely credit approval for customers. The study recommended that the commercial banks work towards zero rating transactions processing error rate. This would save the banks unnecessary costs occasioned by transactions human errors. The study recommended that the commercial banks endeavor in digitizing and automating all its backend work flow to increase efficiency and effectiveness in banking services. The human factor in handling repetitive tasks in the back-office should be significantly reduced as this would lead to increase in efficiency in back-office operations.
Key Words: Online Banking Innovation, Back-Office Processes Automation, Credit Processing Automation, Automated Queue Management
CITATION: Isiaho, D. W., & Koech, P. (2023). Strategic process innovation and performance of commercial banks in Kenya. The Strategic Journal of Business & Change Management, 10 (2), 619–634.
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i2.2626
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