EFFECT OF DIGITAL TRANSFORMATION IN FINANCIAL INSTITUTIONS ON FINANCIAL INCLUSION; A CASE OF TIER ONE BANKS IN MOMBASA COUNTY KENYA
Abstract
The research analyzed effects of digital transformation in banks on financial inclusion, a case of tier one banks in Mombasa County. This research covered the issues related to digital banking. The research specifically pursued to establish adaptability of digital banking on financial inclusion in tier one banks in Mombasa County, to determine affordability of digital banking on financial inclusion in tier one banks in Mombasa County, to establish how speed of transactions of digital banking affect financial inclusion in tier one banks in Mombasa County and also to determine how accessibility of digital banking affect financial inclusion in tier one banks in Mombasa County. The study adopted a descriptive survey design because it provided a clear outcome and the characteristics associated with it at a specific point in time. The target population for the study were 150 staffs in tier one banks in Mombasa County. The study adopted a census technique to select the respondents from the population. The study obtained primary data through a structured questionnaire. The researcher employed a self-administration style of data collection. Responses in the questionnaires was tabulated, coded and processed using a computer Statistical Package for Social Science program. The relationship between the dependent variable and the independent variables were tested using multiple linear regression models. The data was analyzed and conclusions drawn. Descriptive and inferential statistics were used whereby the data was presented through tables. The researcher found out that the correlation between the independent variables (adaptability of digital banking, affordability of digital banking, speed of transactions of digital banking as well as accessibility of digital banking) besides the dependent variable (financial inclusion) results shows that all are positive and significant. In particular, adaptability of digital banking is positively and significantly correlated (r=.033, p<.05). Similarly, affordability of digital banking (r=.203, p<.05), speed of transactions of digital banking (r=.075, p<.05), and accessibility of digital banking (r=.230, p<.05) are positively and significantly correlated with drive for modern digital transformation on financial institutions. In conclusion, banking institutions adopt digital financial services to lower operating cost associated with opening and operating more branches to improve their profitability and financial performance and not to foster financial inclusion.
Key Words: Digital Banking, Digital Affordability, Transactions Processing, Digital Banking Accessibility
CITATION: Msagha, M. S., & Oirere, D. (2023). Effect of digital transformation in financial institutions on financial inclusion; A case of tier one banks in Mombasa County Kenya. The Strategic Journal of Business & Change Management, 10 (2), 635–655.
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i2.2628
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