FINANCIAL INNOVATION ADOPTION AND FINANCIAL PERFORMANCE OF TIER THREE COMMERCIAL BANKS IN KENYA

Abstract

The study's overarching goal was to learn how different financial innovations have affected the efficiency of Kenya's third-tier commercial banks. A descriptive methodology was used for this study. Data was analyzed using the Statistical Software for the Social Sciences. A descriptive analysis was performed, including measures of central tendency, dispersion, and frequency, on the data set. Tables of frequencies and percentages, bar charts, and scatter plots were utilized to display the information. Multimodal regression analysis was utilized as a statistical method to examine the connection between financial growth and prosperity. According to the findings, the bank relied heavily on the convenience of internet banking. One positive effect of internet banking is the rise in commission income at Tier 1 financial institutions. The findings suggested that commercial banks' interest-based revenue was only somewhat affected by the rise of online banking. The research found that the introduction of pay bill innovations increased the commercial bank's commission service charge income. According to the numbers, financial institutions had implemented biometric authentication for their customers. The biometric has a positive effect on commercial banks' interest-based income to a little extent. The results showed that customers may get instant online loans from banks anytime, anywhere thanks to digital lending. In addition, it let people check their own financial accounts, which simplified banking and saved money. Most people who were asked about bank interest costs claimed that they were all over the place. The bank has seen a fall in income from financial assets such as shares, CDs, notes, and bonds, as well as an increase in the cost of borrowed money from sources such as customers' deposits and wholesale financing. The use of online banking has a substantial, positive impact on business results. Biometric client identification was shown to have a large and beneficial impact on financial results. In Nairobi County, Kenya, it has been shown that mobile-based lending affects the profitability of microfinance. This is why mobile lending has to be a top priority for bank management. The government should thus prioritize the use of mobile lending for all aspects of the lending process, including loan distribution, loan evaluation, repayment schedules, and mobile bank loans.

Key Words: Financial Innovations, Liquidity Ratios, Non-Performing Loans, Organizational Control Frameworks, Online Banking, Pay Bill Innovations, Biometrics Information Sharing

CITATION: Lydia, S. P., & Kavale, S. (2023). Strategic positioning and organizational performance of long distance public service vehicles in Mombasa County, Kenya. The Strategic Journal of Business & Change Management, 10 (2), 741–754.