ELECTRONIC BANKING AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN NORTH RIFT REGION, KENYA

Abstract

To maintain profitability, deposit taking financial institutions have come up with various electronic banking aimed at avoiding the negative consequences of liberalization. However, commercial banks have had imperceptible growth over the past ten years, both in terms of their operational performance and financial performance. In order to determine the impact of technical breakthroughs on financial performance, the current study is conducted due to the contextual, methodological, and conceptual gaps arising from previous investigations with a focus on the commercial banks in Nairobi. The specific objectives of the study were to explore the effect of Mobile Banking, ATM Banking, Internet Banking and payment card banking on financial performance of Commercial banks in North Rift Region, Kenya. Descriptive research design was adopted in this study. The population of study in this research was the 84 respondents comprising finance and ICT manager of 42 commercial banks in North Rift region of Kenya. In this case, the census of all the 84 respondents was studies. Pilot study was conducted among 8 respondents from 4 commercial banks in Bungoma to ascertain reliability and validity of the research instruments. Data collected was purely quantitative and it was analyzed by descriptive and inferential statistics using SPSS version 26. The results were presented using tables, charts and figures. The results revealed that there is significant influence of mobile banking, online internet Banking, automated teller machine, payment card banking on financial performance of commercial banks in North Rift Region, Kenya at 5% significance level. Overall, electronic banking significantly accounted for 64.3% of variation in financial performance of commercial banks in North Rift Region, Kenya. The study therefore concluded that electronic banking herein mobile banking, online internet Banking, automated teller machine, payment card banking is significant predicator of financial performance. Commercial banks should prioritize investment in robust Internet banking platforms to meet the growing demand for digital banking services. Commercial banks should continue to invest in and promote payment card banking services to meet the evolving needs and preferences of customers.

Key Words: Mobile Banking, ATM, Internet Banking, Payment Card, Electronic Banking

CITATION: Chesir, C. J., Miroga, J., Otinga, H. (2024). Electronic banking and financial performance of commercial banks in north rift region, Kenya. The Strategic Journal of Business & Change Management, 11 (2), 775 – 802. http://dx.doi.org/10.61426/sjbcm.v11i2.2949