FINANCIAL INNOVATION PRACTICES AND PERFORMANCE OF COMMERCIAL BANKS IN KISII COUNTY, KENYA
Abstract
This study examined the influence of innovative financial methods on the financial outcomes of commercial banks in Kisii County, Kenya. The primary objective is to determine the relationship between financial innovation and the performance of Kisii Town’s commercial banks. Specifically, the study aimed to: (1) examine the impact of mobile banking on financial performance; (2) assess the effect of ATMs on financial results; (3) investigate how online banking influences revenue creation; and (4) explore how agency banking can expand customer access and boost bank profitability. According to the results, using automated teller machines ensures that PINs are used correctly, improving account security and customer confidence, both of which boost performance. According to the study, most participants believed that online banking has an impact on the bank's ability to generate revenue. The results agreed that internet banking services successfully meet the needs of consumers. According to the study, most participants agreed that online banking has improved consumer engagement and communication with banks. The study indicated that the majority of respondents rated the performance of agency banking representatives in facilitating various banking activities positively. The study's findings indicated client satisfaction levels with agency banking services. The study indicated that agency banking influenced the profitability of banks. The financial institution ought to employ commercial agents to reduce the time that account holders and potential clients spend traveling to a bank branch for transactions, hence facilitating higher transactions and improving access to online banking services. The leadership of the financial institution must diligently maintain flexibility, confidentiality, and security protocols in online banking services, while ensuring the prompt delivery of information to users, thereby improving performance. Leadership in financial institutions should advocate for and enable the utilization of mobile banking channels to improve profitability and, subsequently, performance. They should minimize the transactional costs of online banking channels to encourage greater transaction volume. Bank management must guarantee the dependability of ABCs to facilitate heightened transaction volumes.
Key Words: Mobile Banking, ATMs, Online Banking, Agency Banking
CITATION: Onkundi, B. B., & Miroga, J. (2025). Financial innovation practices and performance of commercial banks in Kisii County, Kenya. The Strategic Journal of Business & Change Management, 12 (2), 742 – 756. http://dx.doi.org/10.61426/sjbcm.v12i2.3239
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DOI: http://dx.doi.org/10.61426/sjbcm.v12i2.3239
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