The Effect of Financial Innovation on the Financial Performance of Commercial Banks in Kenya
Abstract
The study endeavored to find the relationship between financial innovations and
the financial performance of commercial banks in Kenya. The study variables
were mobile phone, agency banking and ATM banking. The study adopted a
descriptive research design. The target population of this study was all the 43
commercial banks in Kenya. The study used secondary data collected from the
published annual reports for commercial banks spanning from 2012 to 2016
during which technological innovations have been intensely invested in by banks.
The study used descriptive statistics using Statistical Package for Social Sciences
V21.Multiple regression analysis was used to test the relationship between
financial innovations and financial performance among commercial banks in
Kenya. The study concluded that mobile phone banking, agency banking and
ATM banking as financial innovations positively impacted the financial
performance of commercial banks in Kenya over the 5 year period. The study
recommends that management of the commercial banks in Kenya ought to enter
into more partnerships with mobile phone services providers in an effort to ensure
their customers continue to adopt the use of the platform in order to enhance
financial performance. The study further recommends that banks should put more
resources in ensuring that they partner with more agents especially in the rural
areas where they do not operate branches so that they reach the unbanked. Finally,
the study recommends that that the ATM networks be further increased especially
in areas where no such facilities exist in order to reach more people.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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