Digitization and Supply Chain Risk Among Commercial Banks in Kenya

Abstract

Banks in Kenya are changing their normal processes and are embracing new technology that is modern, effective and efficient. The process involves adopting of new technological and emerging financial technology in order to run their daily banking processes and functions. The purpose of this study was to assess digitalization and supply chain risk among commercial banks in Kenya. Objectives of the study were to establish digitalization technology used in Commercial in Kenya, to assess levels of Commercial Banks in Kenya Digitalization as well determining the effect of digitalization on Supply Chain Risk.The study was guided by Technology Acceptance Model (TAM) and Diffusion of innovation theories. The study used a descriptive survey research design where the target population comprised of 44 commercial banks in Kenya. Quantitative data was analyzed using descriptive statistics such as frequencies, percentages and mean while data was presented using tables. From the study it was established that; all commercial banks in Kenya use mobile phone application, the levels at which Kenya commercial banks have digitalized channels is very high, mobile phone application had significant (p<0.05) effect on supply chain risk, internet banking had significant (p<0.05) effect on supply chain risk and ATMs had no significant (p>0.05) effect on supply chain risk. From the study, it was concluded that; Kenya commercial banks have invested in mobile devices, phone and internet banking and use of ATMs, banking in Kenya have really changed in the recent times compared to how it used to be some years back and digitalization negatively affect supply chain risk through systems failure, hacking by fraudsters, IT security breaches unplanned interruption.This study recommends that: banks management should embrace and support a risk management system that will help having supply chain business continuity, banks should aim at training their customers on technology use and bank management should set funds to purchase back-up systems for continuity of digitalized services.