Mobile Banking Technology, Innovation Strategy and Competitive Advantage of Commercial Banks in Kenya

Abstract

Organizations strive to remain competitive by adopting mobile banking technology as an innovation strategy. The study, therefore, sought to determine the impact of adoption of mobile banking technology affects competitiveness of commercial banks in Kenya. This study adopted a descriptive research design, which was a census study. Population of study comprised of all the (43) commercial banks (43) in Kenya. Primary data was collected through an interviewer administered questionnaires which contain both closed and open ended questions. Data was analyzed mainly through the use of descriptive statistical such and inferential statistics. On extent of investment in technology, the study findings revealed that respondents agree to a very great extent that training cost to improve IT skills with a mean 4.79 and standard deviation 0.891, ATMs with a mean of 4.54 and standard deviation of 0.6, Money transfer systems with a mean of 4.62 and standard deviation of 0.59, mobile banking with a mean of 4.56 and standard deviation of 0.68 and Internet banking direct access to your account with a mean of 4.49 and standard deviation of 0.823 were some of the major ways that there banks invested in technology. From findings on extent of application of technology the respondents acknowledged that to a very great extent that account opening process with a mean of 4.65 and standard deviation of 0.622, truncation and cheque imaging transmission with a mean of 4.53 and standard deviation of 0.64, call center with a mean of 4.53 and standard deviation of 0.599 and settlement of payment on a gross basis in real time with a mean of 4.45 and 0.677 were some of the automated areas in their banks. The study concluded that the application of technology in the account opening process, truncation and cheque imaging transmission, call center, settlement of payment on a gross basis in real time, loan approval process, credit card services, and sales force automation has resulted in competitive advantage for the banks. These advantages have been seen in the high quality customer service; personalized services; 24/7/365 availability of your resources; quickened transaction processing; visibility of the bank through search engine marketing; increased bank turnover and profitability; reduced marketing and advertising costs; and expanded geographical reach.