Deriving value from service oriented architecture in Kenyan banks

Abstract

The banking industry has changed drastically in the recent past due to improved internet adoption, technological evolution, mobile money solutions, financial technology innovations and customers demanding for better access to diverse services and better customer care. Commercial banks are seeking to remain competitive in a market characterized by global competition, increased regulation and a growing preference for mobile money and mobile payment systems. Service oriented architecture provides a platform where banks can achieve these goals and reduce operational costs. Based on these facts, this research focused on finding the current levels of service oriented architecture utilization, the factors that influence the levels of SOA utilization and to establish if there is any relationship between Service Oriented Architecture utilization and business value. To satisfy these objectives, a descriptive cross-sectional survey was used as the research methodology.The data collection method used was the administration of questionnaires to a study population of the 41 commercial banks in Kenya. Primary data was collected through the use of questionnaires and secondary data was collected from the financial statements of the commercial banks. The data was analysed by use of descriptive statistics which included the calculation of mean and percentages. Linear regression analysis was used to find the relationship between SOA utilization and business value. The study found that the current rate of SOA utilization in commercial banks in Kenya is above average. Web technology factors, software integration factors and managerial factors affected SOA utilization at different levels. The cost and complexity of SOA greatly influenced its overall utilization in commercial banks in Kenya. The findings showed that increased SOA utilization positively influenced business value. The study recommends a long term managerial strategy to ensure improved SOA utilization. Through effective management, commercial banks can mitigate the factors affecting SOA utilization which will lead to improved business value.