Effect of Financial Technology on the Financial Performance of Commercial Banks in Kenya

Abstract

Financial institutions like banks have embraced use of financial technology in their operations. The study endeavored to find the relationship between financial technology and financial performance of the 43 banks in Kenya. The objective of the study will be to determine the effect of financial technologies on the Financial Performance of the Commercial Banks in Kenya. The independent variables in the study were mobile banking, internet banking and agency banking. The target population of this study was the 43 banks in Kenya. The study analyzed secondary data collected from reports published annually for the years 2013 to 2016, during which adoption of financial technology was highly adopted by banks. The study used descriptive statistics analyzed using SPSS software (Statistical Package for Social Sciences), multiple regressions was also used to study the relationship between financial performance and financial technology. The study found that adoption of mobile banking, online or internet banking and agency banking impacted the financial performance of banks positively. The study concluded that banks should invest in financial technology to enhance their operational efficiency and effectiveness. The study also recommends that banks should mobilize their clients to adopt these technologies as well as channel resources to enhancement of technological infrastructure. Banks should also adopt more agency networks as this widens their client base especially in the rural areas.