The relationship between financial innovation and financial performance of commercial banks in Kenya

Abstract

This study sought to determine the relationship between financial innovation and financial performance of commercial banks in Kenya. This study took on a Quasi-experimental research design. The data collected was edited for accuracy, uniformity, consistency and completeness and arranged to enable coding and tabulation before final analysis. Qualitative and quantitative analysis techniques were used. Qualitative data will be analyzed by categorizing and grouping thematic contents through content analysis to address the research questions. Quantitative analysis will be analyzed through descriptive statistics such as measure of central tendency to generate relevant percentages, frequency counts, mode, and median and mean where applicable. The study will also use multiple linear regressions to analyze the data. The study concluded that commercial banks had adopted process, product and institutional innovation. Product innovation strategies adopted by the commercial banks were Credit cards,business club and unsecured loans.Institutional innovations adopted were Insurance services,credit refrence bureau and Islamic bannking.Process innovation adopted were RTGS, mobile and internet banking.It was clear that adoption of financial innovation resulted in strong financial results of commercial banks. The study therefore the suggests that further research should be conducted in all the commercial banks to investigate into the effects of financial innovation strategies on other aspects of the bank in achieving competitive edge.