Implementing Digital Strategy for Attaining Competitive Advantage During Covid–19 Pandemic by International Tier 1 Banks in Kenya
Abstract
With the rapid changes in automation and technologies and advent of COVID-19,
commercial banks have been forced to speed up the implementation of digital strategies as
a way of attaining competitive advantage. The objective of this study was to establish the
challenges of implementation of digitization strategies and competitive advantage by
international Tier 1 commercial banks in Kenya. This research was based on two theories;
the national competitive advantage theory and the chaos theory of management. This study
applied a case study design and used an interview guide to collect qualitative data from the
nine Tier 1 international commercial banks in Kenya. The target respondents in the 9 Tier
1 commercial banks were the Chief Information System Directors. This study applied the
content analysis method to analyze the collected qualitative data. The study findings
determined that in most of the international tier 1 commercial banks, formulation and
implementation of digital strategies was an interdepartmental process that incorporated two
or more departments. The study also determined that all the banks had digital strategies in
place prior to COVID-19 pandemic's outbreak in the nation, but had to enhance the scope
and accelerate implementation due to COVID-19. Findings indicated that the international
tier 1 commercial banks implemented various digital strategies during the COVID-19
pandemic which included digitization of more banking processes and services, partnerships
with FinTechs and Telecoms, introduction of digital signatures and workflow automation.
Besides, findings indicated that other digital strategies executed included allowing
employees to work remotely, upgrading their systems, expanding online banking services,
improving aesthetics of digital platforms and upgrading security over systems and
increasing allocation of resources. The study findings determined that the commercial
banks faced a variety of challenges that included cyber security risks, wastage of resources
and time in remote working, regulatory challenges, internet access, increase in emergency
investments and resistance to change. The study determined that the digital strategies that
were executed by the commercial banks were critical to their ability to achieve and
maintain competitive advantage. Based on the findings and conclusions, the study leads to
the following recommendations. To begin with, the study recommends that digital strategy
formulation and implementation should be an interdepartmental effort and process.
Incorporating various departments in the formulation and implementation of digital
strategy, it is recommended that commercial banks should have the agility in their culture,
strategies and processes so that they can cope with chaos such as those that were brought
by the COVID-19 pandemic. Besides, top leadership and policy makers should work
together in dealing with the challenges of executing digital strategies. The top management
should ensure that there are adequate policies and resources to cope with the challenges
such as cyber-security, internal efficiency, remote working and connectivity. Besides, it is
recommended that CBK should expedite the review and approval of new digital products
and services by the commercial banks during the COVID-19 pandemic and in the future.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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