dc.description.abstract | Kenya has evolved in financial innovations over the years, her being home to an early
entrant form of mobile money banking, with world class standards: M-PESA. This
innovation and evolution of other new technologies in financial innovations in Kenya,
lead to motivation of this study. The study established the effect of financial
innovation in the performance of commercial banks in Kenya. To achieve this
objective the researcher collected data of four variables: mobile banking, agency
banking, automated teller machines and plastic card usage. Data was collected by
secondary method from central bank. Data was then analyzed by SPSS using linear
regression. The study found out that mobile banking, automated teller machines and
card usage had positive effect on performance of commercial banks in Kenya. The
most important attribute that managers must consider immensely before making
decisions is agency banking according to the study; it showed a negative effect on
performance of banks. Although the study established that financial innovations
affected commercial banks performance, it is notable that none of the tested variables
was significantly related to performance of commercial banks in Kenya. However
there was need for more research and innovation to create up to date innovations and
improved customer services in commercial banks. Since agency banking, mobile
banking, ATMs and card usage innovations still faced security challenges as cases of
fraud and loss of resources could cause setbacks, authorities need to set appropriate
environment and motivate innovators to better performance of commercial banks
hence improving Kenya’s economy | en |