The Relationship Between Mobile Banking Deepening And Financial Performance Of Commercial Banks In Kenya
Abstract
The objective of this study was to investigate the relationship between mobile banking
deepening and financial performance of commercial bank in Kenya. The banking sector
in Kenya has experienced turbulent times following the collapse of many banks in the
1990s. In order to minimize their operational costs, commercial banks have adopted
internet banking including ATMs, mobile banking and internet banking where customer
can access their accounts on their personal computers. Mobile banking offers millions of
people a potential solution in emerging markets that have access to a cell phone, yet
remain excluded from the format financial mainstream. The study applied descriptive
research design. The target population included six mobile phone service providers who
provide mobile phone services and 43 commercial banks operating in Kenya as at June
2014. The total amounts transferred via the mobile for the past five years were collected
and the number of mobile banking users was regressed against bank performance as
measured by the return on assets. The study used secondary data from the Central bank of
Kenya, Mobile phone Companies and Kenya National Bureau of Statistics. During the
study period, the amount of money transacted through the mobile money transfers
increased steadily from 27.07 billion in 2009 to 207.08 billion by the last month of the
analysis. The growth was motivated by the convenience offered by the service. The study
however found that there exist a weak positive relationship between mobile banking and
the financial performance of commercial banks in Kenya. The study recommends that the
policy makers take mobile banking awareness creation into consideration when drafting
policies on the operations of banks in Kenya. This was because of the weak relationship
of mobile banking and financial performance especially as the industry moves into a
technologically competitive environment. The study also recommends that policy makers
keep a keen eye on the developments of mobile banking as it is a new platform for
competition among commercial banks as the world moves into a digital age to ensure it
does not lose its regulatory role.
Citation
Degree Of Master Of Business Administration,2014Publisher
University of Narobi