Evaluating retail banking clients’ subjective reception to technology based self-service banking products in Kenya

Abstract

The liberalization of the Kenyan banking sector and lifting of exchange control in 1995 brought rapid expansion and increased competition to the sector. This made the banks in Kenya to push for growth of their retail banking sector. Banks, forced by competition to grow their retail banking business, are pursuing technology based self-service channels to enable provision of service to this sector profitably. The self-service technology in banking includes mobile banking, internet banking and ATMs. Theoretically the self- service lowers cost and enables management of the mass-market that the retail sector is to the banks. Self-service technology (SST) is advanced with a business model that requires a given level of activity that would justify its use as a channel of service delivery. The retail clients on the other hand, are the ones to decide on their level of usage of the SSTs. The factors that influence the retail clients’ perception and use of SSTs are thus critical to the success of the retail banking strategy. Perception is largely subjectively determined. The study was therefore undertaken to evaluate factors underlying retail banking clients’ subjective reception to the technology based self-service banking products in Kenya. The study used Q-Methodology to profile the users of SST. Data analysis revealed the existence of at least five perspectives on SST usage in banking. These perspectives were found to be explaining 63% of variance of the population of banking SST users in Kenya. The five perspectives were grouped into factors labeled as laggards, technogenics, personalized service disposed clients, ad-hoc SST users and security conscious convenience seekers. The different perspectives in revealed the diversity in perception that these users have and as such the need for diverse marketing programs to support these users adoption of SST based on their profiles. Provision of organizations’ support to SST users, education, reasonable costs and exit points, in case of SST failure, were some of the recommendations of the study. SST should also be advanced as an extension of the organization’s customer service philosophy; this is by careful implementation to avoid it just being an organization’s cost reduction venture without factoring resist the temptation to automate all users’ needs. To this end, organizations should also of its service interfaces.