Key Innovation Drivers in the Adoption of E-banking Practices in Kenya: a Case Study of Nic Bank Kenya Ltd

Abstract

Today the pace of innovation change in the banking industry is fast and unrelenting. The effect on the day to day operations of banks and customer interactions with the institutions is fundamental and industry changing. New technologies have created new markets and opportunities for the banking sector, and thus managing and satisfying the customers in this new banking environment has become a key issue for industry players. Using NIC Bank (K) Ltd as a case study, this research will study the drivers for the adoption of e-banking practices in Kenya. The objectives of the study are: describe how innovation influences consumer adoption of e-banking practices in order to make credible conclusion and recommendations on future innovations inclinations that will impact on e-banking practices based on the current trends. The theoretical frameworks to guide the study are the innovation diffusion theory, theory of reasoned action, and technology acceptance model. Based on a review of the literature and the research objective, three key thematic areas are established: Industrywide impact of innovation on e-banking practice; Innovation and e-banking practice in NIC Bank Ltd; and Influence of innovation on customer adoption of e-banking practices. For the research method the study qualitative methodology utilizing semi-structured individual indepth interviews for data collection. The study will interview five senior officers in NIC Bank who actively engage in business strategy, planning and agenda setting at the financial institution. The collected data will be coded and analysed through qualitative content analytical tool ATLAS.ti version 7.5 and the findings presented in texts, charts, and tables. The study found that innovation for convenience, innovation for ease of use, innovation for safety, and innovation for reliability are fundamental in driving adoption of e-banking practices. Financial institutions are advised to conduct audits on their e-banking products and services with the mentioned innovations as key benchmarks to ensure that they focus strategy and implementation mechanics toward enhancing innovation for convenience, innovation for ease of use, innovation for safety, and innovation for reliability. This study will be useful to banks management and banking industry regulators to better understand the dynamics of innovation in influencing adoption of e-banking practices and to provide better ways of promoting e-banking and related cashless technology to their customers.