Effect Of Digital Banking Strategies On Growth Of Commercial Banks In Kenya: At Kenya Commercial Bank

Abstract

The1aim1of1this1study1was1to1investigate1effect1of1digital1banking1on1growth1of1 commercial1 banks1 in1 Kenya, at Kenya commercial bank. The study was addressed by the following objectives, the effect1 of1 internet1 subscription on1 the1 banks1 loan book, and the1effect1 of1 mobile subscription on customer deposits and lastly what is the effect of branchless banking1 on1 the1 banks1 operational costs. The study1 adopted1 a descriptive case1 study1 research1 design1 as it sought to describe the characteristics related to digital banking and growth of commercial banks, estimate the influence and make predictions. The study targeted 200 branch managers of Kenya commercial1 banks1 in1 Kenya1 as1 at1 31st1 December1 20171 (KCB yearly report, 2017). The study adopted a census approach. Data collected was first coded as per the variables, then data entry done for every research tool filled. After this, descriptive statistics was carried out and presented in pie charts and frequency tables then interpreted to derive meaning with regards to the study objectives. Multiple1 regression1 analysis1 was used to measure the nature, magnitude and relationship1 among1 variables. 1 From the regression analysis it can be observed that1 internet1 banking1 has an average effect1 on1 loan1 book, 1 it is also certain that customers are quite aware and have the knowledge1 of1 how1 to1 use1 internet1 banking1 and1 are1 willing1 to1 embrace1 the technology. Despite these results, the study concludes that the technology is not widely accepted due to safety and security issues which respondents think affect customers greatly. Therefore, the uptake of this platform is greatly dependent in safety measures to avoid losses on the customer’s side. Based on the information that was analyzed in regard to the study objectives, it is clear that mobile banking has empowered clients to access to supports whenever they need, and they additionally think of it as a financially savvy approach to give banking services to the unbanked. It likewise empowers the clients to save money on exchange cost. For the information investigation finished as to the target it very well may be reasoned that mobile banking penetration in commercial banks has been made easier by many Kenyans being owners of mobile phones. From the regression analysis there is over and above 50% significant influence of branchless banking on the banks operational cost. Digital banking has been a key significant aspect of the organization that has helped in monitoring and controlling bank cost. Despite this finding, there was an average consensus on the issue of whether digital banking has minimal maintenance and operating costs, since the cost of infrastructure might be high in some cases