E-banking Strategy and Customer Service in Tier-1 Commercial Banks in Kenya

Abstract

There are 9 Tier-1 commercial banks in Kenya which are classified according to the number of branches they have, their customer base, their assets and liabilities and their declared profits and losses year by year. The Tier-1 commercial banks under study are KCB Bank Group Limited, ABSA Bank Kenya, CFC Stanbic Holdings, Cooperative Bank of Kenya, Equity Bank, Diamond Trust Bank, NCBA Bank Kenya, National Bank of Kenya, and Standard Chartered Kenya and they all use E-banking strategy to achieve their objectives, one of which is customer satisfaction. The study's goal was to determine e-banking strategy and customer service in Kenya's Tier-1 commercial banks. Electronic banking (e-banking) technology has grown and altered the way banks deliver their services. Using a range of technological discoveries has become an important factor influencing competitiveness and commercial banks' profitability. As a result, banks are investing more on implementing and making use of cutting-edge online banking solutions. The effect of e-banking efforts on performance of Kenyan banks is big. Strategy is described as the wide program for describing and accomplishing a firm’s set objectives. All Tier-1 banks have introduced E-banking as one of the ways of giving service to their customers. This research revolved around Diffusion of Innovation theory, Unified theory of Acceptance and Use of Technology, Bass Model of Diffusion theory and Customer Satisfaction theory. The case study research design was employed to aid the study and the respondents were bankers both managerial and non-management staff. This method was selected because it enabled the researcher to observe and collect data without changing the natural setting of the respondents who were bankers both managerial and non-management staff at the branches. The study population comprised of the 9 tier-1 commercial banks in Kenya and a census was used in surveying these banks. Data acquired using interview guides was categorised as per the study questions to ease analysis. A total of 18 (67%) personnel from large commercial banks, both management and non-managerial, were interviewed, and they all agreed that e-banking was a success in all the banks studied. Females made up 40% of the responders, while male made up 60%. Descriptive analysis was applied and the relationship between variables was done by correlation analysis. The data was analysed descriptively and then presented in percentages and frequencies. The researcher used tables to submit the data collected for ease of comprehension and evaluation. According to the research, all Tier-1 banks have implemented e-banking across their branches, and clients are pleased with the services and thus improved customer service. The findings established a strong effectiveness of e-banking on customer service in banks. This study recommends more research be done in the same area, but this time focusing on small and micro banks in Kenya. The survey proposes to bank executives to spend more in e-banking infrastructure, such as ATMs, in regions where customers can easily access them and service delivery channels such as banking using telephone, internet banking, using applications such as WhatsApp to bank via mobile phones, and short code words for rapid access to their own bank accounts. Implication of this study is it will assist the management of the 5-tier commercial banks to make decisions and specifically budget and invest in robust technology as this study shows that customers prefer to use to use E-banking rather than visit the branches. Another implication of this study is it allows banking sector policy makers to get knowledge of the current banking sector dynamics and how to respond to them in a timely manner. It will also inform the banking sector policy makers to formulate policies on e-banking services and its regulation to assist both the banks and their customers.