Digitalization and International Market Penetration of Kenyan Commercial Banks

Abstract

With the help of digitalization, companies can create new network systems and business models, alter international economic relations, and find creative ways to power their operations in global markets. To stay ahead of the competition and increase their market share, digitalization has become an essential strategy for Kenyan commercial banks. Kenyan commercial banks are experiencing massive digitization in an effort to break into foreign markets; hence the results of previous studies may not be applicable to them. Finding out how digitization has affected Kenyan commercial banks' ability to break into foreign markets was the driving force for this research. The Uppsala model and the notion of transaction costs in economics were supplementary to the Diffusion of Innovation theory, which served as the research’s primary theoretical framework. The research used a descriptive research design that was cross-sectional. Six overseas branches of Kenyan commercial banks served as the research’s unit of analysis. Group directors from the following departments: technology, business, marketing and communication, shared services, corporate affairs, and finance were among the 36 executive regional managers who took part in the survey. We distributed the questionnaire to the participants. The research relied on secondary data collection methods. Descriptive and inferential statistics were employed to analyze the primary data, and secondary data was consulted to support the results of the primary data analysis. According to the research, all six of the commercial banks have increased their client growth rate and digitized some aspect of their operations or services. Additionally, the study discovered that digitalized customer care, foreign market expansion, and mobile and internet banking all have a strong favorable link. Furthermore, the combined effect of the two independent variables (digitized customer care, internet banking, and mobile banking) accounts for 91.1% of the variation in worldwide market penetration (Adjusted R square). Digitalization significantly affects penetration into foreign markets, according to the study. According to the research, commercial banks can position themselves strategically by taking use of the opportunities presented by digitalized platforms to sell their products and services. Digitalizing their products and services is also important since it gives marketing management and authorities a strategic instrument to break into new markets both locally and globally.