Big Data Analytics and Competitive Advantage of Commercial Banks and Insurance Companies in Nairobi, Kenya

Abstract

This study focussed on big data and competitive advantage in commercial banks and insurance companies in Nairobi, Kenya and was dependent on the following objectives: To establish the extent of application of big data analytics in commercial banks and insurance companies in Nairobi; to determine the relationship between big data analytics and competitive advantage of commercial banks and insurance companies in Nairobi; to establish the challenges of big data analytics in commercial banks and insurance companies in Nairobi. A descriptive survey was employed for the purpose of data collection for this research. The population targeted for this study was commercial banks and insurance companies in Nairobi, Kenya. There are 42 commercial banks and 49 insurance companies in Nairobi. A sample of 20 commercial banks and 25 insurance companies was undertaken due to the limited time allocated for data collection and analysis. The sample was selected based on a judgmental basis taking into account the companies’ use of big data analytics. This research used primary data collected using structured questionnaires. The respondents were managers dealing with company strategies and/ or information and technology managers in the selected companies. The data was analyzed using frequencies, percentages, mean, and standard deviation and regression techniques. The study found that companies in the financial industry specifically commercial banks and insurance firms have invested in data storage facilities and advanced tools in the area of business intelligence for reporting and analysing consumer/ client behaviour. These tools allow the companies to anticipate consumer needs more effectively, in addition to optimizing their operations. The addition of big data analytics systems in the companies’ daily routines enables them to gain higher levels of insight in the big data environment thus enabling more effective decision making. There are challenges in management of big data that if addressed can help organizations appreciate the full potential of big data tools and various analytics especially in aspects of competitive advantage. This study, through a thorough analysis of its findings concludes that the big data revolution has found a place in the commercial banking and insurance industry in Nairobi, and that the trend is on the rise as these companies continue to discover the valuable data with tremendous potential they have had in their storage for decades.