Strategic responses by NIC Bank limited to changes in the banking industry in Kenya
Due to changing Banking Industry in Kenya, banks operating in the country have been compelled to develop strategies that can help them navigate the turbulent business environment. This research project was a case study on NIC Bank Limited. The objective of the study was to determine the strategic responses adopted by NIC Bank Limited to deal with changes in the Banking Industry in Kenya. In order to meet these objectives, primary data was obtained through personal interviews with the informants responsible for developing the strategic responses at NIC Bank. An interview guide was used as the primary data collection instrument. The researcher also used secondary sources of data to supplement sketchy information given by some interviewees. Data was analyzed qualitatively. The study established that the major changes affecting the banking industry in Kenya are: government policies, competition, rise in inflation, changing customer expectations, changing employee expectations and technological changes. The study established that NIC Bank has adopted strategies similar to the other Kenyan banks although it has been more aggressive in some aspects. The study revealed that NIC Bank is using various strategies to respond to changes in the Kenyan Banking Industry. The most notable ones include diversification, good corporate governance, new products and services, products and services differentiation, market segmentation, acquisition, branch network expansion, automation of business processes, innovation, improved customer service, strategic partnerships, marketing, staff training and development, cost containment, use of mature information technology and entering new markets. The study revealed that although the bank has made heavy investments in business expansion, branding, information technology, customer service and staff development; there were some urgent issues that the bank needed to address in order to sustain its growth momentum. The first item was the issue of high staff turnover. The bank needs to review the effectiveness of its staff retention policies. Secondly, the bank seems to have lagged behind in adopting some cost-effective concepts like agency and paperless banking. The bank also risks losing some market share if it does not quickly embrace Islamic/Sharia compliant banking. The bank also needs to come up with a policy governing the use of social media advertising to safeguard its reputation. The bank also needs to address the human resource issues that arise following mergers or acquisitions. Finally, the study concludes that NIC Bank has managed to build some competitive advantages that can be further exploited to sustain its profitability and growth momentum.