Effect of technology adoption on agency banking among commercial banks in Kenya
Nowadays due to emerging global economy, electronic commerce and electronic business have increasingly become a necessary component of business strategy and a strong catalyst for economic development. Despite the undeniable importance of technology in banking operations, the impact is still misunderstood. Lack of access to financial services has been a significant challenge to development in Kenya‟s financial sector. Consequently, there is still a wide gap in access to financial services, particularly for low income earners as they are not provided with formal financial sector services following high operational costs associated with banks opening branches within their locality. Previous studies on agency banking in Kenya have not looked at how technology adoption affect agency banking. The purpose of this study was to investigate the relationship between the use of technology adoption and agency banking of commercial banks in Kenya. This study adopted descriptive research design based on the key areas of interest. The population of interest in this study comprised of the 43 commercial banks operating in Kenya as at December 2012. From the 43 commercial banks operating in Kenya, the study used purposeful sampling to pick six commercial banks that had implemented agency banking according to the Central Bank of Kenya (2012). In this study emphasis was given to secondary data which was obtained from the financial results filled at Central Bank of Kenya and Annual Banking Survey reports. In order to test the relationship between the variables the inferential tests including the regression analysis were used. The study concludes that generally technology has a positive influence on the agency banking in Kenya. The study also concludes that e-banking is used as a complement to, rather than a substitute for, physical branches. The study recommends that e-banking should be used as a complement to, rather than a substitute for, physical branches. The study also recommends that there is need to understand the changes that technology was causing on the banking sector in order to examine in detail how the recent and foreseeable advances in technology was affecting the various aspects of the banking sector and can affect its future evolution.