The impact of mobile banking on financial performance of commercial banks in Kenya
This study sought to determine the impact of mobile banking on the Financial Performance of Commercial Banks in Kenya during a period of five years. Banks, aided by technological developments, have responded to the challenges by adopting a new strategy, which emphasizes on attempting to build customer satisfaction through offering better products and services and at the same time to minimize operation costs. The need/wish for mobility seems to be the driving force behind mobile commerce in general hence the provision of mobile banking services has been broadly used. The study adopted a causal research design. It studied the 43 Commercial Banks in Kenya for a period of five years between 2008 through 2012, data secondary in nature, was drawn from the published financial reports of commercial banks and the Central Bank of Kenya reports. Analysis involved multiple regressions of variables under study that is the financial performance represented by return on assets, the investment in mobile banking measured in Kenya shillings, the number of registered mobile banking customers by the banks and the number of mobile banking transactions by the banks. From the regression model of 5 years the study found evidence of positive relationship between mobile banking and bank performance. The study results show that Mobile Banking has a moderate influence on profitability of commercial banks in Kenya. Thus, there exists positive relationship between mobile banking and bank performance. Based on the summary of the major findings of the study it can be concluded that mobile banking offers banks several opportunities for increasing revenues. From the investment in mobile banking measured and the number of mobile banking transactions by the banks have a positive relation to the return on asset (ROA) in that a unit increase in each / or all would result in an increase in the performance indicator ROA. The study recommends that commercial banks should therefore continue to adopt new technologies which will improve their margins and hence their profitability. Government policy makers should also review policies related to promotion of innovation and transfer of technology that will improve profitability of organizations because it will convert to better tax revenues for the government.