Relationship between electronic banking and financial performance of commercial banks in Kenya
Banking industry has been in a process of significant transformation. The force behind this transformation of the banking industry is innovation in information technologies. Information and communication technology is at the centre of this global change curve of electronic banking system in Kenya today. While the rapid development of information technology has made some banking tasks more efficient and cheaper, technological investments are taking a larger share of bank's resources. Currently, apart from personnel costs, technology is usually the biggest item in the budget of a bank, and the fastest growing one. Another problem associated with this financial innovation plastic card fraud, particularly on lost and stolen cards and counterfeit card fraud. Banks need to manage costs and risks associated with electronic banking, while adopting and using IT to improve their performance and increase profitability. It is against this background, this study intend to investigate the relationship between ebanking and performance of Kenya banking system. Specifically, the study established whether there is relationship between the dependent variable i.e., performance measured by return on assets and the independent variables: investments in e-banking, number of A TMS and number of debits cards issued to customers as proxy for e-banking. The study investigated 26 commercial banks in Kenya. The study used secondary data. The data was collected from annual report of target banks and Central Bank of Kenya. The study used both descriptive and inferential statistics in analyzing the data.