Application of electronic banking as a Competitive strategy by commercial banks in Kenya
The Banking industry has been undergoing significant transformation in an endeavor to offer world class service to its customers. The model of this transformation has been the change in technology and therefore innovation has been taking place from time to time.ICT is at the centre of great change and transformation and therefore banks would not like to lag behind. It is in line that commercial banks have been investing heavily on technological upgrade in order to keep abreast with modem developments and improve on service delivery to the customers. The study focused on the application of e-banking as a competitive strategy by commercial banks in Kenya. The aim of the study was to establish the level of adoption of electronic banking by the commercial banks in Kenya. The population consisted of all the 43 commercial banks and a self administered questionnaire was sent out to all the E-Channels managers in each of the 43 banks. The study showed that majority of the banks undertaking e-banking belonged to Tier II with an asset base of between 50billion and 60billion with a representation of 46.4%. The most popular services were Electronic funds transfer and Swift services and were ranked the highest (71.4%). Another finding showed that customers generally look for convenience while banking and they prefer channels that enable them to save time. The study recommends that the Government should issue licenses to banks when new products and services are introduced to the market. The study revealed that there are various challenges while dealing with e-banking services and one of them was lack of secure networks which could lead to loss of customers' funds. The future researchers may study on how to make e-banking secure and offer solution(s) to the banks with a view to improve on the threat of insecurity. Another future study may address connectivity to the rural areas as compared to the urban centers. This will enable the rural population to access e-banking services. Due to unauthorized access by fraudsters, the future researchers may also study on system developments that can detect fraud or criminal activities on line. The implication of this study on Resource based view theory and Dynamic capabilities is that the commercial banks of Kenya have gained competitive advantage by adopting new technology to meet the demands of their ever changing consumption habits of their customers. The study suggested various measures to the banks' management and the CBK which is a regulating authority for banks. Some of the measures included tightening the security of the e-banking products and services in order to safe guard the customers' funds. Practically, commercial banks have to keep abreast with the rapid change in technology and constantly invest in the latest technology in order to sustain their profitability.