Strategies used by commercial banks in Kenya to manage operational costs

Abstract

Commercial banks like any other institution require sustainability. Any organization over time needs to sustain itself through cost management. The objective of this study was to determine the strategies that are used by commercial banks in Kenya to manage operational costs. The study used cross sectional descriptive survey design in collecting data from the respondents. The target population consisted of all the 43 commercial banks operating in Kenya. Questionnaire was the data instrument used in collecting the primary data. The questionnaire comprised of open ended and closed ended questions which allowed for the collection of as much details as possible. After the collection of data, it was thoroughly examined and checked for completeness and inconsistencies. The data was then summarized, coded and tabulated then analysed using quantitative techniques. In the findings of the study established that commercial banks need to recognize the various cost drivers that affect their operations. The study concluded and recommended that commercial banks need to adopt a number of strategies to manage costs which include mergers and acquisitions, restructuring, business process reengineering, consolidation of business functions, rationalization of staff fringe benefits, marketing reduction, outsourcing, customer re-organization and technological upgrade