Extent to Which Technology Risks Affect Information Technology as a Competitive Tool in the Banking Industry in Kenya

Abstract

The study sought to establish the extent to which technology risks affect Information Technology as a competitive tool in the banking industry in Kenya. Towards the achievement of the objectives, the study adopted a descriptive research design in which involved distribution of questionnaire to the banks. A good response rate of 79% was realized. The study also established a regression and correlation analysis between the dependent variable and the independent variables. The findings of the study was that banks in Kenya have adopted the use of Information Technology as a competitive tool for various functions namely email, clearing, core banking, m-banking, internet banking among others, further the research established that indeed technology risks like ATM Skimming, Electronic Funds Transfer, Fake e-mails, Viruses, Keyloggers, Denial of Service among others do affect technology as a competitive tool as banks have lost about substantial amounts in the last five years. The research also found out that banks in Kenya have created functions specifically dealing in addressing or tackling the technology based risks by having electronic investigative capabilities within their audit, security and forensicdepartments. The banks also use external consultants and ultimately the banking fraud investigations unit within the Central Bank for investigations and subsequent prosecution.