The effects of E-banking in commercial banks in Kenya in promoting international business

Abstract

The essential role of banks in international and national economies is to is to connect those who have capital (such as investors or depositors), with those who seek capital (such as individuals wanting a loan, or businesses wanting to grow) which is the general definition of banking (Macesich (2000)).Banks are a fundamental component of the financial system, and are also active players in the financial markets. With continuing technological innovation and competition among existing banking organisations and new market entrants has allowed for a much wider array of electronic banking products and services for retail and corporate banking customers. Hence the introduction of E-Banking services which include telephone banking, online banking, SMS Banking, Mobile Banking and Interactive TV- Banking. From the research project the Banks that were offering E-Banking Services only offered limited E-Banking services. The main benefits were also captured which included cost savings, reaching new segments of the population, efficiency, better customer service and satisfaction. Basing on these facts the study‟s main objectives was to identify effects of E-banking services on the commercial banks in Kenya on promoting international business while establishing how its adverse effects are mitigated. The study was conducted on all the commercial bank s operating in Kenya. The data was collected by use of questionnaires with both open and close ended questions. Descriptive statistics was used to analyse the data by way of tables, bar graphs and percentages. Several risk factors such reputation risk, operation risk, and credit risk, were identified as the most risks faced by banks in providing E- banking services. These risk leads to losses in form of electronic frauds and recommendations to reduce the E- banking risks, such as security enhancement, technology infrastructure, reliable power supply, and proper registration were given.