Benchmarking Practices Used by Commercial Banks in Nairobi

Abstract

Financial institutions including commercial banks have since the mid 1980s and 1990s adopted continuous improvement techniques such as benchmarking to build organizations that are internally and externally geared towards building efficiency in the industry. Benchmarking has been described as among the easiest to implement requiring few resources and delivering superior value. This paper sought to investigate whether commercial banks in Kenya benchmark, and if they do, in what specific areas of their operations, evaluate the success as well as the challenges they encounter in their quest to benchmark. Primary data was collected using a questionnaire, designed to be completed by respondents in the commercial banks. The data was then checked for completeness and analyzed using descriptive statistics. The survey reveals that indeed most commercial banks benchmark and management support is critical for its success. Secondly, most institutions chose benchmarking partners from those in the same industry or line of trade. The paper concludes by a confirmation that benchmarking has had a tremendous effect in improving the operations of many firms and will continue to play a critical role in their success going into the future