The relationship between the level of Technological innovation and financial Performance of commercial banks in Kenya

Abstract

Commercial banks in Kenya are at crossroads. The new electronic age has transformed the delivery of banking services. Customers nowadays demand new and differentiated financial products and services. In essence banks must search for new strategies of delivering their products and services. With pressure from dynamic and advancement of technological innovation, different electronic distribution channels have been adopted to meet the demands of customers. The main objective of this research is to determine the relationship between the level of technological innovation and financial performance of the commercial banks in Kenya. This study used a descriptive survey owing to the small number of commercial banks in Kenya. The data for this study was obtained from primary source with the use of well structured and pre-tested questionnaires which were distributed among management team of Kenyan banks. The study concluded that commercial banks have continuously employed various technological innovations which include ATM services, Electronic money transfers, mobile banking, internet banking services and online account opening. The study concludes that technological innovations have lead to increased financial performance of commercial banks in Kenya through increased bank sales, return on equity and profits increment. The study recommends that for banks to meet their customers needs and remain competitive then they need to employ modern technological innovations such as internet based banking and online account opening at a great extent. v TABLE OF