Extent and challenges of application of information and communication technology in marketing in commercial banks in Kenya

Abstract

This study concerns the extent and challenges of application of Information and Communication Technology in Marketing in commercial banks in Kenya. The study has two objectives, namely, to investigate the extent to which Information and Communication Technology has been applied in marketing by commercial banks in Kenya and to determine the challenges of applying Information and Communication Technology in the marketing function of banks in Kenya. The need for the study arose as a consequence of increased competitiveness among banks. This has seen banks increasingly adopt Information Communication Technology in their Marketing functions. Thus the motivation to assess the extent and challenges this new wave has occasioned. The study employed a survey design. The population of study consisted of 43 banks headquartered in Nairobi. Since the population was small, a census study was conducted. Primary data was collected from 32 respondents. 19 respondents were working directly in the marketing function although they had customized titles. The remaining 13 respondents had wider functional roles in their banks, as indicated by their titles. Data collection was done using a questionnaire consisting of open-ended and closed-ended questions and five point Likert-type scales. Data analysis was done using descriptive statistics (consisting of frequencies, percentages, means and standard deviations) and factor analysis. The latter involved Principal Component Analysis. Regarding the extent to which Information Communications Technology has been applied in marketing, the findings of the questionnaire indicated that credit contact information systems (system that provide credit information and manage credit history of customers) were the most widely used followed by computer software (application or general purpose software like spreadsheet or word processing). Delivering banking services was the marketing aspect where Information and Communication Technology was the most widely used, followed by processing of customer enquiries with bank account opening third. With respect to challenges, systems development overrunning budget constraints was seen to be the biggest challenge faced when implementing Information and Communication Technology in the marketing function of the banks. -....• Vll From the literature, the use of Information Communication Technology in marketing was seen to be maturing, as previous piecemeal systems are replaced by integrated suites, which provide a unified view of the customer. This will enable firms to formulate holistic strategies that address all key dimensions of their customer's needs and wants, enabling them deliver superior performance. Key challenges that were seen to afflict Information and Communication Technology enabled Marketing Information Systems include a misalignment between Information and Communication Technology- and Marketing-strategies; and an inability to leverage existing Information and Communication Technology infrastructures to the marketing function. This study recommends that for banks to compete effectively, there is need for more innovative use of ICT systems. This implies embracing concepts such as computer kiosks, distribution channel decision support systems and competitive tracking information systems which based on the findings registered a low level of usage. A more holistic incorporation of lCT across the entire spectrum of marketing activities would also help optimize on ICT utilization in the sector as well as increase the levels of marketing effectiveness and efficiency. In order to improve lCT implementation, the study recommends that overall, firm strategy be aligned well with both marketing strategy and ICT strategy.