The impact of the growth of information and communication technologies (ICT) on the Kenyan financial services sector: a survey of selected financial services institutions in Kisumu, Kenya.

Abstract

In Kenya today, developments in the field of information and communication technologies (lCT), are gathering momentum at a rapid rate. It is imperative, therefore, that organizations both in the private and public sector must modernize and automate their systems and processes in order to improve efficiency in production or service delivery. The purpose of the study was to identify the impact of the growth of ICT on the Kenyan financial services sector, by focusing on selected financial institutions based in Kisumu, Kenya. Based on the results of the survey, the researcher recommends that the financial services institutions must constantly upgrade their ICT systems so as to provide modern financial services to the customer. This recommendation is premised on the findings that applications and systems that are currently in use by some of the financial services institutions are completely outdated and inefficient. These facilities and services do not provide the institutions with the all the information required to enable them efficiently and effectively manage the needs of both their internal and external customers. In a large number of institutions, the ICT facilities and services need to be upgraded to enable the institutions reap the full benefits of ICT. The activities involved in the task of upgrading include: replacing all existing outdated computer mainframe systems with new server- based systems, replacing all inefficient existing outdated, in-house developed systems and applications with up-to-date commercial off the shelf (COTS) systems, acquiring new methods of supplying and sharing data among departments, branches and head offices and working closely with users departments in carrying out user needs assessments and developing training programmes aimed at providing relevant lCT knowledge necessary to improve staff and organizational efficiency. The financial services sector will, however, get the full benefits of lCT only after adequately resolving the Issue of constraining factors such as: lack of qualified lCT managers, lack of adequate lCT skilled staff, limited in-house lCT technical back-up, limited in-house computer applications development skills, and lack of lCT project management skills among key staff. This is in addition, to resolving the issues relating to: lack of policies on lCT, lack of lCT Strategic plans, inadequate computer hardware and network facilities, outdated computer hardware and software, outdated lCT application systems, lack of formal lCT training programs for managers and staff, as well as inadequate budgets for modern lCT services and facilities. Chapter one gives a detailed introduction to the study, chapter two reviews literature relevant to the study, chapter three discusses the study methodology while in chapter four, the study findings are presented. Discussions, conclusions and recommendations on the study are given in chapter five. Section six lists the references, and lastly the annexes section contains a copy of the study instruments and a map of Kenya showing the location of Kisumu.