Outsourcing Strategies Among Commercial Banks in Kenya

Abstract

This study sought to establish the outsourcing strategies among commercial banks in Kenya. The study was guided by three objectives: to find out the functions that are commonly outsourced among commercial banks in Kenya; to establish the extent of outsourcing among commercial banks in Kenya and to establish the challenges facing outsourcing strategies among commercial banks in Kenya. The study took the form of a descriptive cross sectional survey design and the target population of the study was 43 commercial banks operating in Kenya. Primary data was collected using questionnaires that were administered through drop and pick later method. Percentages and frequencies as well as descriptive statistics such as mean were used to analyze the data. The findings were presented in tables and figures. The study established that commercial banks in Kenya outsource a number of functions such as security services, transportation services, Automated Teller Machine management services, training of employees and recruitment services. Some functions re core to the banks and are not outsourced and they include facility appraisal and account opening. Some functions are fully outsourced such as security services, catering services, Automated Teller Machine management services as well as advertising and marketing. Functions that are partially outsourced cash management; custodial services; training of employees; transportation services; custodial services; information technology applications and recruitment services. The most prevalent challenges of outsourcing among commercial banks in Kenya include: resistance to change; inability to develop clear outsourcing objectives; lack of proper communication to stakeholders; lack of top management support and lack of supporting structures. The study recommends that top management support should be sought when `undertaking outsourcing activities