Determinants of Mobile Banking Revenues: a Case Study of Cooperative Bank of Kenya

Abstract

This study investigated the determinants of mobile banking revenues in Kenya focusing on cooperative bank of Kenya as a case study. The study had four objectives namely; to determine the relationship between the number of uptime hours and mobile banking revenues; to determine the impact of transactional charge on mobile banking revenues; to determine the effect of the number of active subscribers on mobile banking revenues; to determine the impact of advertising budget on mobile banking revenues. The study used quarterly time series data for the period between 2004 and 2013.We employed Augmented Dickey Fuller test to test for stationarity, Johansen co-integration test to test for co-integration and the Vector Error Correction Model. The results of the research showed that one period lag in mobile banking revenue, advertisement expenditure and customer numbers had a positive and significant impact on mobile banking revenue. In conclusion we argue that for local banks to reap maximum mobile banking revenues they should focus on increasing the number of customers registered for the service, plough back previous period revenues in expansion of mobile banking infrastructure and spend more on advertisement and publicity of the service.