Business analytics and performance of commercial banks in Kenya

Abstract

Businesses that have embraced ICT in their operations are increasingly collecting data from business transactions building up their data assets to a level that may be used as a competitive advantage. Banks are at the front level on this and with the relatively new concept that is Business Analytics they are able to leverage on this to gain competitive advantage and improve their performance. This study focused on commercial banks in Kenya. The objectives of the study were to identify the areas of application of business analytics, the factors that drive adoption and use of business analytics, the challenges faced in application of business analytics and the impact that business analytics has on organizational performance. This study employed a cross-section survey design. This was a census study as the target population was all the 44 commercial banks in Kenya. The respondents to the study were the IT managers or equivalent of the banks and the instrument used for data collection was a questionnaire. Descriptive analysis was performed on the data and regression analysis performed to establish the level of impact of the objectives on business analytics. Results from the study showed that application of business analytics in the banks was at a large extent and the driving factors also were at a large extent. The challenges to business analytics were at a moderate extent. The study showed that business analytics had an impact on performance of commercial banks in Kenya and developed a model for determining the level of impact based on the objectives. Being a relatively new field in Kenya, further study of the concept was recommended so as to bring out more aspects on business analytics and its effect on organizations.