Factors Influencing the Application of Technology to Enhance Efficiency of International Banks in Kenya

Abstract

The main purpose of this study was to determine factors influencing the application of technology to enhance efficiency of international banks in Kenya. The study arose because of the fast-changing competitive environment, globalization, economic changes, regulation, privatization and the like demands that banks are run efficiently and effectively by continuously engaging in technological innovations. There is a wave of rapidly evolving technology. Technology is changing the face of banking completely. A rapidly evolving business environment is causing the global banking industry to rethink the way it leverages technology. Market growth objectives, the desire to create a globally integrated multichannel environment, and managing the complexity of new products are placing increasing pressure on global banking institutions to move toward a bank of the future paradigm. The transition to this future state requires banks to realign their technology environment and, more importantly, their IT applications portfolio. There is increasing focus on customer centricity. While banks push hard for cashless, branchless future, ultimately it is the consumers who accept or reject the techno heavy banking systems. Banks face serious future strategy challenge. The basic structure of the bank is increasingly in conflict with the changing product delivery, and service needs o f the customers. The future belongs to the financial e service providers and not traditional banks. Banks will have to first develop a comprehensive distribution system that will enable customers to touch them at multiple points. Banks must also create performance measurements systems to ensure the mix of products and services they offer are beneficial to both the customer and the bank. They must determine whether to deploy new technologies themselves or with other service providers. Nevertheless, technology will not solve issues or create advantages. This technology needs to be integrated in an organization, with the change management issues linked to people resisting new concept and ideas. Banks will also need to support a clearly defined and well communicated business strategy. Into the future banks technology budgets are expected to continue increasing as newer technologies occupy banking space. But with an economic on recovery, and with regulatory scrutiny more intense than ever, banks IT investments are likely to be focused largely on driving efficiencies and complying with new requirements. IT innovation in banking sector has failed to focus much attention on the impact of these technological innovations to enhancing efficiency of international banks in Kenya. This study adopted survey research design and targeted 13 international banks in Kenya. Both secondary and primary data was used. A statistical package for social sciences (SPSS Version 20.0) was used. From the findings of the study it was concluded that electronic fund transfer, the card system and ATM availability influence technology application in international banks and banking in general which has set the stage for exceptional increase in financial activity across the globe. Thus the study findings recommended that international banks should ensure free flow of information and adequate use of technology in decision making in strategic and tactical planning. International banks should think of creative approaches to ensure that the respectful department has more time to experiment with integrating technology on service delivery and focus on using technology to enhance efficiency rather than the acquisition of infrastructure. This will help to create value networks and counter the challenges