The effect of mobile banking on financial performance of commercial banks in Kenya

Abstract

Innovations such as mobile banking are developed to provide solutions to existing challenges. Although mainly driven by futuristic technology, such solutions are expected to alleviate contemporary issues. In this study, the effect of mobile banking on the performance of commercial banks in Kenya was studied. The descriptive study aimed at identifying the specific effects of adoption and increased usage of mobile banking. The research was performed through a census study of 44 banking institutions in the country focused on establishing the extent to which metrics of financial performance. Through linear regression, the study focused on changes in the volume of deposits and withdrawal, value of loans uptake, payments of utilities, statements requests and funds transfers. The survey resulted to collection of data for 34 of the prospective 44 banking institutions. Through the regression model indicated, the data was analysed. Descriptive statistics indicated that mobile banking had a positive effect on the performance of banking institutions across all variables. ANOVA tests indicated that the effects of mobile banking were statistically significant in predicting the performance of commercial banks in Kenya. Correlation tests indicated a weak positive correlation between the performance of banking institutions and mobile banking in the country. It was thus concluded that mobile banking was fast becoming an integral part of banking in the country, and still presented great potential in its ability to influence the performance of the commercial banks in the country. Future studies focusing on the performance of specific banking institutions spearheading mobile banking is necessary to eliminate the pitfalls and effects of smoothing