Online Banking Strategies and Competitive Advantage of Commercial Banks in Kenya

Abstract

Competitive advantage is created through implementing unique value-creating strategies based on unique combinations of internal organizational resources and capabilities that cannot be replicated by competitors. Competitive advantage is important because it has a significant impact on the success and sustainability of the business. The creation of competitive advantage through online banking strategy implementation is not assured. The objective of the study was to determine the online banking strategies and competitive advantage of commercial banks in Kenya. The study used primary data which was collected using questionnaires from 43 commercial banks in Kenya. The data was then analysed qualitatively to derive findings, conclusions and recommendations. The results indicated that most commercial banks implemented online banking strategies, although there are challenges faced such as inadequate technological skills, lack of commitment from senior management, security fears and hesitance of organization to recruit specialized staff. Recommendations called for the increased investment in the research and development of technology required for online banking to enhance competitive advantage.