Business intelligence and competitiveness of commercial banks in Kenya

Abstract

The rapidly changing business environment has introduced a number of challenges that organizations have to deal with to remain competitive. It has become increasingly crucial for businesses to make decisions not only faster, but smarter especially for businesses that operate in a highly dynamic market with changing client demands and fierce competition. This study was guided by four objectives including; to find out the various BI technologies employed by commercial banks and how they are utilized, to examine the personnel capacity to use BI, to investigate whether application of BI systems improve a bank’s competitiveness, and to examine the various challenges faced by the management in implementation of BI systems. This study adopted a cross section survey design which aimed at finding out the prevalence of an issue by taking a snap-shot of the population at the time of study. The population of interest in this study consisted of all 44 commercial banks operating in Kenya. The sample size included the same number in the population, specifically comprising of ICT managers, Operations managers, BI heads and BI users. For the commercial banks sampled, the study concluded that through the application and utilization of the BI systems; strategies for product diversification, product development, market development and market penetration are effective in achieving competitiveness are highly effective, the level of product innovation has gone up, the level of customer satisfaction, customer loyalty and retention in the banks has improved, banks are experiencing growth in size, increase in sales and profit as well as increase in market share as compared to other banks. This study recommends that the management of the respective banks to strategize and embark on capacity building so as to enable the staff be able to use some of the BI technologies they are not aware of, and that the management seek strategies towards mitigating the so many challenges related to use of the BI system in their banks. In this case, the management needs to establish the risks at once and thereafter establish the right counteractions towards each of them. This way, the competitiveness in the banking sector, in each of the banks too will be realized. Risk management enables bank to monitor and control the sizes and concentrations of risks resulting from its activities such as lending money to their customers