Financial Innovation Strategies and Performance of Commercial Banks in Kenya
DOI:
https://doi.org/10.47672/jsm.1130Keywords:
Financial innovation strategies, performance, commercial banks.Abstract
Purpose: The purpose of the study was to establish the impact of financial innovation strategies on performance of commercial banks.
Methodology: The study used census approach and targeted all the 41 commercial banks in Kenya. This is because the population is small. Senior Operations and the Senior Finance managers working in the headquarters of the commercial banks were targeted. This was therefore a total of 82 respondents. The research adopted cross-sectional survey. The study used both primary and secondary data. Primary data was collected using questionnaires while Secondary information was acquired from the commercial banks' audited financial statements. After quantitative data was obtained through questionnaires, it was prepared in readiness for analysis and keyed into statistical package for social sciences (SPSS) computer software (version 22) for analysis.
Findings: Results from both primary and secondary data showed that financial innovation strategies had a positive and significant effect on performance of commercial banks.
Recommendation: Policy makers have to be wary about increasing level of competition in the banking industry and put in place appropriate competitive strategies to mitigate the challenges that come with the competition. These competitive strategies will enhance their performance and eventual survival in the industry.
Downloads
References
Githakwa, W. (2014). The relationship between financial innovation and profitability of Kenyan commercial banks. Unpublished MBA project, University of Nairobi
Ignazio, V. (2017). Financial deepening and monetary policy transmission mechanism. BIS Review, 124, 2007-2018.
Kiiyuru, K. D. (2014). Effects of innovation strategies on performance of commercial banks in Kenya. Doctoral dissertation, School of Business, University of Nairobi.
Kiptoon, C. K. (2014). The Impact of the Blue Ocean Strategy on The Performance of Bamburi Cement Limited in Kenya (Doctoral dissertation, Doctoral Dissertation, School Of Business, University Of Nairobi).
Kungu, G., Desta, I., & Ngui, T. (2014). An assessment of the effectiveness of competitive strategies by commercial banks: A Case of Equity Bank. International Journal of Education and Research, 2(12), 333–346.
Lieberman, B., & Montgomery, B (1987). First- mover advantages. Research paper No 969, 10-30
Mabrouk, A., & Mamoghli, C. (2014). Effect of financial innovation on performance of banks. International research journal of finance and economics, 5, 2010.
Makur, G., (2017). Role of innovation on performance of banking sector. International journal of finance, 4(2), 97-111.
Matheka, J. R. (2016). Effect of blue ocean strategies on competitive advantage of microfinance institutions in Kenya, Journal of Business, 7(2) 45-49
Munywoki, K. (2016). Effects of innovation on financial performance of commercial banks in Kenya. Doctoral dissertation, School of Business, University of Nairobi.
Nyamongo, E., & Temesgen, K. (2015). The effect of governance on performance of commercial banks in Kenya: a panel study. Corporate Governance: The international journal of business in society, 13(3), 236-248.
Obamuyi, M., (2013). Determinants of banks’ profitability in a developing economy: evidence from Nigeria. Journal of organizations and markets in emerging economies, 4(2), 97-111.
Oloko, M. (2012). Influence of relationship marketing on Performance of commercial banks in Kenya. Education Research Journal, 2(2), 37-42.
Oluwatolani, O., Joshua, A., & Philip, A. (2014). The impact of information technology in Nigeria’s banking industry. ArXiv preprint, (9), 1108.1153.
Rogers, M. (1995). Diffusion of Innovations, New York: Free Press
Rogers, M. (2010). Diffusion of innovations. Simon and Schuster.
Sandvik, L., & Sandvik, K. (2003). The impact of market orientation on product innovativeness and business performance. International journal of Research in Marketing, 20(4), 355-376.
Sia, K., Soh, C., & Weill, P. (2016). How DBS Bank Pursued a Digital Business Strategy. MIS Quarterly Executive, 15(2).
Tufano, P. (2015). Financial innovation. Handbook of the Economics of Finance, 1, 307-335. Elsevier.
Tushman, L., & Anderson, P. (1986). Technological discontinuities and organizational environments. Administrative science quarterly, 439-465.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Abubaker Ramathan Mukira, Dr. Paul Kariuki, Prof Willy Muturi
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
