Mobile Banking as a Competitive Advantage Tool: A Case of Chase Bank of Kenya

Abstract

This study sought to investigate the use of mobile phone banking as a source of competitive advantage at Chase Bank. To investigate competitive advantage, the study analyzed the effect of mobile banking on customer satisfaction levels, the effect of mobile banking on overall operational efficiency and effect of mobile banking on overall organization performance of Chase Bank Kenya ltd. The study utilized a descriptive research design using Chase bank Riverside branch for the study. In total the number of customers was 1,500 over the study period and number of employees was 40. The study was conducted during the month of October 2016. Using Yamanes formulae, a total of 400 customers and 12 employees were selected for inclusion in the sample size using stratified random sampling. Data for the study was collected using a questionnaire personally administered by the research to enhance a high response rate. After data collection, descriptive statistics analysis was undertaken to establish patterns through the use of frequency distribution tables. To infer relationships, Pearson’s correlation coefficient analysis was undertaken. Analyzed data is presented in tables and figures for ease of interpretation and presentation of findings. The study found that the use of mobile in Chase Bank of Kenya was a key competitive advantage strategy tool. Mobile banking use enhanced overall customer satisfaction and a positive significant correlation exists between mobile banking use and customer satisfaction. Mobile banking use enhanced customer convenience, perceived efficiency, perceived efficiency, perceived security and perceived ease of access which were key drivers of customer satisfaction and thus a source of competitive advantage. In addition, the study found that the use of mobile banking had a negative correlation to operational efficiency. The use of mobile banking led to reduced operational costs for Chase bank. Some of the costs reduced by mobile banking were: customer service costs, employee related costs, administrative expenses and new branch set up expenditure. Finally, the study found that there was a significant positive correlation between mobile banking use and the levels of organization performance. The use of mobile banking enhanced revenue generation, individual customer revenues, improved profitability, product development, innovation and distribution to customers. Finally, customer attraction, retention and loyalty levels improved because of mobile banking use at Chase bank. This study concluded that mobile banking and use of technology at Chase Bank is a key competitive advantage tool and strategy. The use of mobile banking at Chase Bank enhanced customer satisfaction levels by enhancing the reliability, security and convenience of customers in accessing banking needs and services. This study concluded that a negative significant correlation exists between mobile banking and operational costs. Finally, the use of mobile banking increases the total revenues of the bank and reduces the total costs. This improves the total profitability and asset utilization in the company. The study recommended that Chase Bank explores the possibility of introducing mobile credit on their mobile banking platform. Further, massive employee and customer education awareness be undertaken on the use of mobile banking. Finally, the study recommended that Chase bank leverages on mobile banking as a key customer relationship management tool.