The Impact of Mobile Banking On Commercial Banks in Kenya

Abstract

The main purpose of this study was to establish the impact of mobile banking on commercial banks in Kenya. The study focused on the following research questions: what are the factors influencing mobile banking in Kenya, how has mobile banking influenced the reduction of transaction costs in banking and what is the effect of mobile banking on financial accessibility.

The study adopted a descriptive research design. The research design was applied to a population of 200 Master of Business Administration (MBA) students in The United States International University – Africa (USIU – A) that used mobile banking. The design was appropriate because the study seeked to build a profile about the impact of mobile banking on commercial banks in Kenya. A further sample of 70 students in the population were requested to take part in the study. A close ended structured questionnaire was used to collect the data. The data was evaluated and deduced using descriptive statistics through frequencies, percentages and regression analysis. Excel was the tool used in this study for analysis.

The study found that majority of the respondents adopted the use of mobile banking due to its ease of use, quick transactions and ability to conduct transactions wherever they are situated. The study also found that majority of the respondents are do not live or work near their domicile bank branch. Through this mobile banking reduces the transaction costs in regards to time and distance because they can perform banking transactions despite not being near the bank branch. The study also found that the simplicity and usefulness of mobile banking is one of the major influencers and increases financial accessibility in that customers can not only perform banking transactions but also make other payments e.g. Utility payments.

The study concluded that the cost of mobile banking was not a huge factor in influencing mobile banking in that due to different banking taarifs over the counter transactions would relatively cost the same. The study also concluded that the threat of fraud and privacy were a major concern for customers in that they felt that there were more susceptible to fraudulent activity and identity theft due to their information being readily available. The study recommended that in regards to the cost of mobile banking, the regulators should come up with a standard price against all bank taarifs. In regards to the threat of fraud associated with mobile banking, the study recommended that the bank should ensure that all measure are taken to prevent fraud including hiring outside security firms to monitor all activity. Finally, the study recommended that the bank should ensure that the mobile banking platform should offer complete privacy to the end user including the use of asterix (*) or dots (.) to block out the pin number when the end user is performing a mobile banking transaction.