Investigating the Effects of De-Risking On Financial Services A Case of Commercial Banks in Kenya

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dc.contributor.author Mwaniki, Caroline Rose
dc.date.accessioned 2020-01-22T08:31:05Z
dc.date.available 2020-01-22T08:31:05Z
dc.date.issued 2019
dc.identifier.uri http://erepo.usiu.ac.ke/11732/5258
dc.description A Research Project Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Master in Business Administration (MBA) en_US
dc.description.abstract The purpose of this study was to investigate the effects of de-risking on the financial activities of Commercial Banks in Kenya. The research questions that guided the study were: What are the factors leading to de-risking in the banking sector in Kenya? What are the effects of de-risking in the banking sector in Kenya? What strategies and policies are directed towards managing de-risking in the banking sector in Kenya? This research was conducted in Nairobi, Kenya and focused on a sample of twenty-one Commercial Banks. The respondents of the research comprised of senior banking officials from each of the Commercial Banks. Descriptive and inferential research designs were utilized. Data was collected by use of a questionnaire and analyzed using Statistical Package for Social Sciences (SPSS). This was conducted by using descriptive analysis and correlation analysis. The related results were presented in tables and reports to facilitate interpretation of data and drawing of conclusions and recommendations. The study established that factors leading to de-risking were mainly anchored on regulatory requirements which dictate the regulations for complying with Anti Money Laundering (AML) and Combating Financing of Terrorist (CFT) activities policies and given standards. The associated compliance costs and hefty AML fines experienced by the correspondent banks globally were also seen to be a major contributing factor to de-risking in the banking sector in Kenya. There was a positive relationship between de-risking, cross-border payments and financial inclusion but the study concluded an insignificant correlation between de-risking and Trade Finance Services. Banks maintained closely knitted relationships with their correspondent banks to minimize the risk of losing their accounts and credit limits. The study also concluded that harmonizing regulatory requirements with the aim of combating financial crime amongst the various regulators both at a local and global level is instrumental in facilitating compliance and ultimately reducing the pressures of de-risking. The study additionally showed that training and boosting of compliance departments were key strategies adopted by banks to reduce the impact. The study recommends that Banks revamp their Risk departments and training policies to ensure continued regulatory compliance. Further the impact of leveraging on Fintech (Financial Technology) and Regtech (Regulatory Technology) innovations and its effect on de-risking should also be considered for further exploration. en_US
dc.language.iso en en_US
dc.publisher United States International University - Africa en_US
dc.subject Financial Services en_US
dc.subject Commercial Banks en_US
dc.subject Kenya en_US
dc.title Investigating the Effects of De-Risking On Financial Services A Case of Commercial Banks in Kenya en_US
dc.type Thesis en_US

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