Skip to content
Research Article Open access CC BY 4.0

The Influence of E-banking on the Financial Performance of Kenyan Commercial Banks

Justus Mwandoe Mwakera, Marcella Riwo-Abudho, Silas Onyango Abudho

Asian Journal of Economics, Business and Accounting · pp. 332–342 · Published 8 Mar 2024

10.9734/ajeba/2024/v24i41284

Abstract

Aims: The mobile and internet revolution has influenced creation and delivery of financial services leading to more innovative ways of linking customers and partners. Electronic Banking (e-banking) has opened up a new channel of banking resulting in new capabilities for banks as intermediaries. The research questions that the study sought to answer include, the role of mobile banking on the financial performance in Kenyan commercial banks, the effect of Electronic Funds Transfer (EFT) on the financial performance of Kenyan commercial banks. Study Design: The research adopted descriptive design with quantitative data approaches. Place and Duration of Study: The target population was made up of 24 Kenyan Commercial Banks in the North Coast region of Kenya with a total of 240 employees. These banks are top tier lead brands listed in the stock exchange in the banking sector in Kenya between December 2022 and July 2023. Methodology: Strata of top management (section heads), middle managers (branch managers and super agents) and operational employees (lower cadre employees & credit officers) provided 72 respondents. Both secondary and primary data sources were used with the self-administered questionnaires containing both open and closed ended questions. Data analysis included descriptive statistics, correlation and multiple regression on a model of Y = 1.518+ 0.438 X1 + 0.136 X2 + ε. Results: The correlation of the independent variables and the dependent variable was high and positive at 0.697 and 0.573 for mobile banking and Electronic Funds Transfer on financial performance respectively. The value of the adjusted R squared was found to be 0.654. The value of F-statistic was found to be 44.919 and it p-value 0.000. The regression coefficient of mobile banking was found to be 0.438 with a t-statistic value of 6.126. The regression coefficient of EFT was found to be 0.136 with a t-statistic value of 6.182. Conclusion: There is a strong relationship between mobile banking, EFT and financial performance of commercial banks in Kenya. M-banking has significantly reduced operational costs while EFT has increased the number of daily transactions. The study established that the popularity of m-banking has is due to the intensity of technology penetration of mobile phones to bank customers which has resulted in the number of customers registering for m-banking services to increase in the last five years. Commercial banks have also experienced increased ROA and growth in market share with adoption of e-banking.

Electronic banking mobile banking electronic fund transfer financial performance commercial banks

References (29)

  1. 1 How the Internet affects output and performance at community banks [DOI]
  2. 2 Bank competition, concentration and financial stability in the Turkish banking industry [DOI]
  3. 3 Application of Technology Acceptance Model (TAM) in M-Banking Adoption in Kenya
  4. 4 Determinants of awareness and adoption of mobile money technologies: Evidence from women micro entrepreneurs in Kenya [DOI]
  5. 5 Systemic risk, financial markets, and performance of financial institutions [DOI]
  6. 6 Understanding the diffusion and adoption of digital finance innovation in emerging economies: M-Pesa money mobile transfer service in Kenya [DOI]
  7. 7 Disruptions and Digital Banking Trends
  8. 8 IMPACTS OF E-BANKING ON PERFORMANCE OF BANKS IN A DEVELOPING ECONOMY: EMPIRICAL EVIDENCE FROM BANGLADESH [DOI]
  9. 9 Research on Financial Technology Innovation and Application Based on 5G Network [DOI]
  10. 10 Corporate Financial Distress: The Impact of Profitability, Liquidity, Asset Productivity, Activity and Solvency [DOI]
  11. 11 ISLAMIC BANK CUSTOMERS’ ADOPTION OF DIGITAL BANKING SERVICES: EXTENDING DIFFUSION THEORY OF INNOVATION [DOI]
  12. 12 The Influence of E-Customer Relationship Management on Customer Experience in E-Banking Service [DOI]
  13. 13 Strategic Adoption of Technological Innovations on Competitive Advantage of Commercial Banks in Kenya [DOI]
  14. 14 Factors affecting financial performance of Indian firms: an empirical investigation of firms listed on Bombay Stock Exchange [DOI]
  15. 15 The Effect of Electronic Banking on Commercial Banks' Financial Performance in Tanzania [DOI]
  16. 16 Business Opportunities, Start-ups, and Digital Transformation in Africa [DOI]
  17. 17 Mobile Phone Technology, Agency Banking Services, Online Banking Services and Financial Inclusion of Small and Medium Enterprises in Kenya [DOI]
  18. 18 Multichannel Distribution in Banking: customers perspectives and theoretical frameworks to increase user acceptance of a multiplatform banking business
  19. 19 THE ANALYSIS OF BANK PERFORMANCE INDICATORS
  20. 20 A Study of Changing Key Performance Indicators in Banking Sector [DOI]
  21. 21 Digital payment system: A technology enabled banking self-services in India
  22. 22 Mobile Banking and Technical Efficiency of Commercial Banks in Kenya [DOI]
  23. 23 Adoption of Robots, Artificial Intelligence and Service Automation by Travel, Tourism and Hospitality Companies – A Cost-Benefit Analysis
  24. 24 Journal of Business Economics and Management [DOI]
  25. 25 International Journal of Research in Engineering, Science and Management [DOI]
  26. 26 Is the Internet Delivery Channel Changing Banks' Performance? The Case of Spanish Banks [DOI]
  27. 27 Asian Journal of Economics, Business and Accounting [DOI]
  28. 28 CONSUMER PERCEIVED RISK OF INTERNET BANKING IN KENYA: A SURVEY OF THREE SELECTED BANKS IN NAIROBI COUNTY
  29. 29 The effect of internet banking risk management strategies on financial performance of commercial banks in Kenya

Cited by 2

The Green Banking Operations and Their Role In Achieving Sustainable Banking Performance In Babil Governorate

N. H. Mohammed, Hamid Mohsin Jadah · Ihtifaz: Journal of Islamic Economics, Finance, and Banking · 2026

Mobile banking and the performance of savings and credit cooperative societies in Tanzania

Lucas Kisinga, W. Gomera · International Journal of Research In Business and Social Science · 2024

Related research

Article metrics

Real usage data collected on this platform.

5

Page views

0

PDF downloads

1

Outbound clicks

2

Citations

Views over time

Views by country

Approximate, from request IP at view time — not citizenship or institution. Countries with fewer than 5 views are grouped as "Other".

Traffic sources

Referring site, by host.

Views and downloads exclude known bots/crawlers. Citations combines this platform's own DOI-resolved index with each external source's own reported total — see Cited by above for individually listed citing works. Last refreshed 0 seconds ago.