An Assessment of Customers’ Adaptability to Technological Innovations in Kenya’s Banking Industry: Effects of Customers Perceptions

Grace Akinyi Musa, Pamela Atieno Moro, Sandra Beldine Otieno


To keep abreast of changes in the global financial environment, Kenya has experienced a weighty transformation in most of its industries, including the banking sector. The major changes witnessed in the sector have been immense advances in financial technological innovations which are as a result of uproars in the global financial environment. With the rapid and extensive increase in technological innovations, new distribution channels in the financial sector are coming up speedily. These include Automated Teller Machines, Mobile Banking and Internet Banking. These have made accessibility of money easy to bank customers since they can get it at their convenience. The evenly spread of Automated Teller Machines in most parts of the country has further made it easier for bank customers to withdraw and deposit money and/ or cheques at their convenience. These facts notwithstanding, it has been observed that most Kenyans bank customers have not fully embraced the technological innovations. This has been largely caused by bank customers’ negative perceptions towards technological innovations. As a result, most bank customers have clung to the old traditions which make them resistant and non-adaptable to technological innovations. These have been witnessed in the behaviors of most bank customers whereby they are still queuing in the banking halls despite the availability of Mobile Banking, Automated Teller Machines, and Internet Banking. The general objective of the study was an assessment of customers’ adaptability to the technological innovations in Kenya’s banking industry with the effects of customers’ perceptions. A specific objective was derived from the main objective. Two questionnaires were designed which were used to collect the views of the respondents. The population of the study comprised of senior managers from ten Commercial banks and bank customers employed in different organizations and those who were self-employed. The banking customers were selected at random. A cross-sectional ex-post facto research design was applied. Findings revealed a significant relationship between technological innovations and customers’ adaptability in Kenya’s banking sector. The significant moderating effect of customers’ perceptions on the relationship between technological innovations and customers’ adaptability in Kenya’s banking sector. The study suggested that bank management should intensify their campaign on awareness stressing the benefits that accrue from the use of financial technological innovations; tighten their securities especially in ATMs and Internet Banking and charge minimum amounts for the services. Prior studies hitherto concentrated on the benefits of technological innovations to the banking sectors and their employees; the extent by which technological innovations improved the financial performance of the banking sector and developed Kenya’s technological industry. The studies greatest contribution to knowledge is that to attain maximum technological innovations, bank customers’ negative perceptions and resistance to change should undergo a complete overhaul.

Keywords: Automated Teller Machines, Internet banking, Mobile Banking, financial Technological Innovations, Banking Sector, Customers Perceptions

DOI: 10.7176/RJFA/11-10-02

Publication date:May 31st 2020

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