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The Relationship between Electronic Banking and Financial Performance among Commercial Banks in Kenya

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  • Josiah Aduda
  • Nancy Kingoo

Abstract

Banking industry has been in a process of significant transformation. The force behind this transformation of the banking industry is innovation in information technologies. Information and communication technology is at the centre of this global change curve of electronic banking system in Kenya today. It is against this background, this study investigated the relationship between e-banking and performance of Kenya banking system. Specifically, the study established whether there is relationship between the dependent variable i.e., performance measured by return on assets and the independent variables: investments in e-banking, number of ATMS and number of debits cards issued to customers as proxy for e-banking. The study used secondary data. The data was collected from annual report of target banks and Central Bank of Kenya. The study used both descriptive and inferential statistics in analyzing the data. In general the study revealed that e-banking has strong and significance marginal effects on returns on asset in the Kenyan banking industry. Thus, there exists positive relationship between e-banking and bank performance. In general conclusion the electronic banking has made banking transaction to be easier by bringing services closer to its customers hence improving banking industry performance.

Suggested Citation

  • Josiah Aduda & Nancy Kingoo, 2012. "The Relationship between Electronic Banking and Financial Performance among Commercial Banks in Kenya," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 1(3), pages 1-6.
    • Handle: RePEc:spt:fininv:v:1:y:2012:i:3:f:1_3_6
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    Citations

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    Cited by:

    1. Gift Kimonge Dzombo & James Kilika & James Maingi, 2018. "The Mediating Effect of Financial Inclusion on the Relationship between Branchless Banking Strategy and Performance of Commercial Banks in an Emerging market Context: The Case of Kenya," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(7), pages 161-161, July.
    2. Md. Imran Hossain, 2021. "Effects of E-Banking Adoption on the Financial Performance of State-Owned Commercial Banks in Bangladesh," Information Resources Management Journal (IRMJ), IGI Global, vol. 34(4), pages 1-20, October.
    3. Md. Imran Hossain, 2021. "Effects of E-Banking Adoption on the Financial Performance of State-Owned Commercial Banks in Bangladesh," Information Resources Management Journal (IRMJ), IGI Global, vol. 34(4), pages 93-112, October.
    4. Mogotsinyana MAPHARING & Elang BASUHI, 2017. "Electronic Banking and Bank Performance: Botswana Context," International Journal of Emerging Trends in Social Sciences, Scientific Publishing Institute, vol. 1(1), pages 84-93.
    5. Jonathan O. Oniore & Uju V. Okoli, 2019. "Impact Of Electronic Banking On The Performance Of Money Deposit Banks In Nigeria," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 4(9), pages 83-90, September.
    6. ASSOUMOU MENYE Oscar & Philip SATIA & TAKEUDO DJOFANG Laurette, 2024. "The Influence of Financial Innovations on the Financial Performance of Commercial Banks in Cameroon," International Business Research, Canadian Center of Science and Education, vol. 17(1), pages 1-64, February.
    7. AYODELE, Oluwafemi Godwin & AFOLABI, Taofeek Sola, 2023. "Impact of Financial Innovation on the Competitiveness of Deposit Money Banks in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(10), pages 23-36, October.
    8. Lavinia Mihaela Gutu, 2014. "The impact of Internet technology on the Romanian banks performance," Proceedings of International Academic Conferences 0702397, International Institute of Social and Economic Sciences.
    9. repec:ers:journl:v:volumexxi:y:2018:i:issue4:p:435-458 is not listed on IDEAS
    10. R.M. Mahboub, 2018. "The Impact of Information and Communication Technology Investments on the Performance of Lebanese Banks," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 435-458.
    11. Shamima Islam & Rakibul Islam, 2022. "Measurement of Financial Performance of Rupali Bank Limited," International Journal of Science and Business, IJSAB International, vol. 15(1), pages 45-56.

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