Effects of M-Banking Services on Financial Performance and Market Share of Commercial Banks Listed at the Nairobi Securities Exchange, Kenya

Abstract

M-Banking is changing how customers access and use banking services. Banks have adopted MBanking as one of their service delivery platforms, and innovation is ongoing to find more ways of enhancing these services. This research examined whether the nature of M-Banking services offered by listed banks is correlated to their market share and financial performance. The general objective of the project was to analyze the impact of M-Banking on the performance of listed banks in Kenya. Consequently, the specific objective of this study involved determining the effect of mobile top up, fund transfers, bill payment and balance enquiry on financial performance and market share of listed banks in Kenya. The study was informed by two theories namely Theory of Planned Behavior, Technology Acceptance Model, Social Construction of Technology Theory and the KANO Model. The study considered the product features of M-Banking services, analyzed their impact on market share, and determine their effects on the financial performance of listed banks. The study adopted an exploratory research design. The main respondents in this study were the functional heads of M-Banking in listed banks. The two main sources of data were publicly available financial data from listed banks, and data from respondents gathered using a questionnaire. The study had both qualitative and quantitative results which both were fundamental to the achievement of the stated objectives when using exploratory design methodology. Data analysis employed the Statistical Package for Social Sciences (SPSS) to explore significant relations among the research variables, using descriptive and inferential statistical techniques. Linear regression techniques were used to establish the strength of the independent and the dependent variable. The multiple linear regression is significant (R2=.599, F (8, 95) =21.556, p<0.05). The findings further suggested there were significant relationships between mobile top up, fund transfers, bill payment and balance enquiry on financial performance and market share of listed banks in Kenya. The significance of this study is that it will reveal the impacts of M-Banking services on market share and the financial performance of listed banks.The study recommends that commercial Bank should come up with flawless and reasonable M-banking rates which create a common platform for all banking institutions since this will enhance fair market completion and thus barring financial institutions from customer exploitation.