Reserch Proposal

European Scientific Journal May 2013 edition vol.9, No.13 ISSN: 1857 - 7881 (Print) e - ISSN 1857- 7431

THE IMPACT OF MOBILE AND INTERNET BANKING ON

PERFORMANCE OF FINANCIAL INSTITUTIONS IN KENYA

Kennedy Okiro

Department of Finance and Accounting, School of Business, University of Nairobi, Kenya

Jacky Ndungu

University of Nairobi

Abstract

Financial institutions have been in the process of significant transformation. The force

behind the transformation of these institutions is innovation in information technology. Information and communication technology is at the Centre of this global change curve of mobile and internet banking in Kenya. Rapid development of information technology has made banking tasks more efficient and cheaper.

This study sought to determine the impact of mobile and internet-banking on performance of financial institutions in Kenya where the survey was conducted on financial institutions in Nairobi. The study also sought to identify the extent of use of mobile and internet banking in financial institutions. The study investigated 30 financial institutions.

The study found that the most prevalent internet banking service is balance inquiry while the least is online bill payment. Cash withdrawal was the most commonly used mobile banking service whereas purchasing commodities was the least commonly used.

Keywords: Mobile Banking, Internet Banking, Financial Institutions, Firm Performance

Introduction

Background of the study

Mobile banking is an innovation that has progressively rendered itself in pervasive

ways cutting across several financial institutions and other sectors of the economy. During

the 21st century mobile banking advanced from providing mere text messaging services to

that of pseudo internet banking where customers could not only view their balances and set

up multiple types of alerts but also transact activities such as fund transfers, redeem loyalty

coupons, deposit cheques via the mobile...