Relationship Between Mobile Phone Banking Technologies and Customer Base of Commercial Banks in Kisumu County, Kenya

Abstract

Mobile phone banking technology is revolutionizing the global banking and payment industry. It offers new opportunities for commercial banks to provide added convenience to their existing customers in both developed and developing countries. However commercial banks are being slow in embracing mobile phone banking technology, only 17 out of 46 commercial banks as at 2013 were facilitating mobile money transfer, consequently risking being left behind in terms of enhanced customer services. The relationship between mobile phone banking technology and customer base of commercial banks in Kisumu County is not known. The main purpose of the study was to determine the relationship between the mobile phone banking technology and customer base of commercial banks in Kisumu County, Kenya. The specific objectives were to determine, examine and ascertain respectively the relationship between Interactive voice response, Standalone mobile application clients, short messaging service technology and customer base of commercial banks in Kisumu County, Kenya. The conceptual framework shows customer base as the dependent variable, perceived adoption of mobile phone banking technologies as the independent variable and the mobile phone bank environment as intervening variables. The study was anchored on the theories of technology adoption model, innovation diffusion theory and contemporary banking theory. The study used both descriptive and correlation research designs on a population of 30 commercial bank branches in Kisumu County, Kenya chosen on the basis of convenience to the researcher. Test re-test confirmed reliability at alpha (a) equal to 0.8. Data was obtained by use of semi structured questionnaires administered to bank managers. Data was analyzed using both descriptive statistics such as mean and standard deviations and correlation analyses. Data was presented using bar graphs and pie charts to present the findings. The findings show that there is a positive correlation between IVR technology r = 0.665, n = 30, P = 0.000, standalone mobile application client technology r = 0.258, n = 30, p= 0.169, SMS technology r = 0.233, n = 30, p = 0.215 and customer base meaning that adoption of mobile phone banking technology increases perceived customer base of commercial banks in Kisumu county Kenya. The study concluded that IVR, standalone mobile application client and SMS technology positively correlates to customer base hence mobile phone banking technologies positively correlates to customer base of commercial banks in Kisumu County Kenya. The study recommended that commercial banks should adopt mobile phone banking technologies. Further studies should be carried out on threat of network providers in providing banking services. The study is immensely significant in diverse ways to all stakeholders since the findings increase general knowledge on the subject of mobile phone banking technology.