Effects of Banking Innovation on the Financial Performance of Commercial Banks in Somalia (original) (raw)
Related papers
THE IMPACT OF FINANCIAL INNOVATION ON OPERATIONAL PERFORMANCE OF COMMERCIAL BANKS IN ETHIOPIA
2020
The purpose of this study was to examine the impact of financial innovation on operational performance of commercial banks in Ethiopia. This research studied innovations in the area of mobile banking, internet banking and automated teller machines. These innovations were studied in relation to their effect on commercial banks' operational performance. Explanatory survey design was used while a questionnaire was used to gather primary data. The study sample include 220 purposively selected senior managers in head office of 17 Commercial Banks in Ethiopia. The data collected was analyzed using Statistical Package of Social Sciences Version 22. Key findings from the study confirmed that bank innovations significantly and positively influence operational performance of commercial banks in Ethiopia. Each type of bank innovation (mobile, internet and ATM banking) significantly and positively influenced bank operational performance. Thus, the study recommend commercial banks in Ethiopia should invest and engage in financial innovation and exert more on awareness creation about financial innovation in order to boost their performance and compete in ever-changing financial system.
Influence of Innovation on The Performance of Commercial Banks in Nakuru Central Business District
IOSR Journal of Business and Management, 2016
Kenyan commercial banks have continued to use huge investments in innovations and Training of manpower to handle new technologies. The fast-changing competitive environment, globalization, economic changes, regulation, privatization and the like demands that commercial banks are run efficiently and effectively by continuously engaging in innovations. The relationship between the growing investment in bank innovations and bank financial performance in Kenya needs to be studied. If an organization is not capable of introducing innovations on an ongoing basis, it risks that it will lag behind and the initiative will be taken over by other entities. The main objective of the study was to establish the effect of financial innovations on financial performance of commercial banks in Kenya. The specific objectives of the study were to; find out the impact of mobile technology on financial performance of commercial banks, to examine the effect of agent banking on financial performance of commercial banks, to find out the effect of internet banking on financial performance of commercial banks and to investigate the effects of banc assurance on financial performance of commercial banks in Kenya. Population of study comprised of 45 commercial banks employees from 9 banks that use mobile banking, agent banking, internet banking and banc assurance in Nakuru. These banks are Cooperative bank, Kenya Commercial bank, Equity bank, Family bank, Chase bank, National Bank of Kenya, NIC bank, consolidated bank and DTB. Primary data was obtained through questionnaires which was carried out in commercial banks in Nakuru town and was evaluated using explanatory research design while a questionnaire was used to gather primary data. Secondary data was obtained from Central Bank of Kenya and banking survey manuals. The research adopted census technique where every element in the population was included; hence the population was 45. The analysis of the quantitative data was done using statistical package of social science (SPSS) software version 21. Multiple regression analysis was used to test the relationship between bank innovations and financial performance among commercial banks in Kenya. In addition, the Pearson Product Moment Correlation Coefficient was used to test the direction and magnitude of the relationship between the dependent and independent variables.
Financial Innovation and the Performance of Commercial Banks in Kenya
There has been slow growth in the profitability of commercial banks as a result of increased operating expenses as these banks transition to more innovative products. Local banks have been experiencing great losses and have not been able to realize more earnings as a result of competition from local mobile service transfer services like Mpesa and Airtel Money hence lowering their performance through low returns to investments action errors have reduced banks' credibility hence profitability. This study therefore sought to investigate the effect of financial innovation on the performance of commercial banks in Kenya. The study was founded on the resource based theory, the transaction cost innovation theory and the constraint-induced financial innovation theory. The study adopted a descriptive research design. The study targeted all the 16 commercial banks which have embraced all the financial innovations under the study in Kenya. The study used primary data collected using structured questionnaires which were administered to the senior management employees and secondary data obtained from the Central Bank of Kenya Bank Supervision reports. Descriptive statistics were used to describe the quantitative data. Pearson's correlation, analysis of variance and multiple regression analysis were used to establish the relationships among the study variables. The study found that agency banking, mobile banking, internet banking as well as ATM banking had a positive and statistically significant effect on the performance of commercial banks in Kenya. Based on the study findings, the study concluded that financial innovations namely agency banking, mobile banking, internet banking as well as ATM banking affected the performance of commercial banks positively and significantly through various channels such as increased profitability, reduced costs of banking and other infrastructural costs, increased productivity and efficiency, increased customer outreach and customer relationship management, increased accessibility to services as well as quality of services. The study recommends that commercial banks should expand the number of ATM outlets even as they expanded their bank branches; they should increase customer sensitization on the use of internet banking through making the aware of the benefits and how they can use them in making their banking transactions safely; they should increase the number of bank services and products provided by agency outlets since the number of customers using these outlets had continued to increase significantly over the years and that banks should invest adequate capital and knowledge resources towards improving existing financial innovations.
Effects of technology based innovation on listed commercial banks financial performance in Ethiopia: The case of Electronic Banking Services, 2021
This study empirically examines the effect of electronic banking services on the financial performance of listed commercial banks in Ethiopia. The study employed quantitative research approach using strongly balanced panel data on nine listed commercial banks covering 2011-2019. Target population of the study were all listed commercial banks in Ethiopia and all the available data were obtained from national bank of Ethiopia and from their audited annual reports. The fixed effect model regression results revealedthat automated teller machine and mobile banking services have positive and statistically significant effects on the financial performance of commercial banks. However, the
EFFECTS OF TECHNOLOGY INNOVATION ON FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN NIGERIA
Sub-Sahara African Journal of Management Science & Entrepreneurship, 2020
This study examines the effect of banking innovations on financial performance of listed commercial banks in Nigeria. This study adopted correlational research design, Secondary data was collected from all listed Commercial Banks in Nigeria between the period 2008 to 2019. The data was extracted from the annual reports of the listed Commercial Banks in Nigeria. Correlation analysis used to measure the relationship between variable. Specifically, the researcher used multiple regression analysis to establish if the relationship between the independent variable and the dependent variables. The study found that ATM has a significant impact on the FP, IB has a significant impact on the FP and MB has a strong significant impact on the FP. Based on the findings the study concludes that technology innovation has a positive impact on the financial performance of listed Commercial Banks in Nigeria. Based on the foregoing findings and conclusions, the research recommends that Commercial Banks managers and government should properly adopt strategy that will encourage businessmen and general public in using automated teller machine which will improve effectiveness and efficiency of the banking sector and therefore financial deepening and Internet banking should easily accessible by customers, so that quick service and convenience is maintained hence improving financial deepening. At the same time constantly serviced in order to provide reliability of the services. Keywords: Financial Performance; Technology innovation; Internet Banking; Mobile Banking; ATMs.
Effect of Financial Innovation on the Growth of Commercial Banks in Eldoret Town, Uasin Ishu County
IOSR Journal of Business and Management, 2016
The study sought to assess the effect of financial innovation on the growth of financial institution in commercial banks in Eldoret town. The objective of the study was; to determine the effect of internet banking on growth of commercial banks, to determine the effect of M-banking innovation on growth of commercial banks, to examine the role Agency banking on growth of commercial banks and to determine the effect of Insurance on growth of commercial banks in Eldoret Town. The study was guided by the Silber's constraint theory of innovation, Kane's theory and Merton's market efficiency theory of innovation. The research adopted a descriptive research design. The target population consisted of 27 commercial banks in Eldoret town that are registered with Central Bank of Kenya. The target population was 648 respondents and 213 respondents were used as the sample size. The study used 5-point likert questionnaires as the method data collection instruments. Cronbach alpha was used to test reliability of the research instrument. The findings of the study indicated that all the predictor showed that there was statistical significant effect on the dependent variable growth of commercial bank. The study recommends that the management of commercial banks should ensure that they fully support internet banking policies by allocating enough resources to them in order to gain a competitive edge. It is further, recommended that the management at the banks should be dedicated to encourage customer training on the use of internet banking to enhance their capabilities. The banks should also recruit knowledgeable programmers to ensure efficiency in the internet banking services. The empirical study has indicated a number of relevant issues that the research project did not investigate, but which might be important for further research on financial innovations application to create a sustainable competitive advantage. This study was conducted in commercial banks in; other studies should involve other financial institutions in Kenya and explore the financial innovation strategies in order to obtain more holistic information.
The Effect of Technological Innovation on the Financial Performance of Commercial Banks in Kenya
International Journal of Finance and Accounting
Purpose: The present study endeavored to determine the effects of technological innovation on the performance of commercial banks in Kenya.Methodology: The study, which was a census, employed a descriptive cross sectional design and targeted all the commercial banks in Kenya. Secondary data in form of annual financial reports was obtained from Central Bank of Kenya. In addition, primary data was gathered from personnel from the customer care departments using a structured questionnaire. Data were analyzed using IBM SPSS Statistics 21.0 and involved computation of frequencies, descriptive statistics and multiple regression analysis.Results: Most of the respondents affirmed the positive impacts of technological innovations including ease of access, convenience, user friendliness among others. The study showed that customer care employees at the banks valued technological innovations. Moreover, the results revealed a positive and significant relationship between banks’ performance in ...
The Effect of Financial Innovations on the Financial Performance of Commercial Banks in Kenya
International Journal of Finance and Accounting, 2016
Purpose: The study sought to investigate the effect of financial innovations on financial performance of commercial banks in Kenya. The main problem was that there is an increase in the number of financial innovations, but whether the innovations in banking industry are the main determinants of financial performance is a hard to tell. Despite the significance of financial innovation, the effect of innovation on financial performance is still misunderstood. Methodology: The study adopted an explanatory research design. The population of the study was all the 43 commercial banks operating in Kenya in the study period. The study conducted a census on all the 43 commercial banks. The study used primary data. An ordinary linear regression model was used. The regressions were conducted using statistical package for social sciences (SPSS) version 20. Results: The study findings indicated that there is a negative and significant relationship between product innovation and ROA. The relations...
International Journal of Advances in Scientific Research and Engineering (ijasre), 2022
The use of technological breakthroughs has made it possible for organizations to operate more effectively and efficiently. In order to provide banking services to its consumers, Kenya's banking sector has implemented several technological developments. Automated Teller Machines, Agency Banking, Electronic Funds Transfers, Real-Time Gross Settlements, and Mobile Banking are examples of these innovations. The general objective of this study was to establish how technological change affects the performance of commercial banks in Nairobi County in Kenya. A descriptive research design was adopted in this study. All management persons or their equivalents in all branches of commercial banks in Nairobi County were the target respondent. All of the commercial banks have a total of 126 managerial personnel. Closed-ended questions were used to acquire primary data. The study instrument was pre-tested to guarantee its validity and reliability. The data were analyzed using descriptive statistics such as frequencies and percentages. The study discovered that technological changes have an impact on commercial bank performance. The researcher also established that most product changes occur due to technological changes. There is, therefore, a need for technology to ensure the changes is sustained and is not wasted.
Financial Innovations and Financial Performance : Perceptions of Commercial Bank Executives
2019
The emergence of technology in the Ghanaian banking sector has had a huge impact in the development of financial innovative products today. The introduction of these financial innovative products has transformed and continues to revolutionize banking today, and banks in Ghana are no exception to this transformation. This study aims at examining the impact of financial innovations on the financial performance of selected banks in Ghana in terms of their income or revenue generation, efficiency, liquidity, profitability and general patronage of banking services in Ghana. This work is a survey of bank executives from universal banks in Accra and Kumasi. Questionnaires were administered to find out the opinions of bank executives on the impact of financial innovations on financial performance. From the study, it was discovered that financial innovations improve significantly the efficiency, liquidity and profitability of the banks. In addition, its recommended that corporate banks must ...