Strategic Information Systems And Performance Of Commercial Banks In Nyeri County, Kenya

ABSTRACT

With increased competition, changing consumer needs, influence of globalization and employees’ diversity, commercial banks are driven to adopt strategic information systems to enhance their competitiveness in the changing business environment. The purpose of this study was to establish the influence of Strategic Information System and performance of Commercial Banks in Nyeri County, Kenya. The objectives of the study were to; determine the influence of internet banking, mobile banking and automated teller machines on performance of Commercial Banks in Nyeri County. This study adopted descriptive research design to establish strategic information systems and the performance of Commercial Banks in Nyeri County, Kenya. Descriptive research was appropriate because it explores and describes the relationship between variables in their natural settings without manipulating them. The study adopted a census approach where information from every member of the population was sought to establish the problem under investigation. A census was preferred because ten Commercial Banks operating in Nyeri had limited number of respondents. The respondents of the study were employees of Commercial Banks operating in Nyeri County. The study used both primary and secondary sources of data. Out of the ten Commercial Banks selected, a total of 185 from 10 commercial banks in Nyeri County were used as respondents of this study. Primary data was collected through structured questionnaires with both open-ended and close-ended questions. Secondary data was obtained from published research papers, textbooks and Journals. Questionnaires were the preferred instrument of data collection because the respondents completed the required information at their own time and the collected data was easily quantified. Reliability of the research instrument was enhanced through a pilot study that was done on two Commercial Banks operating in Nyeri County (Kenya Commercial Bank and Equity Bank) to test the validity and reliability of the research instrument. Seeking opinions of industry experts in the field of study and the researcher’s supervisor also enhanced the quality of research questions. The Statistical Package of Social Sciences (Version 21) was used to process and analyze the data collected. Data was analyzed using multiple regression method to test statistical relationship between variables of the study. The analysed data was presented descriptively using tables. It was established that Commercial Banks adopted internet banking, mobile banking to improve their performance in terms of profits, customer satisfaction, minimize costs of production and compensate on return on investments. The study revealed that mobile banking services were still adopted by consumers on a larger extent due to convenience of accessing financial information ranging from electronic financial statement and accessibility of banking services. The study concluded that there was a positive relationship statistical relationship between independent variables and dependent variables of the study. Therefore, this study recommends that Commercial Banks should allocate adequate financial resources to create maximum awareness of their e-banking services and train their staff to enhance their performance in the changing business environment.