INFLUENCE OF MOBILE PHONE BANKING ON TRADITIONAL BANKING TRANSACTIONS; A CASE OF BANKING INSTITUTIONS IN NAIROBI CENTRAL BUSINESS DISTRICT
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This study was carried out to examine the influence of mobile phone banking technology on
traditional banking transactions with reference to Kenya’s banking institutions. The study was
motivated by an increased revolution in the banking sector with an overall gap remaining in the
addressing the implications of mobile phone banking to traditional banking transactions. The
study is expected to contribute to the existing knowledge on mobile phone banking by addressing
the gaps left in previous research on mobile phone banking in relation to banking transactions,
highlight the trends in adoption of mobile phone banking among banking institutions as well as
customers and thus address the concerns that may be leading to the discrepancy between level of
technology adoption and usage. This may help banking institutions readdress the technology
adoption strategies to be in line with customer taste and preferences. The study recommends
possible policy strategies to be undertaken by the government in order to address the challenges.
A descriptive case design was used in which banking institutions within Nairobi’s Central
Business District were the target population. Data was gathered through semi structured
questionnaires whose reliability and validity was tested. Analysis of data was done through
qualitative and quantitative techniques with help of Statistical Package for Social Sciences. The
study findings indicated that mobile phone banking can be said to have transformed the way
banking activities are undertaken. This has been through introduction of new products and
services that as per these study findings include cash transfers, payment of bills, deposits and
account statement inquiries. Though mobile phone banking is faced with myriad of challenges, it
does not necessarily imply that banks are turning away from its usage to traditional banking
ways. The study recommended that the government should have a clear regulatory framework in
order to improve the level of confidence among banking institutions in the new technology .This
would increase the level of adoption among customers as well as banking institutions. It is also
recommended that banking institutions reconsider investing in risk and compliance functions to
save them on major losses. A further study should be undertaken on the mobile phone banking
challenges and the subsequent effect on the rate of adoption of mobile banking among
customers.