AN EMPIRICAL ASSESSMENT OF ADOPTION AND INNOVATION OF THE PORTABLE BANKING TECHNOLOGY IN KENYA

Eltigani M. A. Ahmed

doi:10.46281/ijfb.v8i1.1351

Eltigani M. A. Ahmed Pan Africa Christian University, Kenya https://orcid.org/0000-0001-6983-1580

DOI: https://doi.org/10.46281/ijfb.v8i1.1351

Keywords: Innovation Adoption, Portable Banking, Technology, Kenya.

Abstract

The study investigated the appropriateness of innovation diffusion in understanding and explaining the adoption rate and acceptability of portable bank technology in Kenya through the assessment of the factors that influence the adoption of portable banking technology. The study employed a sample of 115 portable bank technology adopters based on a purposive sampling technique and tested the five attributes of innovations, namely relative advantage, compatibility, complexity, trialability, and observability. The study found that relative advantage, compatibility, Trialability, and observability positively impact adoption. Trialability and complexity were found to have a lesser significant effect on adoption. Complexity hurts adoption. More specifically, the regression model revealed that compatibility is the most significant determinant of adopting portable bank technology with t=4.21 and p ≤ 0.001. Trialability has a significant positive impact on adoption with t= 4.27 and p ≤ 0.001. Observability has a high explanatory value with t = 4.45 and p ≤ 0.001. Relative advantage has returned a positive explanatory coefficient at t=4.50 and p ≤ 0.001. Finally, Complexity had no significant impact on the adoption of portable banking technology. The study has uncovered useful trends in portable bank technology adoption in Kenya. The study recommended that future research should focus on broader variables and carry out comparative studies on both homogeneous and heterogeneous settings to gauge the net effect of technical attributes on technology adoption.

JEL Classification Codes: D14, G21, G23, O13, O14, Q55.

Author Biography

Eltigani M. A. Ahmed, Pan Africa Christian University, Kenya

PhD Candidate, School of Leadership, Business & Technology, Pan Africa Christian University, Nairobi, Kenya

References

Addai, O., Ameyaw, B., Ashalley, E., & Quaye, I. (2015). Electronic Banking and Customer Satisfaction: Empirical Evidence from Ghana. British Journal of Economics, Management & Trade, 9(3), 1-8.

Barnes, S. J., & Corbitt, B. (2003). Mobile banking: concept and potential. International Journal of Mobile Communications, 1(3), 273-288.

Bernard, H. R. (2017). Research methods in anthropology: Qualitative and quantitative approaches: Rowman & Littlefield.

Bessant, J. R. (2003). High-involvement innovation: Building and sustaining competitive advantage through continuous change. UK: Wiley & Sons.

Black, N., Lockett, A., Ennew, C., Winklhofer, H., & McKechnie, S. (2002). Modelling consumer choice of distribution channels: an illustration from financial services. International Journal of Bank Marketing, 20(4), 161-173.

CBK. (2018). FinAccess Survey. Retrieved from https://www.centralbank.go.ke/national-payments-system/mobile-payments/

Christensen, C. (2013). The innovator's dilemma: when new technologies cause great firms to fail. MA: Harvard Business Review Press.

Creswell, J. W., & Creswell, J. D. (2017). Research design: Qualitative, quantitative, and mixed methods approaches: Sage publications.

Galavan, R., Murray, J., & Markides, C. (2008). Strategy, innovation, and change: Challenges for management: OUP Oxford.

Gikandi, J. W., & Bloor, C. (2010). Adoption and effectiveness of electronic banking in Kenya. Electronic Commerce Research and Applications, 9(4), 277-282.

Hellstrom, J., & Troften, P.-E. (2010). The innovative use of mobile applications in East Africa: Swedish international development cooperation agency (Sida).

Jabri, I. M., & Sohail, M. S. (2012). Mobile banking adoption: Application of diffusion of innovation theory. Journal of Electronic Commerce Research, 13(4), 379.

Jahan, K., & Khan, F. (2018). Assessment of the Factors Influencing Online Banking Customer Satisfaction: A Banking Perspective in Bangladesh. World, 8(1), 142-158.

Jahangir, N., & Begum, N. (2008). The role of perceived usefulness, perceived ease of use, security and privacy, and customer attitude to engender customer adaptation in the context of electronic banking. African journal of business management, 2(2), 032-040.

Koenig-Lewis, N., Palmer, A., & Moll, A. (2010). Predicting young consumers' take up of mobile banking services. International Journal of Bank Marketing, 28(5), 410-432.

Laukkanen, T. (2017). Mobile banking. International Journal of Bank Marketing, 35(7), 1042-1043.

Mbiti, I., & Weil, D. N. (2015). Mobile banking: The impact of M-Pesa in Kenya. In African Successes, Volume III: Modernization and Development (pp. 247-293): University of Chicago Press.

Mutindi, K. M. (2018). Factors influencing the adoption of mobile banking technology by bank customers in Machakos town.

Ngugi, B., Pelowski, M., & Ogembo, J. G. (2010). M‐pesa: A Case Study of the Critical Early Adopters’ Role in the Rapid Adoption of Mobile Money Banking in Kenya. The Electronic Journal of Information Systems in Developing Countries, 43(1), 1-16.

Norman, D. A., & Verganti, R. (2014). Incremental and radical innovation: Design research vs. technology and meaning change. Design issues, 30(1), 78-96.

Odera, E. A. (2013). Mobile Banking Adoption In The Banking Industry In Kenya. (MBA). University of Nairobi, Nairobi.

Ongore, V. O., & Kusa, G. B. (2013). Determinants of financial performance of commercial banks in Kenya. International Journal of Economics and Financial Issues, 3(1), 237-252.

Pousttchi, K., & Schurig, M. (2004). Assessment of today's mobile banking applications from the view of customer requirements. Paper presented at the System Sciences, 2004. Proceedings of the 37th Annual Hawaii International Conference on.

Puschel, J., Mazzon, A., & Hernandez, M. (2010). Mobile banking: proposition of an integrated adoption intention framework. International Journal of Bank Marketing, 28(5), 389-409.

Rogers, E. M. (2003). Diffusion of innovations (5th ed.). NY: Free Press.

Velu, C. (2016). Evolutionary or revolutionary business model innovation through coopetition? The role of dominance in network markets. Industrial Marketing Management, 53, 124-135.

Wamai, J., & Kandiri, J. M. (2015). Determinants of Mobile Banking Adoption by Customers of Microfinance Institutions in Nairobi County in Kenya. International Journal of Science and Research, 2279-2286. doi:10.21275/ART20174832

Wan, W. W., Luk, C.-L., & Chow, C. W. (2005). Customers' adoption of banking channels in Hong Kong. International Journal of Bank Marketing, 23(3), 255-272.

Wang, Y.-S., Wang, Y.-M., Lin, H.-H., & Tang, T.-I. (2003). Determinants of user acceptance of Internet banking: an empirical study. International journal of service industry management, 14(5), 501-519.

Yunus, M. (2014). Diffusion of innovation, consumer attitudes and intentions to use mobile banking. Paper presented at the Information and Knowledge Management.