INFLUENCE OF ALTERNATIVE BANKING CHANNELS ON FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA

The objective of this study was to assess the influence of alternative banking channels on the performance of commercial banks in Kenya. The research was guided by the following specific objectives: to assess the effect of agency banking on the performance of commercial banks in Kenya, to establish the influence of mobile banking on the performance of commercial banks in Kenya, to determine the effect of electronic banking on the performance of commercial banks in Kenya, to establish the relationship between internet banking and the overall performance of commercial banks in Kenya. This study employed descriptive survey research design. The target population of this study was commercial banks operating in Kenya. The study utilized annual financial reports to collect and analyze data. Data collected in this study was analyzed through quantitative methods and assembled to form the final findings and interpretations. The SPSS program Version. 25.0 was used as the main statistical tool of calculating the expected parameters. Inferential statistics like regression analysis, other forms of analysis such as ANOVA and correlation were applied to establish the association between the dependent and the independent variables. Data was presented using charts, graphs as well as the frequency percentages. The study concluded that agency banking influences performance of Commercial banks. Mobile banking has benefitted commercial banks from the decreased cost of delivery of services to their clients. The use of electronic banking by customers replaced labour intensive and paper-based banking methods leading to quicker access to services. The study recommends that Central Bank and the Kenyan government needs accelerated interoperability of the alternative banking channels among commercial banks in Kenya. This in the long run will help banks reduce cost of investing in technology individually by jointly developing and sharing the available technological platforms and resources to offer products and services to their clients seamlessly. Keywords: Agency Banking, Mobile/Phone Banking, Internet Banking, Electronic Banking, Financial Performance