determinants of electronic banking adoption by customers in selected kenya commercial bank branches in north rift region, kenya

Abstract

The adoption of electronic banking as a platform for carrying out banking services has continued to rise globally. While it has been adopted in most developed countries, little research has been undertaken in Kenya on determinants of electronic banking in Kenya. The current study therefore sought to bridge this knowledge gap. The study aimed at establishing the determinants of electronic banking adoption by customers. The study was guided by the following specific objectives; to determine the effect of perceived usefulness on adoption of electronic banking, to establish effect of perceived ease of use on adoption of electronic banking, to assess the effect of perceived compatibility on adoption of electronic banking, to determine the effect of perceived reliability on adoption of electronic banking, and to establish the effects of perceived self efficacy on adoption of electronic banking. The researcher adopted Technology Acceptance Model. The model is used to predict adoption of technological innovations. The study was explanatory research design. The study was conducted in Kenya Commercial Bank (KCB) branches in Eldoret town, Iten and Kabarnet town. The target population was 34010 customers from the selected Kenya Commercial Bank branches. The KCB branches are in Eldoret town, Iten and Kabarnet town. The sample size was 380 customers that were established using the Krejcie and Morgan (1970) table for determining sample size from a given population (Appendix IV). The number of customers in each branch was distributed proportionately. Systematic sampling was used to select the respondents, where the first respondent was selected randomly and the subsequent selected systematically based on the sample size. Primary data was collected through structured questionnaire. Reliability and validity of the questionnaire was established by conducting a pilot study in Ecobank, Eldoret branch. Cronbach’s reliability coefficient was calculated to establish the reliability of the instrument in which 0.89 was obtained. The data was analyzed using Descriptive Statistics, Correlation and Multiple Regressions. The study established that perceived usefulness (β = 0.236, p = 0.010) significantly affect adoption of electronic banking. Perceived usefulness was second in prediction of adoption electronic banking. Perceived ease of use (β = 0.262, p = 0.003) significantly affects adoption of electronic banking. From the results, perceived ease of use was the major predictor of adoption of electronic banking. The results indicated that compatibility (β = 0.121, p = 0.114) does not significantly affect adoption of electronic banking. The regression results indicated that reliability (β = 0.211, p = 0.011) significantly affects adoption of electronic banking. The study established that self efficacy (β = 0.039, 0.586) does not significantly affect adoption of electronic banking. The researcher recommends that in the design of electronic banking services, perceived usefulness should be emphasized. The banks should adopt the electronic banking services that are easily understandable to the customers. The bank management should ensure that electronic banking services should not inconvenience the customers, since electronic banking is intended to avail 24 hours services. Future studies to consider other variables such as perceived trust and perceived playfulness. Similar studies to be done in different banks to allow for generalization of the findings.