DETERMINANTS OF THE ADOPTION OF ONLINE BANKING IN COMMERCIAL BANKS IN KENYA

Abstract

The general objective of this study was to establish the factors that contribute to the adoption of online banking in Commercial Banks of Kenya. This study employed descriptive design and the target population comprised of 42 commercial banks in Kenya focusing on bank officials and bank customers. It employed purposive sampling to select 42 bank officials and simple random sampling to select 150 bank customers. The study relied on primary data specifically a questionnaire that comprised of open and closed ended questions. SPSS was used to generate frequencies, descriptive and inferential statistics were used to derive conclusions and generalizations regarding the population. Descriptive statistics included use of percentages, mean,frequency distribution and standard deviation while inferential statistics used included correlation and multiple regression analysis . The study findings indicated that most of the respondents were using online banking since it reduced the amount of time used to access banking services. It was also a convenient way of providing customer service and online banking saved customer time since they no longer needed to physically visit the banking hall. However the younger respondents adopted online banking compared to elderly customers which could be associated with the factors. In addition, results revealed that customer attitude, customer awareness (internet knowledge), consumer trust and perceived risk were statistically significant in explaining adoption of electronic banking by customers. The study concluded that online banking adoption and usage in Kenya was very low despite the high levels of internet access. Moreover, the results showed that the younger population were adopting and using internet banking more than the older generation. In addition, the younger generation had a higher exposure to internet use. The study recommended that b anking institutions must identify and manage the factors affecting the consumer’s intention to adopt and continue usage, to increase the adoption rate of internet banking. Key Words: Consumer’s Attitude, Perceived Risk, Internet Knowledge, Perceived Ease, Online Banking