Factors Influencing the Adoption of Electronic Banking in Kenya: A Case of Commercial Banks in Nairobi County

Abstract

The revolution of information technology has transformed the financial services industry. Despite the undeniable importance of financial innovation in improving service delivery, there is inadequate understanding about the drivers of adoption of e-banking systems. The study established the influence of organizational capability, perceived technological risk, perceived usefulness, and perceived ease of use on the adoption of e-banking in Kenya. The study is grounded on the Technology Acceptance Model (TAM) and Technology-Organization-Environment (TOE) framework. The findings show that the presence of electronic systems, databases, and applications; effective management and oversight, and financial capacity are prerequisite to adoption and use of e-banking services. The main risks perceived by respondents were the effect of incorrect entries, time taken to learn how to use the system, and system outages that may affect access to accounts. E-banking was also perceived to be faster, easier, and better than traditional systems, with many users’ comments on perceived ease of use confirming that the graphic user interfaces are clear, easy to use and do not demand much mental effort. Multiple regression coefficients indicated a statistically significant relationship between organizational capability and perceived usefulness and the adoption and use of e-banking services. There was no statistically significant relationship with perceived risk and perceived ease of use.