Effect of Technological Infrastructure and Tools on the Financial Performance of Commercial Banks in Kenya

Abstract

The study aimed to examine the relationship between technological infrastructure and tools and the financial performance of commercial banks in Kenya. An explanatory research design was adopted. The target population comprised 234 employees from the head offices of 39 licensed commercial banks in Kenya, and census sampling was used because the population was small and manageable. Primary data were collected using a structured questionnaire based on a five-point Likert scale and analysed using descriptive statistics, Pearson correlation and regression analysis. The findings indicated that respondents agreed that commercial banks regularly upgraded their information technology systems, used technology to detect cyber incidents in real time, reduced system downtime through technology upgrades, facilitated faster and more secure transactions, and reduced IT operating costs. Pearson correlation analysis established a statistically significant positive relationship between technological infrastructure and tools and financial performance (r = 0.616, p < .001). The findings indicate that technological infrastructure and tools are positively and significantly associated with the financial performance of commercial banks in Kenya. The study concludes that continued investment in technological infrastructure and tools is associated with improved financial performance and recommends that commercial banks strengthen the upgrading, maintenance and evaluation of their technological systems in line with their operational and financial performance objectives