New Adaptation Linkages: Perception, Preferences and Obstruction to Banking Technology in Kenya

Introduction

Financial service industry as a whole is undergoing a period of unprecedented change (Sivanand & Geeta, 2004).These changes include increased competition among banks and other financial institutes, evolution of customer preferences, and technological advances that create inexpensive electronic distribution delivery channels like Automated Teller Machines (ATM) and Internet Banking (Garau, 2002; Lustsik, 2003; Katuri & Lam, 2003; Boanteng, 2006; Al-Hajri, 2008; Pikkarainen et al., 2006) and others like mobile banking. Mia (2007) asserted that the advent of e-Business accompanied with technological innovations and globalization is constantly propelling the businesses organization to redefine their business horizons in terms of value chain reengineering and restructuring business models. In the essence, the banking sector is now reengineering to adopt the changes and to be in the race of globalization. Many banks have put themselves in the World Wide Web to take advantage of the Internet’s power and reach, to cope with the accelerating pace of change of business environment.

The famous quote by Bill Gates that “banking is vital to a healthy economy, but banks themselves are not” is practically becoming true. Rotchanakitumnuai and Speece (2004) argue that many companies in the financial service sector have been quick to implement Internet capabilities, and electronic service is becoming a viable option for interaction between financial service providers and their customers. Many banks have implemented Internet banking to offer their customers a variety of online services with more convenience for accessing information and making transactions. From the banks’ viewpoint, implementation of technology in banking industry will lead to cost reductions, improve customer service, and create long-term profit. Businesses investment in web technology is driven by expectations that banking technology should provide better opportunities to establish a distinctive strategic position compared to the previous generation of information technology (Evans & Wurster, 1997; Singhal & Padhmanabhan, 2008; Pikkarainan et al., 2006).