ASSESSING SUSTAINABLE COMPETITIVE ADVANTAGE OF COMMERCIAL BANKS IN KENYA: AN APPRAISAL OF THE MOBILE BANKING INNOVATION
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Abstract
Banking Institutions can achieve sustainable competitive advantage through adoption of innovative practices in its broadest sense by use of both new technologies and new ways of doing things. A firm's efforts in establishing and maintaining such advantages for a long-term period are based on the managers’ ability to adopt strategic innovation practices with inimitable characteristics. While research has evidently shown that adoption of innovation practices has a share in its profitability and market share growth, it is not clear on the extent to which adoption of mobile banking has played a role in retaining a sustainable competitive advantage for commercial banks. This paper was therefore an appraisal of the mobile banking system to establish whether there exists a relationship with sustainable competitive advantage. Guided by the innovation of diffusion theory the paper focused on mobile banking as one of the major innovations that has recently shaped the banking industry. The study employed descriptive and explanatory research designs on a census sample of head of departments and branch managers drawn from commercial banks within Nairobi County. Questionnaire was the main tool of collecting data that saw analysis completed through descriptive and inferential statistics. Pearson product moment correlation analysis and linear regression analysis were employed to test the relationship between the mobile banking and sustainable competitive advantage. Correlation matrix indicated that mobile banking (r=.445, p=0.000) had linear relationship with sustainable competitive advantage. The linear regression results indicated a coefficient of 0.068 on mobile banking practices with corresponding p=0.042<0.05 depicting a positive and significant influence at 5% level. Coefficient of bank regulation, 0.205, as a intervening variable was significant,, in predicting the dependent variable. The findings of the study indicated that bank regulation was an intervening factor in the relationship between mobile banking and sustainable competitive advantage of Tier 1 commercial banks in Kenya. This paper contributes to theory, policy and practice by seeking to engage policy makers in the banking industry on the importance of embracing mobile banking as a tool to enhance competitive advantage in banks. To theory, this paper adds to the existing knowledge to inform future researchers on its practicability.
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