Abstract:
Globalization brings about interconnection in the financial world, where organizations are using
procedures with innovative financial products and services. Transactions such as,deposits,
withdrawal of money, saving, are now being performed via mobile phones. This has enhanced
efficiency and convenience in the financial sector compared to when people used to travel long
distances to make queues in the banking premises to get these financial services. The financial
service has enhanced cost-effectiveness through the ways of accessing bank accounts hence
profitability. The general objective of my study was to investigate the effect of mobile banking on
the financial performance of commercial banks in Kenya. The theories discussed for this study are
the Financial Intermediation Theory and the Innovation Diffusion Theory. The methodology used
was the use of Descriptive research design. The target population of the study focused on the 43
commercial banks in Kenya as of 31
December 2014, CBK. Secondary data was also sourced
from CBK annual supervision reports. Descriptive statistics was used. Inferential statistics was
also used for regression analysis. Data analysis was conducted using Eviews 9 Software and the
collected data was presented in the form of graphs. The study findings indicated that number of
mpesa users for cash storage and the number of mobile money transactions has a positive
relationship with financial performance of commercial Banks while number of deposit account
holders has a negative relationship with financial performance of commercial banks. This however
concluded that there exists a weak positive relationship between mobile banking and financial
performance of commercial banks in Kenya.
