Influence of digital transformation processes on customer relationship management among commercial banks in Kenya

Abstract

In a world where consumer needs are ever-changing, there is a need to critically examine how modern technologies are affecting the customer relationships within banks. Commercial banks have acknowledged that digital transformation processes are crucial to fostering the performance of commercial banks. However, the benefits of adopting the various systems have not been extensively established. The current study investigated the effect of digital transformation processes on customer relationship management within Kenyan banks. The research specifically investigated the influence of service automation, data analytics, and digital channels on customer relationship management. The study was anchored on the Resource-Based View, and the identity, differentiate, interact, and customize theory. A descriptive research design was adopted and the unit of analysis was the 41 commercial banks in Kenya. The study sampled the chief technology officer, human resource managers, and operation managers from each of the commercial banks. The sample was determined using the Yamane formula. 94 respondents were sampled using questionnaires which were the main data collection tool. A pre-test of the research instrument was carried out on 10% of the respondents to support reliability testing. The study adopted a mix of drop and pick, as well as Google forms to collect data. The collected research data were analyzed quantitatively using both descriptive and inferential statistics with findings being presented using bar graphs, charts, and tables as deemed appropriate. The study achieved a 90% response rate from the sample participants. The study found there is a statistically significant relationship between digital transformation processes and customer relationship management in commercial banks. The study identified that service automation and digital channels have a significant positive influence on customer relationship management. The research found an insignificant effect of data analytics on customer relationship management. The study concludes that improving service automation and utilization of digital channels can result in better customer satisfaction, loyalty, retention, and customer handling experiences. The study recommends that commercial banks should improve their utilization of data analytics and business process engineering to achieve better customer relationship management. The research recommends that banks should foster their reliance on social networking and automation processes to drive customer relationship management. The study was limited only to three digital transformation processes; hence there is a need for a further study taking into consideration more proxies of digital transformation.