Influence of business environmental factors on the rate of cloud computing adoption by commercial banks in Kenya
Date
2024
Authors
Kemigisha, A. I.
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Cloud computing as a technology has received considerable attention in research and is making a significant impact on organizations globally. This is all attributed to the agility it provides in the provisioning of technology services for business operations and adapting to industry changes thus offering avenues for boosting profitability. However, in spite the benefits, the rate of adoption of the technology varies across regions and industries, with some such as the financial services sector though an early adopter has been reported to have low adoption rates, for example, approximately 20 - 40 percent in Kenya. The financial services sector which includes the banking sub-sector, significantly contributes to the global and local economy (approximately 5.5% of the nominal Gross Domestic Product in Kenya in 2022), and views cloud computing as a technology that can unlock capabilities that lead to business transformation thus essential to adaptability. Therefore, this study aimed at assessing how the business environmental factors influence the rate of cloud computing adoption by commercial banks in Kenya. It specifically examined how vendor support, competitive and trading partners’ pressure influence adoption rates. The study was based on a descriptive design anchored on two theories, that is, Diffusion of Innovations and the Technology, Organizational and Environmental framework. Structured questionnaires were distributed to respondents with different roles in all 39 licensed commercial banks to collect the primary data while secondary data was collected from reports of previously concluded studies from the Central Bank of Kenya. Quantitative methods of data analysis, that is, both descriptive and inferential statistics were utilized. The response rate obtained was 62%. Factor analysis and subsequently, ordinal logistic regression found that competitive and trading partners’ pressure negatively influence the rate of cloud computing adoption. More specifically, price competition in the industry and competitive products offered by trading partners only on cloud platforms respectively were the factors that had a significant influence. While two factors associated with vendor support were found to positively influence the adoption rate, that is, the provision for architectural support and the requirement for cloud vendors to provide access to 24/7 cloud support irrespective of severity of the cases. In the last period of one year, the adoption rate was reported as 33% and 40% for general use cloud computing services and business-critical services respectively by the commercial banks in Kenya. There were limitations in the study related to the unavailability of the respondents and the political unrest experienced during the period of data collection, however mitigations such as electronic data collection were implemented. The study recommended that cloud vendors should consider building awareness about their support offerings and tailoring solutions for the banks. Trading partners should consider other incentives or approaches, for example, where there is mutual benefit to be realized, for purposes of adoption of the technology. The findings from this study provide additional insight into what specific aspects of vendor support, competitive and trading partners’ pressure influence the rate of cloud computing adoption, for example, competition on price was found to have a significant negative influence on the adoption rate. It also could provide insights to assist the banks to improve their agility in industrial and customer changes and become more operationally efficient.
Keywords: cloud computing, rate of technology adoption, cloud in commercial banks, cloud in Kenya, business environment, DOI, TOE
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Full - text thesis
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Citation
Kemigisha, A. I. (2024). Influence of business environmental factors on the rate of cloud computing adoption by commercial banks in Kenya [Strathmore University]. http://hdl.handle.net/11071/15594