Determinants of FinTech adoption and the moderating effect of preparedness on the relationship between determinants and FinTech adoption by commercial banks in Kenya

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dc.contributor.authorOmamo, S. O.
dc.date.accessioned2024-10-30T14:12:08Z
dc.date.available2024-10-30T14:12:08Z
dc.date.issued2024
dc.descriptionFull - text thesis
dc.description.abstractFinTech has been described as the future of banking due to its disruptive effect. However, the adoption of FinTech by banks in payment, lending and personal banking is low. The purpose of this research was to examine the determinants of FinTech adoption by commercial banks in Kenya. The specific objectives were to examine the effects of cost-related factors, customer-related factors and technology-related factors on Fintech adoption by Kenyan commercial banks. Additionally, this study sought to examine the moderating effect of banks’ preparedness on the relationship between the aforementioned factors and FinTech adoption. The theories that anchored this research were the diffusion of innovation theory and the technology acceptance model. Positivism philosophy guided the methodology for this study. The cross-sectional descriptive research design was adopted – this study was observational and collected data from participants at a single point in time. Respondents in this study were recruited using judgmental sampling. The sample needed for this research was respondents from the 34 commercial banks in Kenya. Data was gathered using structured questionnaires, which was distributed to multiple respondents from each bank including marketing, operations, information technology, human resources and finance managers working for banks based in Nairobi County using a drop and pick method. Validity of the study was improved using a pilot study to assess the understandability of the questionnaire and an expert review. Data analysis was performed using the Statistical Package for Social Science (SPSS) version 26. A multiple linear regression was used to determine if cost-related, customer-related, and technology-related factors predicted FinTech adoption by banks. For the first objective, the results also showed a significant negative effect of cost-related factors on the adoption of FinTech by commercial banks in Kenya. Regarding the second objective, the result from this study showed insignificant positive effect of customer-related factors on the adoption of FinTech by commercial banks in Kenya. For the third objective, the results showed a significant positive effect of technology-related factors on the adoption of Fintech by commercial banks in Kenya. Regarding the fourth objective, the findings also indicated that preparedness for Fintech does not have a moderating effect on the relationship between determinants of Fintech adoption since no significant interaction effects were observed. Overall, in the final model for predicting FinTech adoption by commercial banks in Kenya, only cost-related factors and technology-related factors were included with negative and positive effects respectively. The implication of these findings is that reducing cost-related factors can improve the adoption of FinTech by commercial banks in Kenya. These results also suggest that improving technology-related factors can improve the adoption of FinTech by commercial banks in Kenya. In this respect, FinTech adoption can be improved by reducing reliance on legacy systems, making FinTech compatible with banking systems and processes, and developing secure FinTech. Additionally, the findings from this study suggest that enhancing preparedness can improve the adoption of FinTech by commercial banks in Kenya. Preparedness can be enhanced by adopting digital innovation strategies, improving technical capabilities and human resource capabilities, being agile and adaptable, and partnering with FinTech companies.
dc.identifier.citationOmamo, S. O. (2024). Determinants of FinTech adoption and the moderating effect of preparedness on the relationship between determinants and FinTech adoption by commercial banks in Kenya [Strathmore University]. http://hdl.handle.net/11071/15622
dc.identifier.urihttp://hdl.handle.net/11071/15622
dc.language.isoen
dc.publisherStrathmore University
dc.titleDeterminants of FinTech adoption and the moderating effect of preparedness on the relationship between determinants and FinTech adoption by commercial banks in Kenya
dc.typeThesis
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