ANALYZING DIGITAL PRESENCE AND ITS IMPACT ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA USING THE WEBIX MODEL AND MULTIPLE REGRESSION ANALYSIS
Abstract
Recently, the Kenyan financial sector has witnessed digital evolution. Kenyan commercial banks have been forced to adjust rapidly to this digital evolution to achieve a competitive advantage and improve their financial performance. This study aimed to investigate the relationship between digital presence and the financial performance of commercial banks in Kenya. Data was collected from the websites of all commercial banks in Kenya, while secondary data was collected from audited published financial statements, financial reports of the commercial banks, and the Central Bank of Kenya. Profitability measured financial performance, while the WEBIX model was used to investigate the level of digital presence of commercial banks in Kenya. The study using the WEBIX model, technical and content analysis of the websites of all the commercial banks in Kenya, found that commercial banks in Kenya are gradually moving from Web 1.0 solutions to Web 2.0 solutions by linking their social media accounts to the website. The study also found that commercial banks in Kenya are still in the second (emerging) level of digital maturity. Multiple regression analysis found a statistically significant relationship between the digital presence and the financial performance of commercial banks in Kenya. The study concluded that the policymakers and the management of commercial banks should continually emphasize the importance of investing in digital assets, strategies, and infrastructure to steer the banks through this evolving and dynamic financial landscape. The study also recommends further research using mediating or moderating variables. The researchers believe that the originality of this study will be beneficial to managers of commercial banks.
JEL: G21, G20, L25, O30
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DOI: http://dx.doi.org/10.46827/ejefr.v9i1.1942
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