Effect of Mobile Banking on the Performance of Co-operative Bank of Kenya

Mobile banking is the use of mobile devices to perform financial transactions and access bank services. It was first introduced in Kenya in 1992 and since then there has been a period of rapid expansion and numerous technological innovations making mobile banking among the main technological tools used in the provision of bank services. The study examined the role mobile banking plays towards the performance of Co-operative Bank of Kenya. The study aimed at achieving four main objectives: the effect of mobile banking revenues, mobile lending, customer adoption and operational costs on Co-operative Bank of Kenya performance. A quantitative research design was used and secondary data was extracted from the quarterly electronic Banking reports. A regression model was used to prove a relationship between two variables: performance and mobile banking using profit before tax as a measure of the dependent variable. Several pre-estimation tests were carried out, they included unit root tests co-integration tests, heteroskedasticity tests and multi-collinearity tests. Data was analyzed using XLSTAT and regression analysis showed a positive association between mobile banking revenues, mobile lending and customer adoption. The study concluded that the key drivers of mobile banking was customer adoption and mobile lending. The recommendation of the study was to drive numbers by improving the mobile platform and ensuring that they are customer friendly and easy to access as well as providing affordable loans through Mco-op Cash their primary mobile lending tool as this translates to improved profits for banks.