Abstract: This study sought to determine the influence of alternative banking channels on financial performance of listed tier 1 commercial banks in Kenya. The study adopted a causal research design to test the cause and effect relationship between the variables. The target population for this study was at two levels. The first target population was at institutional level where the study targets 6 listed tier 1 commercial banks in Kenya in operation as at 31 December 2016. Primary data was collected by administering open and close-ended questionnaire to the respondent.The study findings established that there was a weak correlation between agency banking, online banking, mobile banking and automatic teller machines and financial performance of listed tier 1 commercial banks in Kenya. In addition, the study established that agency banking and online banking have a positive and significant relationship with financial performance while mobile banking has a negative but insignificant relationship with financial performance. Additionally, the study findings show that ATMs have a positive and insignificant relationship with financial performance of listed tier 1 commercial banks in Kenya. The study recommends that listed tier 1 commercial banks should continuously invest in alternative channels as it would afford them a better cost control measure compared to traditional investments in brick and mortal of physical branches. This helps to minimize the cost per unit of service and hence improved financial performance for the banks. Listed tier 1 commercial banks should come up with several other ways of utilizing and returns from mobile banking and internet banking.
Keywords: alternative banking channels, ATMs, 1 commercial banks.
Title: Influence of Alternative Banking Channels on Financial Performance of Listed Tier 1 Commercial Banks in Kenya
Author: PETER KIPKIRUI RONO, DANIEL KAMAU, DR KEPHA OMBUI
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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