Banking Systems Adoption and Financial Self Sufficiency; A Case for Commercial Banks in Kenya

Stephen Githaiga Ngware^1,

¹Jomo Kenyatta university of Agriculture and Technology, School of Business, Department of Accounting, Finance, and Economics, P. O. Box 62000 – 00200, Nairobi, Kenya

Cite this paper:
Stephen Githaiga Ngware. Banking Systems Adoption and Financial Self Sufficiency; A Case for Commercial Banks in Kenya. Journal of Finance and Accounting. 2025; 13(2):42-56. doi: 10.12691/jfa-13-2-2

Abstract

The financial sector has witnessed remarkable growth in the adoption of advanced technologies, decisively shifting from outdated models to more digital and customer-centric approaches. This evolution is a direct response to the inherent limitations of physical bank locations and antiquated systems that no longer satisfy consumer demands. Many tier II and tier III commercial banks are grappling with financial difficulties due to the rising incidence of non-performing loans and an overreliance on foreign debt, clearly exposing their lack of self-sufficiency. The integration of innovative banking technologies is not just beneficial; it is essential for driving development and enhancing competitiveness. This study unequivocally demonstrates how the adoption of these banking systems significantly impacts the financial independence of Kenyan commercial banks, focusing on integrated financial systems, cloud computing, blockchain technology, and generative artificial intelligence. Anchored in financial intermediation theory, the technology acceptance model, and Schumpeter’s innovation theory, the research engaged 205 participants from 41 commercial banks. Utilizing a descriptive correlational design, the author gathered data through structured questionnaires, which were subsequently analyzed using SPSS. The findings indicate that the technologies in question, along with specific macroeconomic indicators, have a significant and positive impact on financial self-sufficiency. It is imperative for banking institutions to embrace banking innovations to ensure their success. The study strongly recommends banking system integration as a vital strategy to overcome traditional limitations.

Keywords:
Financial Self-Sufficiency Blockchain technology Integrated financial systems Generative Artificial intelligence Cloud Technology macroeconomic variables

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