Thesis:

Influence Of Digital Transformation Strategy On Enhancing Competitive Advantage In Commercial Banks In Kenya

The banking sector in Kenya continues to face increased dynamisms most of which have affected most of the banks’ competitiveness. With thirty-nine banks licensed to operate in the country, only three banks control more than 70% of the market. This shows a low competitive strength of the majority of the banks, a matter that has threatened their continued operation. On the other hand, digital transformation has been known to play an instrumental role in determining the performance and success of modern organizations. However, this has not been adequately explored in the context of commercial banks in Kenya. It is on this merit that the study sought to examine the influence of digital transformation strategy on competitive advantage of commercial banks in Kenya. Specifically, the study sought to examine the influence of digital channels on competitive advantage, to assess the influence of digital infrastructure on competitive advantage, to examine the influence of digital proficiency on competitive advantage, and to evaluate the influence of data management on competitive advantage of commercial banks in Kenya. The study was anchored on the assimilation theory, the theory of diffusion innovation, technology acceptance model, and the unified theory of technology acceptance. The study employed a descriptive research design where the target population was 2,664 staff who are in the top management cadre of the commercial banks in Kenya. The study focused on headquarters of these banks which are based in Nairobi County. Stratified random sampling technique was adopted for this study. Yamane’s (1967) formula was used to establish a sample size of 347 for the study. The study utilized a questionnaire to collect primary data, which was analyzed using SPSS. Both descriptive and inferential statistics were used for the analysis. The findings were presented using frequency tables and charts. The findings of the study revealed that digital channels significantly influenced competitive advantage of commercial banks in Kenya (P= 0.000<0.05). The study further revealed that digital infrastructure significantly influenced competitive advantage of commercial banks in Kenya (P= 0.007<0.05). It was also established that digital proficiency had a significant role to played in enhancing competitive advantage of commercial banks in Kenya (P= 0.006<0.05). Data management was found to significantly influence competitive advantage of commercial banks in Kenya (βP= 0.001<0.05). The study concluded that digital transformation strategy had not been effectively integrated in most of the commercial banks, and this limited their competitive advantage. The study recommends that the management of commercial banks should integrate digital transformation strategy through investment in digital channels, digital infrastructure, digital proficiency and data management to steer their continued competitive advantage. The study’s findings are expected to be valuable to commercial banks’ managers who will gain understanding on the essence of digital transformation strategies on steering the banks’ competitive advantage. The study findings may also be significant to strategic management practitioners and the government for policy making.