Abstract:
With the increasing competition, commercial banks are not just expected to offer traditional
products and services such as checking and savings accounts, certificates of deposit and safe
deposit boxes, but to provide services and product that meet customer’s satisfaction and
competition. The overall objective of this study was to determine the effect of technology
adoption as a system lock-in strategy on financial performance of commercial banks operating
in Narok town. The study used a cross-sectional design. The study targeted a population of 10
commercial banks operating in Narok town. The study used census because the population
was not vast. Data was collected using a questionnaire. The questionnaire was tested for
validity and reliability to ensure that it provided the data that was required for the study. The
data was analyzed using descriptive statistics for frequency and percentages, Pearson
correlation analysis and simple linear regression analysis to summarize and classify data, to
establish the relationship between the variables and to determine the strength of association
between the technology adoption and financial performance of commercial banks operating
in Narok town. On the correlation between technology adoption and financial performance
of commercial banks operating in Narok town, it was noted that there was a statistically
significant correlation when tested using Pearson correlation (r = 0.373; p- value = 0.002). On
the magnitude of the effect of technology adoption on financial performance of commercial
banks operating in Narok town it was established that the (R2= 0.139). The hypothesis was
tested using the t-values, where the null hypothesis was rejected based on the t-value (3.896)
which was greater than the critical t- value. The study therefore concluded that commercial
banks that seeks to improve their financial performance should embrace technology as it
improves service delivery.
Keywords: System Lock-in, Technology Adoption, Financial Performance.
