Effect of Internet Banking on Profitability of Commercial Banks in Kenya: A Case of Kenya Commercial Bank

Abstract

Internet banking is a set of financial services delivered through digital pathways. This study sought to determine the effect of internet banking on profitability of the Kenya Commercial Bank. Guided by the theory of financial innovations. This study applied descriptive research design and purposive sampling to select Kenya Commercial Bank from the list of all licensed commercial banks in Kenya as at December 31st 2020 because it is the largest bank in terms of technology. Secondary data was extracted from the financial statements which were analyzed using simple linear regression. The study established that internet banking was an important factor in enhancing profitability of the Kenya Commercial Bank (β=0.087, p< 0.05). It was concluded that profitability of the Kenya Commercial Bank was influenced by internet banking. The findings of the study will be important in informing policy makers and bank managers on mechanisms of enhancing their profitability. The study therefore recommended that commercial banks that seek to enhance their profitability should embrace internet banking.