Technological Banking Innovations and Financial Inclusion by Commercial Banks in Nairobi County, Kenya

Technological innovations in the aspect of electronic banking (e-banking) have progressively advanced and changed the manner in which banks offer services. The use of varied forms of technological innovations has become a key strategy that influences the competitiveness and performance of commercial banks. Subsequently, banks are investing more in adopting and implementing innovative e-banking strategies. Although numerous studies have inspected the effect of e-banking on banks across the world, the knowledge gap is that few studies have examined the impact of e-banking strategies on commercial banks’ performance in Kenya. The objectives of this study were to predict the impact of agency banking, mobile banking, the use of ATMs, and internet banking on the commercial banks’ financial performance in Kenya. Agency theory, contingency theory, diffusion of innovations theory, and technology acceptance theory formed the theoretical basis of this study. In its research design, the study used the descriptive approach. The target population comprised managers of 40 commercial banks and the study utilized the purposive sampling method to select 100 respondents comprising of 40 senior managers and 60 operations managers. Descriptive statistics, correlation, and regression analysis were used to analyze data. Correlation analysis indicated that mobile banking (r = 806, p = 0.000), agency banking (r = 0.737, p = 0.000), internet banking (r = 0.466, p = 0.000), and ATM banking (r = 0.547, p = 0.000) have statistically significant relationships with the commercial banks’ performance. Findings indicate that e-banking accounts for 71% (R2 = 0.710) of the variation in the commercial banks’ performance. Moreover, the study found out that e-banking strategies of agency banking and mobile banking are statistically significant predictors (p<0.01, while internet banking and ATM banking are statistically insignificant predictors (p>0.01). Based on these findings, the study concludes that rely on e-banking strategies in enhancing their performance, particularly mobile banking and agency banking. Furthermore, the study concludes that ATM banking and internet banking contribute minimally to the commercial banks’ performance in Kenya. Thus, the study recommends banks to optimize mobile banking and agency banking because they are statistically significant predictors while increasing awareness of internet banking and addressing insecurity issues of ATM banking. Thus, further research should consider establishing factors that account for the unexplained variances of 29% in the performance of commercial banks.

Given the importance of financial innovation in describing banking performance, the impact of innovation on performance remains unclear for two reasons: first, there is a lack of understanding of the sources of innovation; and second, the impact of innovation on bank performance has yet to be tested. The researcher aim was to ascertain what exactly affects the financial performance of Kenya Commercial Bank (KCB) in Nairobi County in Kenya. There are numerous elements that affect performance, this study will focus on banking innovations that are thought to drive financial performance. The study was divided into three main common areas that have recently caught the attention of the banking industry namely internet banking agency banking and mobile banking that affect the financial performance of KCB bank Nairobi County. Nairobi County has been chosen since it is the capital City and an epicenter of numerous commercial activities. The study’s specific objectives were to determine the influence of agency banking, mobile banking, Automated Teller Machines and debit and credit cards on financial performance of commercial banks in Kenya. This study was guided by Agency theory and Schumpeter theory of innovation. The study employed a descriptive research design. The study had a target population of 294 respondents. The sample size was 169 staff of KCB bank spread across the branches in Nairobi County. Respondents were selected using purposive random sampling. Structured questionnaires was used to collect primary data from respondents while secondary data was obtained from KCB, Central Bank of Kenya (CBK), Nairobi Stock Exchange (NSE) and annual financial reports from the KCB bank. Measures of central tendencies was used to describe the results and data presented using graphs charts and tables.The effect and influence of in dependent and independent variable was depicted by use of multiple regression. From the findings, agency banking was found to be the most significant factor influencing financial performance with a p-value of 0.00. It can be concluded from the findings that agency banking has a positively relationship with commissions fee based income and positively relates to interest fee based income. Internet banking positively relates to commissions fee based income and positive relate to interest based income. Internet service has contributed to expansion of the income generating potential of commercial banks. Automated Teller Machine (ATM) system compensates for wrongful deductions and the ATM problems are settled to clients’ satisfaction. Debit & credit cards have had a positive effect of increasing commission fee based income and have influenced positively the increase of interest based income. Further study ought to be conducted on effectiveness of banking innovations on financial performance of other commercial banks since this was a case of KCB bank. This may provide more understanding on how the different banking innovations affect financial performance of the banks. The study recommends that agency banking should be enhanced by increasing the number of agency banking points across the country. The management of the bank should also enhance mobile banking by developing customer friendly mobile applications to enhance transactions by the clients. Therefore the bank management should make sure they increase the ATMs and enhance their innovation that touches on transactions through ATMs. The bank should also enhance the debit and credit cards by liasing with the cutomers to get their suggestions on how to improve the debit and credit cards.

The general objective of the study was to determine the effect of FinTech on the operational costs of microfinance institutions in Nairobi County, Kenya. Specific objectives included examining the effect of process innovation, internet banking agency banking, and mobile banking on operation cost of microfinance institutions. The study was anchored on Demand and Supply Theory of Innovation, Theory of Innovation Diffusion, Transaction Cost Innovation Theory, and Technology Acceptance Theory. Correlational research design was used in this study and target population comprised of managers working with 10 MFIs in Nairobi County, Kenya registered with AMF-Kenya. The primary data was collected using questionnaire, while secondary data was obtained from bank supervision report. Data processing and analysis was facilitated by the use of the Statistical Package for Social Sciences. Descriptive statistics was used to calculate frequencies, percentages, and measures of central tendency and dispersion from the collected data. Again, inferential statistics was adopted to establish the kind of relationship that exists between the study variables using the regression analysis model. The findings revealed that process innovation, internet banking, agency banking and mobile banking were satisfactory variables in explaining the operational costs of MFIs in Nairobi County. The study also found that process innovation had a negative and significant influence on operation costs (? =-0.136, p=.007<.05), internet banking had a significant negative influence on operation costs (? =-0.194, p=.000<.05), agency banking and a negative and insignificant influence on operation costs (? =-0.880, p=.312>.05) and finally mobile banking had a significant negative influence on operation costs of the MFIs (? =-0.420, p=.000<.05). The study concluded that the implementation of technologies such as process innovation, internet banking, agency banking and mobile banking have negative effects on the operation costs of MFIs in Nairobi County. The study thus recommended that managements of MFIs in Nairobi County should strive to fully and properly adopt and implement the use of financial technology in their operations and that innovations can be a source of competitive advantage if a firm understands customer needs, competitors’ actions and technological development and act accordingly to stay at par with rivals, therefore such institutions should take the advantage of fully adopting financial technologies in their operations. Keywords: Technology, Operation, Cost, Microfinance, Process, Internet, Banking, Agency, Mobile Innovation.

Performance in the financial markets is an essential component in the study of finance. Over the last decade, Kenya's commercial banks have increased their use of different types of financial technology (2011-2021). Mobile banking, agency banking, internet banking, and automated teller machines are just some of the various forms of financial technology available today. The purpose of this study was to evaluate the impact that financial technology has had, if any, on the overall financial performance of commercial banks in Kenya. The specific goals were to establish the effect of mobile banking on financial performance; to determine the effect of internet banking on financial performance; to determine the effect of agency banking on financial performance; to determine the effect of ATMs on financial performance; and to establish the moderating role of bank size on the relationship between financial technology and the financial performance of commercial banks. The research was predicated on the technological adoption model, the financial intermediation theory, the diffusion of innovation theory, and the profit maximization theory. The positivist research philosophy was used for this study, and a panel longitudinal research methodology was used for the research. The population of the study was the 38 commercial banks that have been in continuous operation throughout the last decade. The study was a census. Secondary information was gathered on an annual basis, and it covered a span of ten years (January 2012 to December 2021). The data was evaluated making use of descriptive statistics as well as inferential statistics entailing correlation and panel multiple linear regression analysis. The current research conclusions revealed that financial technology fairly explains financial performance and the current research discoveries also revealed that the financial technology is sufficient in predicting financial performance. Additional study findings were that mobile banking, internet banking, agency banking, adoption of ATMs, and bank size had positive significant correlations with financial performance. Moreover, findings were that adoption of ATMs had a significant negative link with financial performance. Meanwhile, mobile banking and agency banking had negative insignificant link with financial performance. Finally, both internet banking and bank size had a positive insignificant relationship with financial performance. Policy recommendations to the government officials and policy formulators in the Treasury and the CBK to not mainly advocate for financial technology policy as a means of boosting bank financial performance and it is recommended to the policy makers to utilize other policies when aiming to boost bank financial performance. Recommendations are also generated to the bank management and consultants not to mainly consider financial technology will significantly boost the banks’ financial performance. Keywords: Financial Technology, Financial Performance, ATM, Mobile banking, Internet banking, Agency Banking

Commercial banks in Kenya have embraced alternative banking channels which represent a shift in delivery of banking and financial services since the alternative banking have become synonymous with commercial banks in Kenya. While banks have succeeded in leveraging available technology and provide alternative avenues to customers for banking services, the challenge it faces today is optimizing the usage of these channels so as to improve on their performance. The general objective of this study was to investigate the effects of financial innovations on the performance of commercial banks in Kenya. The specific objectives of the study were to examine the influence of internet banking, mobile banking, agency banking and ATM banking on the performance of commercial banks in Kenya. The study was guided by agency theory, balanced score card and diffusion of innovation theory. This study employed a descriptive research design. The study targeted44 commercial banks in Kenya as at 2017. The 16 banks which embrace all the four financial innovations from 2013 to 2017were selected using purposive sampling method. The sample size was 80 respondents who comprised of 5 senior management employees in each of the selected banks.This study used questionnaire to collect primary data from the respondents. Content analysis technique was used to analyze qualitative data collected from open ended questions in and reported in narrative form. Descriptive statistics such as mean and standard deviation were used to analyse the quantitative data. Multiple regression analysis was used to show the relationship between independent variables against dependent variable. The study revealed that internet banking, mobile banking, agency banking and ATM banking had a positive and significant effect on the performance of commercial banks. Thisstudy concludes that the banking industry has benefited tremendously from the development of the Internet. The Internet fundamentally changed the way in which banking networks are designed to meet the client demands and expectations. Mobile banking provides a good opportunity to commercial banks in Kenya to reach many mobile phone subscribers in Kenya who had remained unbanked and unreached due to limited access to bank branch networks in the country. The access to the large masses through mobile banking of the population gives banks the opportunity to grow by reaching the unbanked population. Agency banking has led to accessibility of financial service to many customer in remote areas and hence an increase in effectiveness and efficiency in service delivery. Customers are satisfied with the automated teller machine services because of ease of use, transaction cost and service security but not satisfy with automated teller machine dispense of cash. The study recommends that the public and businesses must be encouraged to use Internet banking in their daily activities, including deposits, payments and money transfers. Commercial banks in Kenya should ensure convenience and security of mobile banking through written guidelines on convenience and security of mobile banking. Commercial banks in Kenya should increase the number of agents in estates and in the rural areas. This can be done by reducing the requirements of becoming a bank agent. The banks should employ customized software that records relevant information on automated teller machine cards so that banks can establish whether unauthorized transaction has taken place or not.

The researcher aim was to ascertain what exactly affects the financial performance of Commercial banks in Central Equatorial State, South Sudan, a case of KCB South Sudan, African National bank, Ecobank-South Sudan, CFC Stanbic Bank-South Sudan, Ethiopian Commercial Bank-South Sudan and Ivory Bank branches in Juba. There are numerous elements that affect performance, this study focused on technological innovations that are thought to drive financial performance. The study was divided into three main common areas that have recently caught the attention of the banking industry namely internet banking, agency banking and mobile banking that affect the financial performance of KCB South Sudan, African Nation bank, Ecobank-South Sudan, CFC Stanbic Bank-South Sudan and Ethiopian Commercial Bank-South Sudan in Central Equatorial State. Central Equatoria State has been chosen since it hosts Juba as the capital City and an epicenter of numerous commercial activities. The study’s specific objectives were to determine the influence of agency banking, mobile banking, Automated Teller Machines and debit and credit cards on financial performance of commercial banks in Central Equatorial State. The study employed a descriptive research design. The study targeted population of 294 respondents. The sample size was 169 staff of KCB South Sudan, African Nation bank, Ecobank-South Sudan, CFC Stanbic Bank-South Sudan, Commercial Bank of Ethiopia-South Sudan and Ivory Bank spread across the branches in Juba, Central Equatoria State. Respondents were selected using purposive random sampling. Structured questionnaires were used to collect primary data from respondents while secondary data was obtained from the annual financial reports from KCB South Sudan, African Nation bank, Ecobank-South Sudan, CFC Stanbic Bank-South Sudan, Commercial Bank of Ethiopia-South Sudan and Ivory Bank of South Sudan. Measures of central tendencies were used to describe the results and data was presented using graphs charts and tables. The influence of dependent and independent variable was depicted by use of multiple regression. The study found that agency banking significantly influences performance of commercial banks in Central Equatoria State, South Sudan (β= 0.889; p=0.000). The study revealed that mobile banking significantly influences performance of commercial banks in Central Equatoria State, South Sudan (β= 0.613; p=0.000). The study established that automated teller machines significantly influences performance of commercial banks in Central Equatoria State, South Sudan (β= 0.744; p=0.000). The study found that debit and credit cards significantly influences performance of commercial banks in Central Equatoria State, South Sudan (β= 0.640; p=0.000). The study concluded agency banking, mobile banking, automated teller machines and debit and credit cards significantly influences financial performance of commercial banks in Central Equatorial State, South Sudan. The study recommended that commercial banks in South Sudan should ensure that bank agent’s guarantees security of data and information that is operated on the agency banking platform. The study recommends that commercial banks in South Sudan should work with regulatory authorities to establish a clear and comprehensive regulatory framework for agency banking including guidelines on risk management, customer protection, and agent licensing. The study also recommends that commercial banks in South Sudan should implement stringent security protocols and fraud prevention mechanisms for ATMs. 

The study examines the effect of electronic banking on financial inclusion in Nepal. Financial inclusion is the dependent variable. The selected independent variables are automated teller machine, point of sale terminal, internet banking, mobile banking, andagency banking. The primary source of data is used to assess the opinions of the respondents regarding the financial inclusion and electronic banking. The study is based on primary data of 150 respondents. To achieve the purpose of the study, structured questionnaire is prepared. The regression models are estimated to test the significance and importance of electronic banking on financial inclusion in Nepal. The study showed that automated teller machine has a positive impact on financial inclusion. It indicates that increase in number of automated teller machines leads to increase in financial inclusion. Similarly, mobile bankinghas a positive impact on financial inclusion. It indicates that better orientation towards mobile banking leads to increase in financial inclusion. Likewise, internet banking has a positive impact on financial inclusion. It indicates that better orientation towards the internet banking leads to increase in financial inclusion. Furthermore, agency banking has a positive impact on financial inclusion indicating that increase in agency banking leads to increase in financial inclusion. Lastly, point of sale has a positive impact on financial inclusion. It indicates that better orientation towards point-of-sale services leads to increase in financial inclusion.

Purpose: The purpose of the study was to investigate the effect of automated teller machines and mobile banking on financial inclusion among commercial banks in Somalia.
 Methodology: A descriptive survey design was adopted targeting 6 commercial banks in Somalia that had successfully rolled out electronic banking while the respondents covered the Banks staff, like managers and officers from each institution respectively and census was used. Primary data was collected on automated teller machines, mobile banking and customer deposits with the aid of the questionnaire. The analysis was conducted through the Statistical Packages for Social Sciences version 24 utilizing descriptive statistics (means and standard deviations) and inferential statistics (correlation and regression analysis) and presented through tables.
 Findings: The study found out that automated teller machines banking and mobile banking are significant predictors of financial inclusion among commercial banks in Somalia. Thus, electronic banking is a significant enabler of financial inclusion of commercial banks.
 Unique contributions to theory, practice and Policy: The study contributes to the extension of the views of financial intermediation theory and the diffusion of innovation theory. The study implies that the adoption of electronic banking as influenced by the diffusion of innovation theory allow financial institutions to effectively realize their financial intermediation role in the economy. The senior management team of commercial banks in Somalia should allocate more resources towards financial innovation and enhancement of the existing electronic banking channels and infrastructures. The policy makers at the Central Bank of Somalia need to develop progressive regulations and rules that would promote the adoption of financial innovation while boosting financial inclusion

The study was conducted to examine the influence of processes innovation strategy on the performance of commercial banks in Kenya given the dynamism in the business environment hence the need for organizations to move with speed and make choices that add value to customers and those which will enable the organization remains relevant in such a dynamic business environment. Diffusion of innovation theory was incorporated in the study since it widely supports the spread of agency banking, mobile technology, and online banking. An explanatory research design was used. Both primary and secondary data were collected. Primary data was collected using a questionnaire while secondary data was collected from relevant literature materials, the organization’s annual reports, and the website. Cronbach’s Alpha coefficient was used to test the reliability of the data with an acceptable level of 0.7 at a confidence level of 95%. The study targeted tier 2 Commercial Banks in Kenya with the top management bank employees as the key respondents. The target population was 144 top management bank employees. The study employed a census targeting the entire population of 144 top management bank employees. Out of the 144-target population, 120 top management employees responded to the questionnaire hence results from the findings were based on the 120 respondents. Descriptive and inferential statistics were used in analyzing the data. Descriptive statistics entailed the measure of central tendency (mean) and the measure of dispersions (standard deviation). The statistical package for social sciences (SPSS) was used to generate the descriptive statistics. Inferential statistics entailed regression and correlation analysis. Data were presented using tables. The study established that there was a significant influence of process innovation strategy on the performance of commercial banks in Kenya. The findings of the study concluded that mobile banking and internet banking have greatly enabled customers to access essential services in the comfort of their homes or offices and without necessarily having to go to the bank whereas agency banking has significantly reduced the queues in the banking halls and customers do not have to wait for long hours to be served at the bank. The study recommended that banks need to adopt a process innovation strategy in order to enhance performance.

The purpose of the study was to investigate factors affecting financial inclusion of banks in Malaysia with specific focus on mobile banking, agency banking, financial awareness, and products diversification as an instrument in financial inclusion in Malaysia. The research was supported by theory of financial innovation, modern development theory and agency theory. The population of the study was 35 respondents who comprised 19 branch managers, 16 operation managers and the C.E.O and since the sample was very small, the research applied census approach. The research used primary data which was collected using a questionnaire that was filled by the operation managers, branch managers and the CEO. The study adopted a descriptive research design. Data was analyzed using descriptive statistics. The data was presented in tables and results disseminated in percentages. The study established that the four factors; mobile banking (80%), agency banking (64%), instant credit facility (100%) and promotion of bank products (100%) were significant factors influencing financial inclusion for banks in Malaysia. The study recommends that financial education should be regularly provided to the residents from all corners of the study area, there is need for the bank to consider agency outlets as some said that branches are far from them thus holding cash in hand, the bank management to improve on their lending policies particularly in adopting simplified loan application procedures and advancing instant credit facilities to enable its members execute their businesses and investments with efficiency, and leverage on new technology such as mobile banking to break physical barrier and achieve efficiency in service delivery. The study findings were significant to banks in improving their financial inclusion, and future researchers. Keywords: Financial Inclusion, mobile banking, agency banking, instant credit facility, promotion on financial inclusion

Financial inclusion is an important step in development, as access to finances can help the women to build money and lift themselves out of poverty. Lack of financial inclusion among women in Narok County is one of the many factors leading to financial exclusion and an introduction of digital banking is the remedy to its problems. Financial inclusion of women contributes immensely in empowering them. Digital banking in Kenya has been characterized by rapid technological change in the finance sector that has led to the development of mobile banking, online banking, ATMs and agency banking. The banking sector has undergone substantive transformation particularly from the year 2007. This study sought to establish the effects of digital banking and financial inclusion of Women Enterprises in Narok County, Kenya. Financial inclusion includes the provision of affordable financial services, which includes; access to payments and remittance facilities, savings, loans and insurance services by the formal financial system to those who tend to be excluded The study was anchored on finance growth theory and financial asymmetric theory. This study used descriptive research design and data was collected from the target population of all the 184 women owned enterprise in Narok County, Kenya. For this study census sampling was adopted to where all the population will be included in study since the number of target population is 184. Primary data was collected using a semi structured questionnaire to be administered to the women business owner through face to face interviews. The collected data was analysed using descriptive statistics methods; mean, mode, median, standard deviation, percentages and frequencies. Inferential statistical methods included multiple regression analysis was used to establish the relationship among variables. It was established that digital banking services significantly and positively influenced financial inclusion of women enterprises in Narok County. The study concluded that agency banking, mobile banking, online banking and ATM services significantly influenced the access and use of banking services by the locally based women enterprises in Narok County. It was further concluded that the women enterprises did not adequately use online banking due to limited literacy level, computer proficiency and internet availability. The study recommends that the available financial sector players in Narok County needs to sensitize SMEs especially women-owned to ensure that they are aware of the digital services available to be in the loop to enhance financial inclusion. The study recommends that the available digital banking providers need to improve formation of groups among the users of the services to enable improve usability. The study recommends further that the women enterprises managers and proprietors need to be in groups to develop each other and assist access, use and improve digital banking and financial inclusion.

Mobile banking is a precursor for the realization of financial inclusion among commercial banks in Kenya. The study's main objective was to determine the effect of mobile banking on financial inclusion among commercial banks in Kenya. The study adopted a positivism research philosophy. The study adopted an expo-facto research design because secondary data was the primary source data. The target population was 43 commercial banks in Kenya. The sample size was 39 commercial banks, but only ten commercial banks were selected because they had the best mobile banking apps. Inferential statistics adopted were; Pearson correlation and regression analysis. The study results revealed that mobile funds transfers significantly affect financial inclusion (β =1.697, p= 0.000). Cash withdrawals via mobile platforms significantly affect financial inclusion (β =1.195, p= 0.000). The study concluded that mobile banking has a significant effect on financial inclusion among commercial banks. In contrast, deposits via mobile platforms have a significant positive effect on financial inclusion (β =.354, p= 0.000). The study recommends that all financial institutions should adopt mobile banking as it helps to achieve financial inclusion. The banking sector should adopt the most appropriate mobile banking strategies to enhance financial inclusion.

Purpose: Kenyan banks are rapidly adopting e-banking options like mobile banking and agent networks, driven by increased smartphone usage. While research suggests a link between e-banking and improved financial performance, a more nuanced understanding is needed. This study aimed to explore this connection in detail, considering various e-banking features and customer demographics, to provide valuable insights for Kenyan banks. This study explores the relationship between e-banking strategies and the financial performance of commercial banks in Kenya, acknowledging the sector's significant shift towards digital financial services. The research addresses the critical gap in understanding how specific e-banking features, adoption rates, and security measures influence financial outcomes. Methodology: The study employed a desktop research design, analysing existing data from sources like published research articles, industry reports, and central bank publications, to investigate the relationship between e-banking strategies and the financial performance of commercial banks in Kenya. The findings were presented in tables. Correlation and regression analysis was applied. Findings: Mobile banking in Kenya is set to continue its rapid growth, with adoption rates already exceeding 80%, as reported by the Central Bank of Kenya. User engagement is high, driven by features like money transfers, airtime top-ups, and bill payments, with banks such as Equity Bank, KCB, and Standard Chartered leading with robust mobile apps. Banks are also leveraging extensive agent networks to expand services to underbanked areas, promoting financial inclusion. Security and financial literacy initiatives are prioritized, with multi-factor authentication and transaction encryption utilized to build customer trust, underscored by studies showing a positive correlation (rho = 0.32, p-value < 0.01) between mobile banking usage and bank profitability. The positive impact on financial performance is evident through increased transaction volume and revenue growth, with agent banking contributing to deposit mobilization and cost efficiency, supported by research demonstrating a significant correlation (rho = 0.52, p-value < 0.01) between the number of agents and total deposits. Furthermore, financial literacy programs enhance customer trust (r = 0.53, p-value < 0.02), fostering long-term relationships and higher customer lifetime value. To capitalize on these findings, government authorities should facilitate policy frameworks, while commercial banks should invest in technology and expand banking networks. Educational institutions should integrate financial literacy into curricula, and NGOs can support community-based programs. International agencies should provide funding and technical assistance to promote financial inclusion and cybersecurity resilience. Unique Contribution to Theory, Practice and Policy: This study on e-banking strategies in Kenya offers significant contributions that extend beyond immediate findings, shedding light on theoretical considerations, practical applications for banks, and potential policy avenues. The study reinforces the value of integrating the Technology Acceptance Model (TAM) and Resource Dependence Theory (RDT) for a comprehensive understanding of e-banking adoption and performance, highlighting the role of financial literacy in user engagement. Practically, it emphasizes the importance of continuous innovation in mobile banking, strategic agent banking partnerships, and investments in security and financial literacy. Policy implications include the need for balanced data privacy regulations, government-supported financial literacy initiatives, and encouragement of data analytics for optimizing e-banking strategies. These insights aim to promote financial inclusion, trust, and long-term success for Kenyan banks and their customers.

The deposit-taking Saccos in Kenya have registered an increased amount of non-performing loans as well as a reduction in liquidity, which have affected their overall financial performance. There is little research on digital transformation and the financial performance of recipient pockets. Therefore, this study aims to examine how digital transformation affects the financial performance of Nairobi-based Saccos. Specific objectives include investigating the impact of mobile banking, ATM, agency banking, and Internet banking on financial performance. Financial intermediation theory, agency theory, and transaction cost innovation theory support this research. Explanatory research is used in this study. The target group consists of 44 licensed savers. 30 Saccos were included in this study. This study uses secondary panel data from 2017 to 2021. The method used is panel regression. Regression and correlation were also employed. The results showed that agency banking (β=0.046817, p<0.05) and internet banking (β=0.109425, p<0.05) had a positive and significant effect on the financial performance of Saccos in Nairobi districts. The results also show that mobile banking (β= -0.00945, p>0.05) and ATM (β=0.072028, p>0.05) have no significant impact on the financial performance of saccos by taking deposits in cities in Nairobi. The study concluded that the key factors improving the financial performance of Sacco's deposit beneficiaries in Nairobi District were agency banking and online banking. This study also concludes that ATMs and mobile banking have no impact on deposit-taking saccos' financial success. The paper makes recommendations for enhancing agency banking services for Saccos that accept deposits. The study also suggests enhancing the online banking system for managing Saccos that accept deposits. The research also advises the leadership of deposit-taking Saccos to review their policies on ATMs and mobile banking to identify any potential obstacles to taking appropriate action.

This study explored the impact of FinTech and Government Policies on Financial Inclusion for small-scale fish farmers in Homa Bay County, Kenya. The study focused on how access to finance has been widened through agency banking, mobile money and online banking services among these people who had low incomes or were marginalized. The research also examined whether government regulations affect the relationship between fintech channels and financial inclusion. The study was underpinned by Innovation Diffusion Theory, Financial Intermediation Theory, Technology Acceptance Theory and Public Interest Regulation Theory. This study employed causal research design with a sample size of 495 small scale fish farmers using stratified random sampling technique that yielded 144 respondents. Data analysis involved multiple regression, correlation analysis and diagnostic tests that utilized SPSS 26.0 for data analysis. The results showed that agency banking; mobile money services and online banking together explained 58.1% of variation in financial inclusion among the farmers indicated by R squared of 0.581.The findings revealed that Agency Banking had significant effect on financial inclusion (β = .231, p = .001 < .05), as well as Mobile Money Services (β = .196, p = .019 < .05) and Online Banking Services (β = .410, p = .000 < .05). Therefore, the study concludes that Agency Banking; Mobile Money and Online Banking play important role in enhancing financial autonomy among small scale fish farming communities through increased access to bank accounts, secured transactions processes and agent incomes respectively. In view of the findings, the study recommends that financial institutions together with fintech companies should invest in platforms which are user-friendly safe secure meant for use by small holder dairy farmers themselves. Keywords: Agency banking, Mobile money services, Online banking services, Government regulations, Financial technology services, Financial inclusion