Research Article
Financial Technology Adoption and Technical Efficiency of Commercial Banks in Kenya
Henry Bartoo*,
Samuel Warui,
Robert Kasisi
Issue:
Volume 13, Issue 2, April 2025
Pages:
64-70
Received:
17 February 2025
Accepted:
25 February 2025
Published:
21 March 2025
DOI:
10.11648/j.jfa.20251302.11
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Views:
Abstract: The adoption of financial technology (FinTech) has transformed the banking sector by enhancing operational efficiency and service delivery. This study examines the relationship between FinTech adoption and the technical efficiency of commercial banks in Kenya. Using Pearson correlation analysis, the study establishes strong positive relationships between FinTech adoption and technical efficiency (r = 0.68), as well as mobile banking (r = 0.66) and digital lending (r = 0.62) with technical efficiency. A multiple regression model was employed to assess the predictive influence of FinTech adoption, mobile banking, and digital lending on technical efficiency. The results indicate that all three variables significantly impact technical efficiency, with FinTech adoption (β = 0.42, p < 0.01), mobile banking (β = 0.35, p < 0.01), and digital lending (β = 0.29, p < 0.01) playing a crucial role in optimizing banking operations. The study concludes that FinTech adoption is a key driver of technical efficiency, as it streamlines banking operations, reduces transaction costs, and enhances customer experience. Despite progress in FinTech integration, commercial banks still face challenges related to system reliability and scalability, highlighting the need for continuous investment in digital infrastructure. The study recommends that commercial banks in Kenya prioritize investment in advanced FinTech solutions, particularly by expanding mobile banking functionalities and optimizing digital lending platforms through data-driven risk assessment. Additionally, financial regulators should create policies that foster an enabling environment for FinTech innovation while ensuring data privacy and cybersecurity. Capacity-building initiatives and strategic partnerships between banks, FinTech firms, and academic institutions are also crucial in enhancing FinTech adoption and sustaining long-term efficiency gains. These findings contribute to the understanding of FinTech’s role in improving banking performance and provide insights for policymakers and industry stakeholders aiming to enhance financial sector efficiency.
Abstract: The adoption of financial technology (FinTech) has transformed the banking sector by enhancing operational efficiency and service delivery. This study examines the relationship between FinTech adoption and the technical efficiency of commercial banks in Kenya. Using Pearson correlation analysis, the study establishes strong positive relationships b...
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Research Article
Big Is Beautiful: It Matters for Small Investors
Issue:
Volume 13, Issue 2, April 2025
Pages:
71-85
Received:
25 February 2025
Accepted:
8 March 2025
Published:
21 March 2025
DOI:
10.11648/j.jfa.20251302.12
Downloads:
Views:
Abstract: Experimental finance stresses the role of emotions and psychological feelings in understanding the behavior and decision-making of investors on the stock markets. This article focuses on individual investors, who are thought to develop a kind of predisposition to behavioral and cognitive biases. Based on data collected from an experiment in the field of trading and supported by the use of qualitative analysis tools, we demonstrate that the participants in the experiment are more likely to trade in companies with the highest market capitalizations. Indeed, by examining and analyzing the different investment strategies chosen during the experiment, we observe a strong link between the company size and the investment choices. We also highlight, during the experiment, intensive media coverage (or media overexposure) specifically directed to the largest companies. To some extent, this can be explained by the large number of opinions and recommendations issued by financial analysts that are either directly related to companies in the news or focused on companies in the same sector (spillover effects). Financial analysts can therefore be considered as helping to reduce uncertainty and providing guidance for individual investors who are chronically in need of references on the stock markets. In addition, our results suggest that a lack of experience and a low level of familiarity regarding how stock markets work will naturally direct the attention of investors towards companies extensively covered by financial analysts (in other words, large ones) and the most media covered ones. To a certain extent, corporate communications and the marketing of stock market websites would therefore become central markers for the definition of investment strategies. The data collected show the development of “all that glitters attracts” bias, which can be explained by a strong focus on easily available and highly visible information (the availability bias). The more visible they would be, the larger the companies and the more they would be followed by financial analysts. We believe that how information is covered by the media leads to the development of herd behavior. Ultimately, stock market websites would therefore appear to facilitate behavioral and cognitive biases.
Abstract: Experimental finance stresses the role of emotions and psychological feelings in understanding the behavior and decision-making of investors on the stock markets. This article focuses on individual investors, who are thought to develop a kind of predisposition to behavioral and cognitive biases. Based on data collected from an experiment in the fie...
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,
Kevin Kristoforidis
