11 Mobile Banking Income margin 25 Table 4 12 Mobile Banking Investment 26

11 mobile banking income margin 25 table 4 12 mobile

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Table 4. 11: Mobile Banking Income margin ......................................................................................... 25 Table 4. 12: Mobile Banking Investment ............................................................................................... 26 Table 4. 13: Model Fitness ....................................................................................................................... 27 Table 4. 14: Analysis of Variance ............................................................................................................ 27 Table 4.15: Regression Coefficients ........................................................................................................ 28 xi
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CHAPTER ONE INTRODUCTION This chapter presents the background of the study, statement of the problem, the objectives of the study that is the general and the specific objectives. It also captures the research questions, the justification of the study, the scope and the limitations of the study. 1.1 Background of the Study Innovation involves firms developing new products or new production processes in order to perform their operations in a more competitive manner, in many instances the new products could be as a result of new processes, (Tufano, Lawrence, 2010.) Tremendous changes have taken place in financial sector in Kenya. This include the significant increase in innovations that have changed the way commercial banks operate. the business environment continues to receive dynamic and significant innovations with the impact of globalization that in turn are transforming operational management of banks. In the financial services industry, innovation is depicted to as an act of creating and making popular technologies, financial instruments and institutions and markets which helps in the access to information, trading and means of payment, (Solans, 2003.) Akamavi (2005) notes that innovation has led to latest key changes including new products hitting the market a higher cost of developing them, more customers demanding more products, increase competition and the instant speed of technical innovation and firms partnering in the financial services sector. Rubio and Aragon (2009) noted that the origins of innovative technologies in the banking sector can be traced to the introduction of the Automated Teller Machines (ATMs) in the United States in 1969. During this period which, ATMs revolutionized banking in that customers no longer had an obligation to visit banking halls to do their transactions, instead they could be done anywhere the bank ATMs were located. Anbalagan (2011) argues that the creation of Automated Teller Machine for most people was a great financial innovation than the asset securitization. Yildrim and Philippatos (2007) in their study on the banking sectors of 11 Latin American countries stipulate that banks will engage in differentiation processes of the products they supply, 1
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and financial innovation due to the level of rivalry between them. Yildrim and Philippatos (2007) find that a high level of competitiveness is as a result of a high degree of foreign investment in banks’ capital investment. This improves the quality of the various products they produce thus stimulating financial innovation by introducing more management techniques, modern skills, and technologies. Anbalagan (2011) finds that using telecommunication technology and computers has influenced financial innovations.
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