Virtual Banking and Growth of Customer Base of Commercial Banks in Nairobi City County, Kenya

This study sought to examine the influence of virtual banking which uses internet as a means of communication to deliver banking services on the growth of customer base of commercial banks with specific focus on Nairobi County, Kenya. The objective of the study was determining how adaptability of virtual banking; establish affordability of virtual banking; assess accessibility to virtual banking and determine the moderating effects of adaptability, affordability, and accessibility on customer base growth of commercial banks in Nairobi County, Kenya. The study showed how adaptability, affordability, and accessibility of virtual banking influence customer base growth. This study was anchored on three key theories, Innovation Diffusion theory, Theory of Planned Behaviour and Technology Acceptance model. The study adopted descriptive survey research design and use stratified random sampling. The target population was 84 management staff, 120 Tellers, 150 retail customers, 100 corporate customers and 50 System Administrators from Tier I, II and III commercial banks in Nairobi County. The sample size comprised of 36 management staff, 51 Tellers, 64 retail customers, 43 corporate customers and 21 System Administrators. Responses were received from 200 respondents which translates to 91.7% response rate. A structured questionnaire was used to gather the primary research data through drop and pick later data collection procedure. Data was cleaned before being entered for analysis with the help of SPSS-26. Data was analysed using descriptive statistics and presented inform of tables and figures. This enabled the researcher to determine the contribution made by the independent variables on the dependent. Pearson correlation coefficient of 0.733 shows that virtual banking accessibility had a positive significant correlation with growth of customer base (r = 0.733, p < 0.05); virtual bank adaptability (r = 0.755, p < 0.05); virtual bank affordability (r = 0.895, p < 0.05); internet (r = 0.572, p > 0.05). The overall R2= 0.834 indicates that 83.4 percent of the variation in growth of customer base was explained by the independent variables while 16.6 % variation in the dependent variable is explained by other factors that were not included in current study. The study recommends for a review on the cost of online transactions so as encourage more customers to use the virtual banking platforms. There is need also to enhance network coverage in the country and especially in the remote places.