Innovation and the performance of financial technology companies in Kenya

Abstract

Innovations have continued to be the driving force of organizational performance of companies operating globally and locally. The general objective of the study was to determine the effect of innovations on the performance of financial technology companies in Kenya. The study also sought to establish the effect of process innovation on performance of financial technology companies in Kenya; determine the effect of product innovation on performance of financial technology companies in Kenya; and determine the joint effect of product innovation and process innovation on performance of financial technology companies in Kenya. The study adopted an explanatory research design to determine the problem under investigation. Target population of the study was the financial technology companies that are license by the Central Bank of Kenya to operate in Kenya. Because the population is small, a census was conducted in this study. The questionnaire was the primary tool in data collection. Validity of the research instrument was detennined by using industry experts like lecturers and experienced employees working with financial institutions while reliability of the research instrument was tested using Cronbach’s Alpha that stipulates that items of the instrument are deemed to be reliable if they meet the threshold or reliability coefficients of more than 0.7. Reliability was achieved by conducting a pilot study. Data was analyzed using inferential statistics such as simple regression and multiple regression. Descriptive statistics were used to summarize and characterize variables which were gathered from the administered questionnaires. Simple and multiple regression analysis were used to find out the effect between variables of the study. Regression analysis was conducted at 0.05% significance level. The analyzed data was presented using tables. The study found that there is a positive relationship between the implementation of process innovations and the performance of financial technology companies in Kenya. The study also revealed that there is a positive and significant relationship between implementation of product innovations and the performance of financial technology companies in Kenya. The findings of the study also indicated that product and process innovations jointly are a key determinant of the performance of the financial technology companies in Kenya. The study concluded that process and product innovations have a significant effect on the performance of the companies. The study recommends that financial technology companies in Kenya should embrace and implement process and product innovations in order to drive their performance and also grow their market share and also improve their performance.