Dr. Fred Sporta, Tiberious Wesonga Muganda


The core objective of this study was to determine the relationship between agency banking and the operational efficiency of commercial banks in Kenya. The target population comprised of 15 commercial banks that utilized agency banking. The study covered the period 2014-2018 and thus the findings fundamentally reflect the events and conditions that happened during that period. Various diagnostic tests were done on the data to test normality, multicollinearity and heteroscedasticity. The data was analyzed using descriptive statistics and panel data analysis. The results revealed that agency banking has a significant effect on operational efficiency. It was found that agency banking affected the operating efficiency. The study recommends that the banks should design a digital strategy anchored on strong knowledge of their digital maturity, business operating models, flexibility and human capital. The banks should also consider fostering partnerships with technology start-ups or other third-party relationships in order to maximize the benefits of agency banking innovations.

 Keywords: Agency Banking, Operational Efficiency

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