Understanding Mobile Banking from a Theoretical Lens: Case Studies of Selected Kenyan m-Banking Products

Understanding Mobile Banking from a Theoretical Lens: Case Studies of Selected Kenyan m-Banking Products

Martina Mutheu Mulwa (School of Journalism and Mass Communication, University of Nairobi, Kenya) and Timothy Mwololo Waema (School of Computing and Informatics in the University of Nairobi, Nairobi, Kenya)
Copyright: © 2016 |Pages: 15
DOI: 10.4018/IJIDE.2016010105
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Characteristic of every developing nation, Kenya has found itself at crossroads; defining the banking industry with the urge to provide banking services to majority of the unbanked populations. Mobile banking is a banking model that has been adopted by Kenyan Banks to reach out to unbanked populations. This paper is based on a case study conducted in Kenya on selected mobile banking products in 2012. The Actor Network theory methodology was used to identify and follow actors. Using in-depth interviews with key informants, survey of users and agents as well as focus group discussions and observation, it was established that agent phones and Point of service (POS) devises were used to deliver traditional banking services to users whose access mode was their mobile phone or debit cards. There existed partnerships between banks and mobile network operators whose operations were regulated by the Central Bank of Kenya and the Communications Authority of Kenya. This paper seeks to explore fundamental requirements for the interplay of actors in the execution of mobile banking services. It critically analyses data collected, with reference to the Network Society theory by Manuel Castells and Actor Network theory by Michael Callon and Bruno Latour, to inform on cross-sectoral partnerships and user attributes necessary in mobile banking uptake and use.
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2. Problem Statement

Even though the telecommunications and financial service industries share important traits, they have some fundamental differences that partnerships can help overcome. Telecoms need certain capabilities in order to provide wireless finance services. Those they do not already possess, they can acquire relatively cheaply by allying themselves with banks, and the combination can create competitive advantage with the right regulations (Wouter et al, 2010). Despite these mergers between financial players and telecommunication companies promising to address financial exclusion particularly those associated with access and business volume; positive effects especially of the transformational nature are yet to be realized because partnerships in Kenya have been rocky (M-kesho (CBK, 2012) M-shwari, KCB-M-pesa among others1). Consequently take up of mobile banking products targeting poor and marginalized populations has been low as less than 1% of total digital transactions among low income households are digital (CGAP, 2015). Furthermore there is a tendency by actors to channel lots of effort on innovations that are additive as opposed to those that address financial inclusion2. So what ails the relationships in mobile banking and what needs to be done to stabilize these networks for sustained service delivery? Who are the actors in mobile banking? What are their roles in the emergent mobile banking networks? These are the questions that guided the research reported in this paper.

The specific objectives of the paper were to ascertain the usefulness of the Actor Network as a framework for informing trends in mobile banking and to determine the role of actors in the design, roll out and use of mobile banking products for financial inclusion.

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