The study had an objective of determining impact of digital innovations on the performance of banking industry in Kenya. The study involved a population of 42 registered commercial banks which were in operation as at 31st December 2019. Secondary data was collected for the period ranging between 2012 to 2019. Quarterly data on net income, Asset quality, and liquidity, was retrieved from the individual commercial banks’ annual reports. Data on transactions numbers through the mobile devices, value of bank transactions through the Internet devices in the whole year, and the value of transactions through the ATMs was obtained from the CBK’s annual survey report. Diagnostic examinations on normality, linearity, multicollinearity, and autocorrelation were done on the collected data to establish its suitability in the formulation of linear regression model. The study applied statistics of description such as median and mode for data analysis. Inferential statistics were used in the study through the multiple regression models so as to find out the link between the explained and explanatory variables. Correlation analysis established ATM banking showed positive relationship with financial performance while internet banking showed a positive but insignificant linkage with banking industry performance. Regression analysis on the other hand revealed that ATM banking and internet banking had a tangible and significant relationship with performance of commercial banks while mobile banking had negative and insignificant relationship to the financial performance. The study recommended banking industry to increase their application of such digital innovations as mobile banking, ATM banking and internet banking..

show more