Influence of Financial Technology Systems on Financial Performance of Public Universities in Kenya

Abstract

Public universities in Kenya have faced persistent financial challenges over the years, including declining government funding, rising student enrollment, inefficient fee collection processes, poor financial management practices, and escalating operational costs. These challenges have adversely affected their financial sustainability and overall performance. With the rapid advancement of financial technology, there is growing potential for public universities to leverage digital innovations to improve their financial operations, enhance resource management, and strengthen institutional performance. The purpose of this study was to investigate the influence of financial technology systems on financial performance of public universities in Kenya. The study specifically focused on establishing the influence of digital payment systems, digital revenue collection systems, digital supply chain systems and innovative income streams influences on the financial performance of public universities in Kenya. This study was anchored on Technology Acceptance Model, Diffusion of Innovation Theory, General Systems Theory, and Schumpeter Theory of Innovation. A descriptive research design was employed in the study. The target population of the study comprised of 35 chartered public universities in Kenya. The units of observation comprised of Chief Financial Officers, IT Managers, Financial Analysts and Accountants. A census approach was employed. The study relied on both primary and secondary data. Primary data was collected through structured questionnaires, while a secondary data collection sheet was utilized in collecting secondary data. Both descriptive and inferential statistics were used to analyze the collected data. The statistics were generated through Statistical Package for Social Sciences. The results of the study were displayed inform of tables and figures. The study established that digital payment systems, digital revenue collection systems, digital supply chain systems and innovative income streams positively and significantly correlates with financial performance of universities. Additionally, digital payment systems, digital revenue collection systems, and innovative income streams positively and significantly influences financial performance of universities. The results bear the implications that enhancing aspects of digital payment systems, digital revenue collection systems, and innovative income streams leads to enhanced levels of financial performance. Digital supply chain systems however had a positive but insignificant influence on financial performance. The study concluded that digital financial systems positively influence financial performance of public universities in Kenya. The study provided recommendation to the management of the public universities to capitalize on investing on digital financial systems so as to leverage more on the benefits associated with the systems.