Influence Of Procurement Blockchain Technology On Financial Performance Of Commercial Banks In Kenya

Abstract

Blockchain solutions are receiving substantial interest in almost every industry, particularly Banking, with major investments being made on a global scale. Procurement is one of the Most prominent areas in which blockchain technology is being applied. The purpose of the Study was to examine the influence of procurement blockchain technology on financial Performance of banks in kenya with an aim of making recommendations on proper use of Procurement blockchain technology practices. The study aimed to establish how real time Settlement, smart contracts, operations visibility and smart order management influence Financial performance of banks. To achieve this, the study reviewed both theoretical and Empirical literature and propose the research methodology that addressed the gaps identified In literature as well as answer the stipulated research questions. This research study adopted Descriptive research design approach. The researcher prefers this method because it allows An in-depth study of the subject. The target population consist of commercial banks in Kenya and unit of analysis was the procurement departments. The unit of observation was 39 heads of procurement, 39 heads of finance and 39 heads of ict in all banks. The sample Size was 117 respondents. Data was collected using self-administered questionnaires. The Data collected was analyzed by use of descriptive and inferential statistics. Multiple Regression model was used to show the relationship between the dependent variable and the Independent variables. The data generated was keyed in and analyzed by use of statistical Package of social sciences (spss) version 22 to generate information which was also be Presented using tables, charts and frequencies. The response rate of the study was 79.49%. The findings of the study indicated that real time settlement, smart contracts, operations Visibility and smart order management have a positive relationship with financial Performance of commercial banks. Finally, the study recommended that institutions should Embrace procurement block chain technology so as to improve financial performance and Further research should be carried out in other institutions to find out if the same results Can be obtained. To ensure that commercial banks have better financial performance they Should focus more on adhering to real time settlement so as to ascertain the realistic Procurement cycle attainable by vendors, their realistic technical capacity and ensure that There is consistency of quality in goods supplied. With regard to the second objective, it Would be constructive for commercial banks to invest more in tamper-proof systems to Reduce the cost of procurement through unnecessary reworks and ensure professional Employees get it right the first time. In relation to operations visibility, the organizations Should form strategic technological alliances with their vendors so as to have a more Improved working relationship characterized by critical supplier credentials and verifiable Audit trails. Concerning smart order management, there is need for commercial banks to Always set aside a substantial part of their resources for activities that influence its core Operations. This is because decisions made here have major effects on the bank's Sustainability in the market.