Product Innovation and the Performance of Financial Technology Companies in Kenya

Abstract

Product innovation has continued to be the driving force of the organizational performance of companies operating globally and locally. However, most of the financial technology companies operating in Kenya have continued to record deteriorating performance due to issues with product innovations. Despite the acknowledged fact that product innovations enhance the performance of firms, financial technology companies operating in developing countries and, more specifically, in Kenya are underperforming. The study sought to assess the effect of product innovation on the performance of financial technology companies in Kenya. The study was anchored on Schumpeter’s Theory of Innovation. The study adopted a descriptive research design to determine the problem under investigation. The target population of this study was 36 financial technology companies in Kenya. Because the population was small, a census was conducted in this study. A questionnaire was the primary tool in data collection. The validity of the research instrument was determined by using industry experts like lecturers and experienced employees working with financial institutions, while the reliability of the research instrument was tested using Cronbach’s Alpha. The Statistical Package of Social Sciences (version 21) was used to process and analyze the data. Data was analyzed using descriptive statistics and inferential statistics. Descriptive statistics such as frequency distributions, percentages, means, modes and standard deviations and frequency tables were used to summarize and relate them, which were attained from the administered questionnaires. Regression analysis was used to establish the effect between product invocation and the performance of financial technology companies in Kenya. The results were presented in tables. The results indicated that product innovation had a positive and significant effect on the performance of financial technology companies in Kenya. An improvement in product innovation led to improved performance of financial technology companies in terms of increased customer satisfaction, increased market share and increased staff satisfaction. The study recommends that the management of financial technology companies and companies of a similar nature need to recognize and appreciate the need to implement strategic initiatives like product innovations.