Abstract
The current study sought to establish the relationship between strategic adoption of technological innovations and competitive advantage of commercial banks in Kenya. Specific objectives were to establish the influence of E-Money transfer technologies, telephone banking technologies, internet banking technology and internal controls on competitive advantage of Commercial Banks in Kenya. Theories adopted include: Resource-Based View Theory, Innovation diffusion theory, Competitive advantage theory and Disruptive Innovation Theory. The study design employed was descriptive research design. The target population comprised of 43 commercial banks operating in Kenya where the unit of analysis comprised of 1 Branch Manager, 1 Head of Customer Service, 1 Head of IT Support and 2 Relationship officers from each bank making a total of 215 respondents. The primary data collection instruments used was a semi-structured questionnaire containing both closed and open-ended questions and issued to 215 study population respondents. The collected data was analyzed by employing both inferential analysis and descriptive statistics using Statistical Package for Social Science (SPSS) V25 and Microsoft Excel. A random pilot study carried on 21 respondents was done to assess the data collection instrument on validity and reliability. Out of the issued 215 questionnaires to the respondents, 192 were completed and successfully returned. This equates to 89.3% response rate, an appropriate for conducting analysis and making inferences. Tables and figure formats were used in presenting the study results and findings. The study findings were that the adoption of innovative technologies (E-Money transfer, Telephone banking, Internet banking and, Internal controls) had positive and significant influence on competitive advantage of Commercial banks in Kenya. The study recommended the use of credit cards to make online transactions like Cardless payments to improve access to financial services, Commercial banks to consider adapting mobile-based innovative Fintech to increase overall reach of the banking services to the populace, commercial banks to incorporate automated alert systems in case of theft at the ATMs and finally, appropriate systems authenticating user identity be put in place in remote areas to enhance security and increase user confidence in using internet technologies.