The Purpose of this study was to investigate the factors that influence the adoption of retail banking strategies in Kenya. The specific objectives of the study were: to examine the extent to which changing customer preferences affect adoption of retail banking strategies in Kenya; to assess the extent to which competition affects adoption of retail banking strategies in Kenya; to evaluate the extent to which technology affects adoption of retail banking strategies in Kenya. A descriptive design was used to undertake the current research. The population of interest in this study was all commercial banks in Kenya. According to the Central Bank of Kenya report as at 31st December 2010, there were 42 commercial banks in Kenya. A representative sample of 21 commercial banks, representing about 50% of the whole population was selected using stratified random sampling technique. Primary data was collected with the aid of a semi-structured questionnaire. The researcher personally collected the questionnaires. In addition, personal interviews were conducted with 6 of the respondents selected at random. For purposes of the current study, the data was analyzed by employing descriptive statistics such as frequencies, mean scores and standard deviations. The findings of the study indicate that customer preferences influenced the adoption of retail banking strategies. Specifically, customer preferences influenced adoption of the following practices, in order of strength:- reduction of minimum balances to open and maintain account; product diversification; market differentiation; and availability of a personal banker in the branches. Ranked the least was installation of Automated Teller Machines. The findings of the study further indicate that competition influenced the adoption of retail banking strategies. Specifically, competition influenced adoption of the following practices, in order of strength: - product diversification; market differentiation; increased branch network; and reduction of minimum balances to open and maintain account. The least ranked activities were personal selling of bank products and offering bank products online. Further, the findings indicate that Technological changes influenced the adoption of retail banking strategies. Specifically, technological changes influenced adoption of the following practices, in order of strength: - offering bank products online; installation of Automated Teller Machines; and product diversification. In conclusion, changes in customer preferences have also imposed changes in decisions related to offered services, as these services need to be of high quality in order to satisfy today’s demanding clients. The perceived value of the products and services of banks must be proportional to the prices charged while distribution means should be used in order to achieve a high level of satisfaction. Competition has influenced the strategic importance of satisfaction, quality and consequently loyalty, in the battle for winning consumer preferences and maintaining sustainable competitive advantages. Great attention is paid to all the bank-customer touch-points, aiming to optimize the interaction, towards affecting specific customer behavior variables. The use of information technology in retail banking creates unprecedented opportunities for the banks in the ways they organize financial product development, delivery, and marketing via the Internet. Keywords: Retail banking strategies, Changing customer preferences, Competition, Technolog
