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Abstract

Purpose: To assess the effect Open banking lending services on the financial sustainability of commercial banks
Design/Methodology/Approach: The research design used was a descriptive study that sought to capture the prevailing situation in lending innovations and its effect on financial sustainability. The sample was restricted to commercial banks in Kenya which are divided into Tier 1, Tier 2 and Tier 3 banks where the total population of the sample was 7 Tier 1 banks, 19 Tier 2 banks and 13 Tier 3 banks. The stratified random sampling method was employed to identify a representative sample, and this ensures that insights are captured in various bank types. Data were collected with a structured questionnaire, The reliability and validity of the instrument was assessed with a pilot study, using Cronbach’s alpha as a measure of internal consistency, Keiser- Meryer -Olkin (KMO) was used to assess construct validity. Data Analysis: The assumptions of Classical Linear Regression Model (CLRM) such as linearity, normality, homoscedastic were tested. The findings were presented in form of descriptive and inferential analysis such as regression coefficients, significance levels and graphical analysis to represent major findings.  
Findings: The findings of the study indicated a positive significance effect between open banking and financial sustainability (R=0.731, P=0.001)
Implications/Originality/Value:There was adequate evident to reject the null hypothesis that posits, Open banking has no significant positive effect on the financial sustainability of commercial banks in Kenya.