The Role of Digital Marketing in Enhancing Retail Investor Participation in Kenya
DOI:
https://doi.org/10.53819/81018102t5399Abstract
Digital marketing initiatives, including blockchain-based processes, have become essential for financial markets seeking to enhance retail investor participation in today's dynamic investment environment. The capital markets sector, particularly in emerging economies, faces unprecedented challenges that require effective digital strategies to expand investor bases and maintain market liquidity. Thus, this study examined the role of digital marketing initiatives, incorporating blockchain-based processes such as digital identity verification and smart contracts, in enhancing retail investor participation in Kenya. The sample size comprised 900 retail investors and 45 financial intermediaries, representing response rates of 78.9% and 100% respectively. The findings showed that digital marketing initiatives, including blockchain-based processes, had significant positive effects on retail investor participation, demonstrating that financial intermediaries with structured practices for social media campaigns, influencer partnerships, financial literacy programs, digital identity verification, and smart contracts were better able to attract and retain retail investors. The study found that the implementation of digital marketing initiatives led to a 28% increase in retail investor participation. Financial literacy programs improved investor confidence and reduced the perceived complexity of investing, while blockchain-based digital identity verification improved security and reduced onboarding times. The study concludes that digital marketing initiatives incorporating blockchain-based processes are critical drivers of retail investor participation but remain underdeveloped due to inconsistent implementation, limited digital infrastructure, and insufficient regulatory support. The study recommends that financial intermediary managers should strengthen structured systems for digital marketing incorporating blockchain technologies and financial literacy programs, ensuring that such processes are institutionalized and supported through dedicated teams, professional development, and continuous learning mechanisms. The study further recommends that capital markets policymakers should enact supportive regulatory frameworks that reduce barriers, promote collaboration, and provide incentives that enable financial intermediaries to develop digital platforms with blockchain capabilities and advance inclusive capital market development.
Keywords: Digital marketing, blockchain technology, retail investors, Nairobi Securities Exchange, Mombasa, Kenya
References
Accenture. (2021). Digital identity: The current state of affairs. Retrieved from https://www.accenture.com/
African Development Bank. (2022). Blockchain technology in Africa: Opportunities and challenges. Retrieved from https://www.afdb.org/
Asian Development Bank. (2023). Asian Development Outlook 2023: Resilience in a time of uncertainty. Retrieved from https://www.adb.org/publications/asian-development-outlook-2023
Australian Securities and Investments Commission. (2023). Digital engagement in financial services: Investor participation trends 2019-2023. Retrieved from https://asic.gov.au/
Australian Securities Exchange. (2021). CHESS replacement: New scope and implementation plan. Retrieved from https://www.asx.com.au/
Bank for International Settlements. (2021). Central bank digital currencies: System design and interoperability. Retrieved from https://www.bis.org/
Brazilian Securities Commission. (2022). Blockchain applications in Brazilian capital markets. Retrieved from https://www.gov.br/cvm/
Capital Markets Authority Kenya. (2022). Annual report 2022. Retrieved from https://www.cma.or.ke/index.php?option=com_phocadownload&view=category&id=90
Capital Markets Authority Kenya. (2023). Capital markets statistical bulletin Q4 2023. Retrieved from https://www.cma.or.ke/
Capital Markets Authority Kenya. (2024). Market performance report 2024. Retrieved from https://www.cma.or.ke/
Central Bank of Kenya. (2022). Blockchain and distributed ledger technology: Potential applications in Kenya. Retrieved from https://www.centralbank.go.ke/
Central Bank of Kenya. (2023). FinAccess household survey 2021. Retrieved from https://www.centralbank.go.ke/
CFA Institute. (2023). Millennial and Gen Z investors: Changing landscape of retail participation. Retrieved from https://www.cfainstitute.org/
Communications Authority of Kenya. (2023). Fourth quarter sector statistics report for the financial year 2022/2023. Retrieved from https://www.ca.go.ke/
County Government of Mombasa. (2023). Mombasa County integrated development plan 2023-2027. Retrieved from https://mombasa.go.ke/
Datareportal. (2024). Digital 2024: Kenya. Retrieved from https://datareportal.com/reports/digital-2024-kenya
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319-340. https://doi.org/10.2307/249008
Davis, F. D., Bagozzi, R. P., & Warshaw, P. R. (1989). User acceptance of computer technology: A comparison of two theoretical models. Management Science, 35(8), 982-1003. https://doi.org/10.1287/mnsc.35.8.982
Deloitte. (2023). Digital banking maturity 2023: Finding sustainable growth in uncertainty. Retrieved from https://www2.deloitte.com/
Depository Trust & Clearing Corporation. (2022). Project Whitney: Accelerating digital asset settlement. Retrieved from https://www.dtcc.com/
European Securities and Markets Authority. (2022). Report on distributed ledger technology in EU securities markets. Retrieved from https://www.esma.europa.eu/
Fincham, J. E. (2008). Response rates and responsiveness for surveys, standards, and the Journal. American Journal of Pharmaceutical Education, 72(2), 43. https://doi.org/10.5688/aj720243
Financial Action Task Force. (2020). Guidance on digital identity. Retrieved from https://www.fatf-gafi.org/
Financial Conduct Authority. (2023). Financial lives 2022 survey: Digital engagement and investment trends. Retrieved from https://www.fca.org.uk/
Financial Sector Deepening Kenya. (2023). FinAccess business 2023: Micro, small and medium enterprises survey. Retrieved from https://fsdkenya.org/
Financial Times. (2023). The rise of finfluencers: Social media's impact on investment decisions. Retrieved from https://www.ft.com/
Ghana Stock Exchange. (2023). Annual market report 2023. Retrieved from https://gse.com.gh/
GSMA Intelligence. (2023). The mobile economy: Sub-Saharan Africa 2023. Retrieved from https://www.gsma.com/mobileeconomy/
International Monetary Fund. (2022). The crypto ecosystem and financial stability challenges. Retrieved from https://www.imf.org/
International Monetary Fund. (2023). Global financial stability report: Safeguarding financial stability amid high inflation and geopolitical risks. Retrieved from https://www.imf.org/
International Organization of Securities Commissions. (2023). IOSCO retail market conduct report. Retrieved from https://www.iosco.org/
Johannesburg Stock Exchange. (2023). Market statistics 2023. Retrieved from https://www.jse.co.za/
Kenya National Bureau of Statistics. (2020). 2019 Kenya population and housing census: Volume I - Population by county and sub-county. Retrieved from https://www.knbs.or.ke/
Marketing Society of Kenya. (2023). Marketing expenditure survey 2023: Financial services sector. Retrieved from https://www.marketingsociety.co.ke/
McKinsey & Company. (2023). The value of getting personalization right—or wrong—is multiplying. Retrieved from https://www.mckinsey.com/
Monetary Authority of Singapore. (2022). Singapore National Digital Identity: Implementation and outcomes. Retrieved from https://www.mas.gov.sg/
Nairobi Securities Exchange. (2024). NSE market statistics December 2023. Retrieved from https://www.nse.co.ke/
National Stock Exchange of India. (2022). Blockchain in capital markets: NSE initiatives. Retrieved from https://www.nseindia.com/
Ndung'u, N., & Kavinda, L. (2021). Strategic management practices and performance of three star hotels in Nairobi City County, Kenya. International Academic Journal of Human Resource and Business Administration, 3(7), 590-604. Retrieved from https://iajournals.org/
Nigerian Stock Exchange. (2022). 2022 market report and statistics. Retrieved from https://ngxgroup.com/
Organisation for Economic Co-operation and Development. (2023). OECD/INFE toolkit for measuring financial literacy and financial inclusion 2023. Retrieved from https://www.oecd.org/
Social Media Trends Kenya. (2023). Kenya social media landscape report 2023. Retrieved from https://www.socialmediatrends.co.ke/
Standard & Poor's. (2023). S&P Global FinLit Survey. Retrieved from https://gflec.org/initiatives/sp-global-finlit-survey/
Statista. (2024). Digital advertising spending in the financial services industry worldwide from 2021 to 2027. Retrieved from https://www.statista.com/
United Nations Conference on Trade and Development. (2022). World investment report 2022: International tax reforms and sustainable investment. Retrieved from https://unctad.org/
U.S. Securities and Exchange Commission. (2023). Study on investment advisers and broker-dealers. Retrieved from https://www.sec.gov/
Venkatesh, V. (2000). Determinants of perceived ease of use: Integrating control, intrinsic motivation, and emotion into the technology acceptance model. Information Systems Research, 11(4), 342-365. https://doi.org/10.1287/isre.11.4.342.11872
Venkatesh, V., & Bala, H. (2008). Technology acceptance model 3 and a research agenda on interventions. Decision Sciences, 39(2), 273-315. https://doi.org/10.1111/j.1540-5915.2008.00192.x
Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the technology acceptance model: Four longitudinal field studies. Management Science, 46(2), 186-204. https://doi.org/10.1287/mnsc.46.2.186.11926
World Bank. (2021). Blockchain and distributed ledger technology. Retrieved from https://www.worldbank.org/
World Bank. (2023). Financial inclusion: Overview. Retrieved from https://www.worldbank.org/en/topic/financialinclusion/overview
World Economic Forum. (2020). Inclusive deployment of blockchain for supply chains. Retrieved from https://www.weforum.org/
World Federation of Exchanges. (2024). 2023 WFE market highlights. Retrieved from https://www.world-exchanges.org/
Yamane, T. (1967). Statistics: An introductory analysis (2nd ed.). New York: Harper and Row.
