Digital Risk Management and Financial Performance of Mutual Funds in Kenya

Purpose: Mutual funds act as investment vehicles whose main function is Resource Mobilization and Capital Allocation. They achieve this through the concept of pooling of resources for investment purposes. However, Kenyan mutual funds report modest performance yet they’re faced with this key role. The study sought to determine the effect of integrating financial technology in risk management functions on financial performance of Kenyan mutual funds. Design/Methodology/Approach: Mixed research design combining descriptive and panel design with both primary and secondary data was utilized. Descriptive statistics and regression analysis were used guided by the pragmatic philosophy. Findings: Findings revealed a positive effect of digital risk management on performance of mutual funds. The conclusion was that financial technology integrated in risk management functions is a key enabler of fund performance in Kenya, particularly when adopted strategically and scaled effectively according to fund size. Implications/Originality/Value: Digital risk management enhances fund performance. Policy makers can be informed on best practices in fund management. The study contribute to the growing body of knowledge on financial technology adoption in emerging markets.