The effect of information technology on the performance of commercial banks in Uganda: a case study of Centenary bank, Kayabwe branch

Abstract

This study sets out to ascertain the effect of Information Technology on the performance of Commercial Banks with a case study in Centenary Bank, Kayabwe branch. It specifically looked at the effect of Mobile banking and the use of ATMs on the time managements of Bank’s clients and Bank’s productivity respectively and also to establish the effect of internet banking on sales growth of the Bank. A descriptive cross- sectional survey was used in the study; both quantitative and qualitative techniques were employed in the data collection process, analysis, presentation and discussion of findings. The data used in this study was both secondary and primary,a stratified random sampling technique was employed to 52 respondents consisting of; management, employees and customers of Centenary Bank, Kayabwe branch using self administered questionnaires, oral interviews were carried out on the four (4) management and observations made where necessary. The results of the study generally indicates that Information Technology has contributed positively to the performance of banking services in Centenary Bank, Kayabwe branch particularly ATMs being the most popularly used (98%), followed by Mobile banking (Cente-Mobile) with 76% and lastly Internet Banking (30%) which is not fully administered and popularized to most of the clients .From the findings, There are risks involved in using Mobile banking, internet banking and the use of ATMs with internet banking considered to be most risky. From the study findings, it can be concluded that Information Technology positively affect the performance of Centenary Bank, Kayabwe branch thus increasing their productivity, Bank’s sales growth, improving time management of clients and consequently leading to a more than expected performance by the Bank. Therefore for Centenary Bank, Kayabwe branch to improve their performance and remain competitive in banking sector, there is a considerable need to be innovative by adopting various IT innovations. The study also recommends increased investment in IT innovations by providing a thorough training on various banking technology usage and developing strategies in solving risks associated with each banking technology to all various stakeholders of Centenary Bank and other Banks in Uganda in order to be competitive and to improve on their performance.