The contribution of modern technology to the financial performance of commercial banks.

Abstract

The study sought to determine the contribution of modern banking technology to the financial performance of commercial banks. With a case study of Centenary Bank Masaka Branch, the research Objective was to investigate the effect of technological innovation on the financial performance of commercial banks. Specific research objectives. 1. To assess the effect from the progress from the Traditional banking systems to modern ICT systems. 2. To assess the cost benefits associated with acquiring modern banking technology in commercial banks. 3. To recognize problems associated with acquiring modern technology in commercial banks. The study was based on Technology acceptance model (TAM), diffusion of innovations theory and resource based theory. The study population included 59 employees and clients of Centenary bank licensed by Central Bank of Uganda. Briefly the research conducted discovered a positive relationship between usage of modern technology in the banks and financial performance. Among the benefits of modern ICT included better financial performance due to timely information produced, increased business capacity and improved efficiency in terms of service delivery despite the high costs involved in maintenance. The short coming of ICT were also given and ways how to overcome these shortcomings and these included: high maintenance costs, virus attacks, hardware purchasing costs, need to train employees. These were solved by employing ICT officers, ICT literate employees, updating anti viruses. Findings were summarized in chapter five and recommendations given to centenary bank and these included v 1. Centenary should develop their electronic facilities to cater for the elderly and disabled such as lowering the height of the ATM screens to make the service available to people in wheel chairs. 2. Customer feedback is an established concept of strategic planning.