Information and communications technology and its effect on banks’ performance in Uganda

Abstract

The study conducted was about ICT and its effect on the performance of banks in Uganda, a case study of Centenary Bank, Kayabwe branch was used. The specific objectives of the study included; the effect of accounting software on the performance of banks, the effect of Automated Teller Machines on the performance of banks and the effect of online banking on the performance of banks. The three specific objectives were in line with the broad objective of the study. A sample of 70 was considered, 14 of them were staff of the bank and 56 were customers who opened accounts with the bank between January 2013 and January 2015. These were approached on 24th and 25th March 2016 and they were randomly selected to give responses to the questionnaires. Both primary and secondary sources of information were used. Primary sources included the responses from the staff and customers of the branch. Secondary data was obtained from textbooks, journals, magazines and the internet. The findings indicated that the bank utilizes Equinox accounting software which enables them to update customer account information at any time provided the transaction has been entered. With this software, the bank is in position to have accurate records, issue bank statements whenever customers need them and also produce its financial statements which show its financial position over a period of time. However, findings showed that it is costly to purchase, upgrade and maintain. It is also prone to human errors, viruses and possibilities of hacking. It requires technical assistance and skilled manpower. A number of people have ATM cards and use them due to the level of convenience attached to them. They face a problem of the ATM working too slowly. Online banking at the branch is utilized by only a few customers hence the bank has to increase awareness of its electronic products to its customers so that they can get acquainted to them. In conclusion ICT has been of great importance to the bank and it has positively affected their performance through minimal turnaround time, increasing the number of customers being served in a given period of time and accurate information which is used for effective decision making at the bank