Electronic banking and financial performance of commercial banks in Uganda.

Abstract

The study examined the relationship between electronic banking and the financial performance of commercial banks in Uganda with Post Bank Uganda Limited as a case study. The study was guided by the following objectives: to establish the relationship between e-funds transfer and the financial performance of PBUL; to examine the relationship between telephone banking and the financial performance of PBUL and to assess the relationship between internet banking and the financial performance of PBUL. A case study research design was used. The study predominantly employed a quantitative approach but also used a qualitative approach. The study population consisted of 58 participants. A sample size of 49 respondents was selected using simple and purposive sampling techniques. Quantitative data analysis mainly consisted of descriptive statistics (means and standard deviations) and inferential statistics (Spearman correlation, coefficient of determination and regression). Content analysis was used to analyze qualitative data. Findings revealed that E-funds transfer banking had a positive influence (68.6%) on financial performance. Telephone banking had a positive influence (66.4%) on financial performance. Internet banking had a positive influence on financial performance of post bank Uganda limited. It was concluded that electronic banking positively influenced the financial performance of PBUL. Thus, it was recommended that for purposes of promoting e-funds towards finance performance, trust building among the customers should be a major concern for PBUL while improving the usefulness of electronic banking. In courtesy to achieve more with telephone banking on financial performance, it is imperative that PBUL ensure security and privacy are in place to monitor and evaluate the usage of the implemented technologies. Lastly, on internet banking and the financial performance of PBUL, the bank need to make sure that awareness about internet banking is created in the public through massive advertisement on radios, televisions and newspapers.