The Effect of E-Banking on the Performance of Financial Institutions Case Study; Centenary Bank

Abstract

The study established the effect of e-banking on the performance of financial institutions a case study of centenary bank. It was guided by three research objectives thus; to examine the effect of mobile phone banking on performance of Centenary bank, to examine the effect of ATM on performance of Centenary bank, to examine the effect of PC banking on the performance of Centenary bank. The study was due to the fact that most of the products and services offered by internet banking are not accessible in most of the parts of Uganda especially in the typical rural areas where access to electricity or alternative sources of energy is a problem.

The research adopted a case study research design based and focused on Centenary Bank to obtain the in-depth understanding of the effect of e-banking on performance of financial institutions. The population of the study was 86 and the sample size of 70 based on Krejcie and Morgan table, though the actual participants were 66. The researcher used self-administered questionnaires as the instrument for data collection. The study incorporated both Qualitative and Quantitative data analysis types. Data was collected from both primary with the help of questionnaires designed using Likert scales and secondary data got from textbooks, internet, journals and newspaper articles.

The findings of the study revealed that there is a positive moderate relationship between mobile phone banking on performance of financial institutions represented by r= 0. 650** p <0.01. The study also revealed that there is a positive high relationship between ATM and performance of financial institutions as represented by r = 0. 715** p <0.01. It further revealed that there is a positive high relationship between PC banking and performance of financial institutions represented by r = 0.903** p <0.01. Based on the findings above, the study concluded that electronic banking also has a positive and strong impact on the overall banking performance. Withdrawal can be made anywhere at any time (using any bank ATM, mobile phones, personal computers). The study therefore recommended that Centenary bank must be focused in terms of their needs and using the right technology to achieve goals and objectives, rather, than acquiring technology of internet banking for having sake or because other banks have it.

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