Online Banking and the Performance of Financial Institutions: Case Study of Finance Trust Bank Ltd Kampala
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Date
2023-09-19
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Abstract
The study investigated online banking and the performance of financial institutions; case study of Finance Trust Bank Ltd Kampala. The study was guided by specific objectives which included to; find out the forms of online-banking used in financial institutions, identify the risks associated with Online-Banking that affect performance of financial institutions and determine the relationship between online-banking and the performance of financial institutions. This research adopted a descriptive research design involving both quantitative and qualitative research approaches. The forms of online-banking used in financial institutions were; electronic card, mobile banking, E-payments, electronic funds transfer and internet banking. The risks associated with Online-Banking that affect performance of financial institutions included; operational risk of online-banking is the central of system availability and security to the dependability, online-banking carries legal risks for both the banks and customers, reputational risk arising from negative public opinion which affects operational smooth implementation of online-banking, security risks can be amplified and may result in a loss of confidence in electronic delivery channels and fraud within the banking system is associated with online-banking. The relationship between online-banking and the performance of financial institutions; there was a significant positive association (r=.474, p<0.01) between online banking and performance of financial institutions. The implication of the results is that the use of online banking is positively related to the performance of financial institutions and therefore using it much more would increase the performance of financial institutions. In conclusion among the online banking platforms used in the financial institution include electronic card and mobile banking which scored high. These forms offer great customer satisfaction to both local and modern customers. There were also various risks associated with online-banking such as operational risk, legal risks, reputational risk and security risks. There is a significant relationship between online-banking on performance. The positive relationship observed between online-banking and performance is important to the practice of financial institutions. The study recommended to encourage financial institutions to sensitize their customers on the online-banking products, promote online-banking workshops and training to their customers to make them user-friendly. Financial institutions which have not adopted some online-banking tools should introduce them if their performance is to improve. Further study on the technological challenges and scaling of online banking in rural areas of Uganda, marketing strategies and adoption of online-banking services among customers in Uganda.
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This is a dissertation