Digital Banking Technologies and Financial Performance of Commercial Banks in Kasese District
DOI:
https://doi.org/10.47672/jsm.3012Abstract
Purpose: Governments across the globe working through their central banks have put in place several measures to improve financial performance of commercial banks, however the financial performance of commercial banks has reportedly been unstable. This study was conducted to examine the contribution of digital banking technologies on financial performance of commercial banks in Kasese district.
Methodology: Pragmatic paradigm guided the choice of data collection techniques according to mixed-methods principles. Data was collected from 108 respondents who were bank staff and bank customers using questionnaires and interviews. Upon confirmation of normality of data, Pearson correlation technique was used to analyse data.
Findings: The results confirmed a positive and statistically significant association (r = .749, p < .01) between digital banking technologies and financial outcomes of banks.
Recommendations: – This study contribution is visible in many ways, for example; 1) depicts the significance of digital banking technologies on financial performance of commercial banks, 2) communicates to the government to invest in digital business infrastructure through the national bank of Uganda, since this has effect in terms of enabling the citizens to access and use financial products to change their socio-economic status, 3) reminds commercial bank managers to allocate resources in establishment of bank-client digital service platforms that make it possible for customers to freely access and use their financial services. Context-specific effect of digital banking technologies on financial performance was examined on commercial banks in Kasese district. The study looked at digital banking technologies in terms of mobile banking, ATM services and agency banking while financial performance was conceptualised as ROE, net profit and ROA different from previous studies whose interest was in other regions and context.
Downloads
References
Achugamonu, U. B., Adetiloye, K. A., Adegbite, E. O., Babajide, A. A., & Akintol (2020). Financial exclusion of bankable adults: Implication on financial inclusive growth among twenty-seven SSA countries. Cogent Social Sciences, 6(1), 1730046. https://doi.org/10. 1080/23311886.2020.1730046
Adeyemi, O., & Bello, A. (2024). Digital Banking Technology and the Operational Efficiency of Banks in Nigeria. Journal of Banking and Financial Technology, 12(3), 204–219.
Aheebwa, R.C., Benon Muhumuza,,B., Kansiime, N.K., Crispus Tashobya,C., Byamukama, V., Nimusima, P., (2025). Tax Incentives and Financial performance of Small and Medium Sized Enterprises in Kabale District, Uganda. International Journal of Entrepreneurship; Vol.8, Issue 1, pp 38-52,
Akugizibwe, M., Nimusima,P., Muhangi, B.W., Kisembo, R., (2025). Digital Financial Payment systems and Financial Inclusion: A study on Youth in the Rwenzori Region, Western Uganda. American Journal of Finance, Vol. 11, Issue 3, pp 1 – 17; ttps://doi.org/10.47672/ajf.2816
Ahiase, G., Andriana, D., Agbemava, E., & Adonai, B. (2024). Macroeconomic cyclical indicators and bank non-performing loans: does country governance matter in African countries? Emerald.Com, 51(1), 62–80. https://doi.org/10.1108/IJSE-11-2022-0729/FULL/HTML
Amanyire, A., Nimusima,P., Rwambale,K,M., Mbabazi,M.G., Muhumuza,G., (2024).
Managerial competences and Financial Performance: A Study on NGOs in Central Division- Fort Portal City; International Journal of Economics, Finance and Management Sciences, Vol. 12, No. 3, pp. 185-195 https://doi.org/10.11648/j.ijefm.20241203.15
Angee, G., Kule,J.B.M., Rwakihembo, J., Nimusima, P., Maghanga,M., & Niwaha,M., (2026). Operational Efficiency and Financial Performance of Agro Processing Firms in Acholi Sub-Region. International Journal of Entrepreneurship, Vol.9, Issue 1, pp 18- 34, https://doi.org/10.47672/ije.2945
Ashiru, O., Balogun, G., & Paseda, O. (2023). Financial innovation and bank financial performance: Evidence from Nigerian deposit money banks. Research in Globalization, 6, 100120. https://doi.org/10.1016/J.RESGLO.2023.10012
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. Chogo, J. (2020). Effect of digital banking on financial performance of commercial banks in Kenya. International Journal of Economics, Commerce and Management, 8(1), 56–69.
Churchill, S. A., & Marisetty, V. B. (2020). Financial inclusion and poverty: A tale of forty-five thousand households. Applied Economics, 52(16), 1777–1788. https://doi.org/10.1080/ 00036846.2019.1678732
Creswell, J. W. (2019). Research Design: Qualitative, Quantitative and Mixed Methods Approaches (4th ed.). Thousand Oaks, CA: Sage. English Language Teaching, 12(5), 40. https://doi.org/10.5539/elt.v12n5p40
Davis, F. D., Bagozzi, R. P. & Warshaw, P. R. (1989). User Acceptance of Computer Technology: A Comparison of Two. Management Science, 35(8).
Dimbia, A. A., & Wanjohi, F. M. (2023). Agency banking and financial inclusion; a case of Kenya commercial banks in Siaya County. The Strategic Journal of Business & Change Management, 10(1), 219–238.
Durak, Ç., & Yazici, S. (2024). Developing A Financial Technology (FinTech) Adoption Scale: A Validity and Reliability Study. Research in International Business and Finance, 70(1), 102344.
Fadikpe, A. A. A., Danquah, R., Aidoo, M., Chomen, D. A., Yankey, R., & Dongmei, X. (2022).
Linkages between social and financial performance: Evidence from Sub-Saharan Africa microfinance institutions. Plos one, 17(3), e0261326.
Fajarini, M., & Rahayu, S. (2020). Knowledge transfer through mobile application needs questionnaire: Validity and reliability. Indonesian Nursing Journal of Education and Clinic (INJEC), 5(2), 135–140. doi.org
Gentry, R. J., & Shen, W. (2010). The relationship between accounting and market measures of firm financial performance: How strong is it? Journal of Managerial Issues, 22(4), 514-530.
Jamali, A. A., Khoumbhati, K. U. R., Shah, A. A., & Bhutto, A. (2023). Validating of survey instrument in the perspective of computer technology-based learning. Asian Bulletin of Big Data Management, 3(2), 245-255.
Jeremiah, F. E., and Ejedegba, R. U. (2025). Electronic Banking and Banking Sector Performance in Nigeria. International Journal of Advanced Economics and Sustainable Development, 6(1), 1–13. DOI: https://doi.org/10.5281/zenodo.17002786
Huang, Y., & Ferreira, F. (2020). The application of Signal Detection Theory to acceptability judgments. Frontiers in Psychology, 11, Article 73.
Kaleem, A., & Ahmad, S. (2008). Bankers' perceptions of electronic banking in Pakistan. Journal of Internet Banking and Commerce, 13(1), 1–16.
Kayser, S. M. S. (2025). Digital banking efficiency: Analyzing the impact of paperless systems on EBL's financial performance (Retail and SME Banking Division of the Jashim Uddin Road Branch). Accessed online on 04/09/2026; at 00:46am; http://hdl.handle.net/10361/26857
Kyambade, M., Kagere, R., Namatovu, A., Ssentumbwe, A. M., Tushabe, M., & Oyella, S. (2024). Technological innovation and commercial banks’ financial performance: A mediation analysis of risk management practices. SEISENSE Business Review, 4(1), 98–117.
Krishnan, M. (2013). Alternate banking channels for customer convenience. International Journal of Scientific Research, 2(2), 2277–8179.
Marcial, D. E., & Launer, M. A. (2021). Test-retest reliability and internal consistency of the survey questionnaire on digital trust in the workplace. Solid State Technology, 64(2), 4369–4381
Mawejje, J., & Odhiambo, N. M. (2021). Uganda’s fiscal policy reforms: What have we learned? Wiley Online Library, 41(2), 89–107. https://doi.org/10.1111/PBAF.12283
Mbabazi,G.M., Kamukama,N., Kijjambu,F.N., Rwakihembo, J., & Nimusima, P., (2026). Dynamic Capabilities and Financial Performance: A study on Microfinance Institutions in Uganda. American Journal of Finance, Vol. 12, Issue 1, pp 43 - 63, https://doi.org/10.47672/ajf.2930
Mbama, C. I., and Ezepue, P. O. (2018). Digital banking, customer experience and bank financial performance: UK bank managers' perceptions. International Journal of Bank Marketing, 36(2), 230–255.
Munyambonera, E. F. (2015). Determinants of commercial banks’ profitability in Uganda: Panel evidence. Economic Policy Research Centre (EPRC).
Murphy, G. B., Trailer, J. W., & Hill, R. C. (1996). Measuring performance in entrepreneurship research. Journal of Business Research, 36(1), 15-23.
Mushtaq,R., & Bruneau,C. (2019). Microfinance, financial inclusion and ICT: Implications for
poverty and inequality. Technology in Society, 59, Article 101154
Mutiara, A.B., (2026). Architecting Digital Transformation in Banking: Insights from Mobile Application Development and Technology Adoption in the ASEAN-Five. Accessed online on 03/09/2026 at 23:54pm; https://dl.acm.org/doi/epdf/10.1145/3789037.3789053
Ombongi, B. (2021). The effect of agency and mobile banking on liquidity of commercial banks in Kenya. https://erepository.uonbi.ac.ke/handle/11295/161103
Ouma, S.O., & Fredrick, W.S. (2020). Adoption of Digital Banking Technology and Financial Performance of Commercial Banks in Kenya. International Journal of Current Aspects in Finance Banking and Accounting, 2(1):42-50; DOI: 10.35942/ijcfa.v2i1.108
Pawar, N. (2020). Type of Research and Type Research Design. Social Research Methodology, 8(1), 46–57. https://www.kdpublications.in
Poudel, H.K., Ranabhat, D., Sapkota, P., & Ranabhat,M., (2023). Adoption of Digital Payment System among the Youths in Pokhara Metropolitan City. Interdisciplinary Journal of Innovation in Nepalese Academia, Volume 2, Issue 2
Richard, P. J., Devinney, T. M., Yip, G. S., & Johnson, G. (2009). Measuring organizational performance: Towards methodological best practice. Journal of Management, 35(3), 718-804
Roosmawarni, A., Fatihudin, D., & Mauliddah, N. (2025). Digital banking efficiency: analyzing the impact of paperless systems on EBL’s financial performance. Jurnal Analisis Bisnis Ekonomi, 20(2), 124–136. https://doi.org/10.31603/bisnisekonomi.v20i2.7835
Rwakasoro, P., Nimusima, P., Niwaha, M., Gladys, A., Erem, E., Kisu Yahaya, K., & Muhumuza ,G. (2025). Empirical Study on Strategic Management Practices and Financial Performance of SACCOs in a Local Government Context-Uganda. Science Journal of Business and Management, Vol. 13, No. 2, pp. 58-69 https://doi.org/10.11648/j.sjbm.20251302.11
Rwakihembo, J, Dr. Aryatwijuka,W, Kalinda, P. & Nimusima, P., (2023). Corporate Board Leadership Structure and Financial Performance: The Stewardship And Agency Theoretical Perspectives Of Private Limited Firms In Uganda. American Journal of Finance, Vol. 8, Issue 1, pp 31 - 45; https://ajpojournals.org/journals/index.php/AJF/article/view/1474
Safdari, R., Yu, P., Khenarinezhad, S., Savadkoohi, E. G., Javanmard, Z., Yousefi, A., &
Barzegari, S. (2022). Validity and reliability of the Persian version of the Patient readiness to engage in health information technology (PRE-HIT) instrument -- [BMC Primary Care Primary Care, 23(1), Article 50. doi.org
Sahu, T. N., Agarwala, V., & Maity, S. (2024). Effectiveness of microcredit in employment generation and livelihood transformation of tribal women entrepreneurs: evidence from PMMY. Journal of Small Business & Entrepreneurship, 36(1), 53-74.
Saliba, C., Farmanesh, P., & Athari, S. A. (2021). Impact of non-performing loans on bank’s profitability: Empirical evidence from commercial banks in Kosovo. Springer, 9(1). https://doi.org/10.1186/s40854-023-00494-2
Sarker, M. A., et al. (2025). Digital banking's effect on the banking industry & system transformation. Journal of Digital Innovation & Financial Technology, 4(2), 112–128.
Sekaran, U., & Bougie, R. (2016). Business Research Methods: A skill-building approach. In Wiley. https://doi.org/http://as.wiley.com/WileyCDA/WileyTitle/productCd-111994225X.html#
Shannon-Baker, Peggy. (2015). Making Paradigms Meaningful in Mixed Methods Research.
Journal of Mixed Methods Research, 10(4), 319–334. https://doi.org/10.1177/1558689815575861
Sharma, A., Kaur, R., & Gupta, R. (2020). Understanding the factors affecting user acceptance of digital banking in developing countries: A systematic literature review. International Journal of Bank Marketing, 38(4), 817-834.
Shrestha, N. (2021). Factor analysis as a tool for survey analysis. American Journal of Applied Mathematics and Statistics, 9(1), 4–11. https://doi.org/10.12691/ajams-9-1-2
Siddik, M.N.A., & Kabiraj, S., (2020). Digital finance for financial inclusion and inclusive
growth. Digital transformation in business and society, Springer, pp. 155-168
Silva, R., & Santos, M. (2024). Impacts of digitization on operational efficiency in the banking
sector: Thematic analysis and research agenda proposal. International Journal of Bank Marketing, 42(4), 589–612.
Singer, D., Demirguc-Kunt, A., Klapper, L., Singer, D.., (2017). Financial
Inclusion and Inclusive Growth: A Review of Recent Empirical Evidence. Policy Research
Working Paper;No. 8040. © World Bank, Washington,
DC. http://hdl.handle.net/10986/26479 License: CC BY 3.0 IGO.”
Senou,M.M., Ouattara,W., Acclassato Houensou, D., (2019). Financial inclusion dynamics in
WAEMU: Was digital technology the missing piece?
Cogent Economics & Finance, 7 (1), Article 1665432
Tabachnick, B. G., & Fidell, L. S. (2019). Using Multivariate Statistics. 233–250.
https://doi.org/10.4324/9781315181158-21
Theiri, S., (2024). Digitization effects on banks’ financial performance: the case of an African country. Emerald.Com. https://www.emerald.com/cr/article-abstract/34/1/144/1219239
Uganda Bankers’ Association. (2023). Banking Sector Report for the Year 2023. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://ugandabankers.org/Uganda’s%20Banking%20Sector%20Report%20for%20the%20year%202023%20and%20June%202024%20.pf.
Venkatraman, N., & Ramanujam, V. (1986). Measurement of business performance in strategy research: A comparison of approaches. Academy of Management Review, 11(4), 801-814
World Bank. (2022). Uganda economic update: Digital transformation for inclusive growth. https://www.worldbank.org/en/country/uganda
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Ezakiel Masereka, Pereez Nimusima, Angee Gladys, Crispus Tashobya, Juuko Godfrey Ijoga, Moreen Niwaha, Victor Born Alini
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
