Impacts of Digital Banking on Bank Performance and Its Determinants: Empirical Evidence from Nekemte District Banks

Authors

  • Elfenesh Muleta Wollega University
  • Damu Feyera Wollega University

DOI:

https://doi.org/10.20372/star.v13i1.03

Keywords:

Digital banking adoption, Logistic regression, ICT literacy, Nekemte Districts

Abstract

Using data collected from banks in the Nekemte district, this study aims to determine how digital banking has affected bank performance and what factors have contributed to this effect. In addition to conducting focus groups with prospective experts and key informant interviews with district bank managers, we surveyed 346 sample consumers of the area's banks to compile the data used in this study. The logistic regression method was used to estimate the outcomes, taking into consideration the characteristics of the data. According to the results, the research area's digital banking adoption is heavily impacted by factors such as consumer education, availability of energy, customer awareness, internet connectivity, ICT literacy, and the quality of digital banking services. The study also shows that banks perform better when they use digital banking. Some of the most common forms of electronic banking in this area are ATMs, mobile banking, online banking, and POS systems. These findings have important policy implications, suggesting that financial institutions should make raising public knowledge of digital banking a top priority. Digital banking can be improved, its impact on bank performance can be amplified, and its adoption in the district can be accelerated through investments in basic infrastructure and human capital.

Downloads

Download data is not yet available.

Metrics

Metrics Loading ...

Author Biographies

Elfenesh Muleta, Wollega University

Department of Economics, College of Business and Economics, Wollega University, Ethiopia

Damu Feyera, Wollega University

Department of Banking and Finance, College of Business and economics, Wollega University, Ethiopia

References

Aliyu, A. A., Bin, R., & Tasmin, H. J. (2012). The Impact of Information and Communication Technology on Banks ‟ Performance and Customer Service Delivery in the Banking Industry. Int. J Latest Trends Fin. Eco. Sc. 80, 2(1), 80–90.

Bansal, N., Pareek, N., & Nigam, A. (2022). The impact of customer ’ s training of digital banking services on its acceptability by customers ’ in India The impact of customer ’ s training of digital banking services on its acceptability by customers ’ in India Nitin Bansal and Nishtha Pareek. International Journal of Business and Globalisation, 30, 207–231.

Depoju, S. A., & Alhassan, M. (2014). Journal of Internet Banking and Commerce. The Journal of Internet Banking and Commerce, 15, 1–11.

Ebobo, C. (2023). Impact of Automated Teller Machines ( Atm ) Frauds On Banks ’ Customers In Nigeria. Fulafia, Journals of Social Sciences, 3, 1–13.

Fetu, A. (2019). Opportunity and Challenges of Electronic-Banking System in Commercial Bank of Ethiopia (A Case Study on Gurage Zone).

Glavee-geo, R., & Shaikh, A. A. (2017). Mobile banking services adoption in Pakistan : are there gender differences ? International Journal of Bank Marketing, 35(7), 1090–1114.

Hadid, K. I., Soon, N. K., Abusalah, A., & Amreeghah, E. (2020). The Effect of Digital Banking Service Quality on Customer Satisfaction : A Case Study on the Malaysian Banks. Asian Journal of Applied Science and Technology, 4(1), 6–29.

Kabakus, A. K. (2023). The effect of digital literacy on technology acceptance : An evaluation on administrative staff in higher education. Journal of Information Science, 1–12. https://doi.org/10.1177/01655515231160028

Raviadaran, H. (2019). Impact of Service Quality Dimensions on Internet Banking Adoption , Satisfaction and Patronage. International Journal of Management, Accounting and Economics, 6(10), 709–730.

Rivai, A. (2021). The Effect Of Digital Banking Technology On Bank Efficiency And Employee Demand In Indonesian Banking Industry. Nat. Volatiles & Essent. Oils, 8(6), 1029–1048.

Sahut, J. (2021). Advantages of E-banking. Journal of Internet Banking and Commerce An, 26(5), 2021.

Shanmugapriya, M. B., & Lakshmirani, D. A. S. (2021). Study on Customer Awareness towards Digital Banking Services. PalArch’s Journal of Archaeology of Egypt / Egyptology, 18(1), 4599–4604.

Simon, V. T. (2016). Effect of electronic banking on customer satisfaction in selected commercial banks , Kenya. International Academic Journal of Human Resource and Business Administration, 2(2), 41–63.

Downloads

Published

30.03.2024

How to Cite

Muleta, E., & Feyera, D. (2024). Impacts of Digital Banking on Bank Performance and Its Determinants: Empirical Evidence from Nekemte District Banks. Journal of Science, Technology and Arts Research, 13(1), 28–45. https://doi.org/10.20372/star.v13i1.03

Issue

Section

Original Research

Categories

Received 2024-02-04
Accepted 2024-03-12
Published 2024-03-30

Plaudit