Effect of Information Communication Technology Products on Financial Performance: Empirical Analysis of Financial Institutions in Rwanda
- October 10, 2021
- Posted by: rsispostadmin
- Categories: IJRSI, Social Science
International Journal of Research and Scientific Innovation (IJRSI) | Volume VIII, Issue IX, September 2021 | ISSN 2321–2705
Kayitera Jean Felix 1, Thomas K Tarus2
1Masters student, Graduate School. University of Kigali-Rwanda
2Lecturer, Graduate School. University of Kigali-Rwanda
Abstract: Information communication technology has in particular brought a complete paradigm shift on the bank’s financial performance in the banking industry. The changing dynamics of the banking sector is forcing the financial sectors to reengineer to meet the challenges associated with bank consolidation, rising operational costs, outsourcing, portfolio investment, payments and settlement systems. The purpose of the study was to analyze the effect of information communication technology products on financial performance. The study was anchored and guided on Innovation Diffusion Theory. The study adopted descriptive research design while the sample comprized 92 respondents. The results revealed that mobile banking and internet banking had a positive and significant effect on financial performance (β = 0.954, p<0.05; β = 0.491, p<0.05). Thus, the study concluded that mobile banking and internet banking positively and significantly affects financial performance. The study recommends that policy makers should consider mobile banking in their formulation of policies because of the technological developments and the expected switch from physical branch networks to technologically supported banking services. Commercial banks also need to emphasize the use of internet banking as this will enhance banks growth and customers saving on time.
Keywords: Financial Performance, Information Communication Technology, Innovation and Diffusion Theory, Internet Banking and Mobile Banking
I.INTRODUCTION
Due to technical advancements and the introduction of information and communication technology as a competitive advantage for every corporation, today’s business environment is incredibly dynamic and intense. In the last few decades, application of information technology in business strategies has become at the very heart of the competitive process. As economy moves from lower to higher stages of development, business processes are shifting from simpler to modern and complex techniques of production. Commercial banks across the world have always embraced business process reengineering as a strategy to change on their business processes and procedures hence improve on their financial performance (Agbolade, 2011). The changing dynamics of the banking sector is forcing the financial sectors to reengineer to meet the challenges associated with bank consolidation, rising operational costs, outsourcing, portfolio investment, payments and settlement systems. Information and communication
