Effect of Electronic Banking on Financial Performance of Commercial Banks in Rwanda, A Case of COGEBANQUE Plc

Abstract

According to the BNR information technology was expected to minimize time, distance, and space and expense thus expanding access to affordable financial services. it was found that, electronic banking is allowing banks to change from the traditional channels associated with human assistance to digital channels that operate on self- service basis reducing operational cost and improving efficiency and financial performance. However, some of the previous researchers give contradicting information on e-baking and the financial performance of commercial banks creating a need for sufficient research to be done on this topic. The general objective of this research is to examine the effect of E-banking on financial performance of commercial banks in Rwanda. Specific objectives were to analyze the use of e-banking in COGEBANQUE PLC from 2018 to 2021; to determine the level of financial performance of COGEBANQUE PLC from 2018 to 2021 and o assess whether there is any relationship between e-banking and financial performance of COGEBANQUE PLC from 2018 to 2021; It should be noted that electronic banking plays a great role in financial performance of banks in Rwanda. Different electronic Banking System tools like ATM, ay direct, mobile phone banking, debit/visa card payment and E electronic check payment has a great impact on bank performance because they increase profitability, return on equity and loans, improves bank management quality, increase bank asset and promotes bank growth and expansion. For the case of COGEBAQUE PLC, Adjusted R squared is coefficient of determination which tells us the variation in the dependent variable due to changes in the independent variable, from the findings in the above table the value of adjusted R squared was 0.625, an indication that there was variation of 62.5% on the performance of COGEBANQUE PLC due to changes in Mobile Banking, internet banking, telephone banking, electronic card banking. This shows that 62.5% changes in performance of COGEBAQUE PLC. As conclusion E banking contributes to the performance of COGEBANQUE PLC in spite of few challenges like network failures inadequate skills and security issues possess a great threat to the confidentiality and integrity of banks information.