An Evaluation of the Effect of Digital Banking Channels on the Performance of Commercial Banks in Zambia

Abstract

Customers who use digital banking can conduct transactions through a variety of secure digital channels while the bank handles data security, related risk reduction, and regulatory matters. This is accomplished by combining the newest digital technologies online and mobile banking services such as analytics, social media, creative payment methods, and mobile technology and exceeding user expectations for convenience and experience. This study aimed at evaluating the effect of digital banking channels on the performance of commercial banks with prime focus on First National Bank Zambia. A quantitative research design was used, and data was collected from a sample of 279 employees with the aid of purposive sampling technique. Multiple hierarchical regression and correlation statistics were used to analyse the data collected through the statistical package for social sciences (SPSS). The correlation and regression analysis result showed that Mobile Banking, Internet card banking, electronic banking and telephone banking have a positive correlation with commercial bank performance in terms of profitability, performance efficiency and effectiveness. The results from the regression analysis revealed that only Internet Banking (β = 0.61, p value = 0.000) and electronic card banking (β = 0.36, p value = 0.000) had a significant effect on commercial bank performance and the analysis indicates that approximately 59.1% of the variance of the business performance can be accounted for by the linear combination of internet banking and Electronic Banking.