Internet banking is used as a marketing tool to attract and retain customers, expand market reach, and improve service quality, the extent and the intensity of banking products and services offered online is likely to have a significant impact on the bank's overall performance.
Specifically, the study empirically examined impact of internet banking, bank liquidity, capital adequacy, bank size, cost efficiency, deposit to asset ratio
The correlation table shows that the correlation value between internet banking and financial performance has a correlation value of 0.156. This means that any increase in internet banking usage will increase the financial performance of banks going public with the assumption that the control variable used is constant.
The main objective of this study was to examine the impact of internet banking on financial performance, empirical evidence of commercial banks of Ethiopia.
The positive impact of E-Banking on financial performance is due to operational cost efficiency. E-Banking causes banks to reduce the number of employees, because the role of employees such as tellers and customer service has been replaced by E-Banking, which allows customers to do transaction without them.
Critical Focus Areas For Commercial Banks
Regardless of your bank’s size, commercial banks must understand how the proliferation of digital banking services has altered the market. Whether for the sake of better understanding competitors or ensuring that your organization is providing digital banking essentials, these critical focus areas will help define your service strategy:
Digital Banking Services
Commercial banks provide basic banking services and products to the general public, individual consumers and small to mid-sized businesses alike. Providing digital banking service simply means that the deployment of banking services and products (such as opening new bank accounts, creating checking and savings accounts, transfers, etc.) are provide.
Does innovation in digital finance affect bank performance?
Four, innovation in digital finance can have long-term positive effects for banking performance
Scott, Van Reenen, and Zachariadis (2017) examine the impact on bank performance of the adoption of SWIFT, a network-based technological infrastructure and set of standards for worldwide interbank telecommunication
Does Internet banking affect financial performance of Ethiopia banks?
However, internet banking and size of banks has positive and negative respectively but statistically insignificant relationship with financial performance of banks in Ethiopia
Therefore, in the case of Ethiopia banks, internet banking and bank size hasnot considered as a factor that impact on financial performance of Ethiopia banks
How Internet banking has influenced bank performance?
In the context of banking, the invention of Internet with its advanced technology has transformed the way the banks design, communicate and deliver their products and services to their consumers
In other words, internet banking has remarkably influenced the bank performance (Accenture 2015 )
Offering Personalized Financial Services Through Digital Channels
The prevalence of digital baking has led to an overall shift in how customers interact with branch offices. For prior generations, brick and mortar branch offices were often the primary touchpoint for commercialized banks, but modern customers are likely to prefer that most banking services are offered through internet and mobile device touchpoints.
What is bank performance?
Besides, the concept bank performance could be defined as ‘the adoption of a set of indicators that could work as indicative of the bank’s current status and the extent of its ability to achieve the desired objective
Moreover, (Hajer and Anis 2016) refer to the term ‘Bank performance’ as ‘the capacity to generate sustainable profitability
