CONTRIBUTION OF ELECTRONIC BANKING ON THE FINANCIAL PERFORMANCE OFCOMMERCIAL BANK IN RWANDA

Abstract

This study thoroughly examines the influence of digital banking services on the performance of commercial banks in Rwanda, focusing specifically on Access Bank from 2019 to 2021. The research investigates various digital banking services such as mobile and online banking, digital payment solutions, and data-driven personalization, analyzing their impact on key financial performance metrics, including Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). Through both quantitative and qualitative analysis, the study finds a strong positive correlation between digital banking adoption and enhanced bank performance. For instance, ROA rose from 1.14% in 2021 to 2.90% in 2023, while ROE increased significantly from 7.92% to 20.10% over the same period, indicating that digital innovations have substantially improved profitability, operational efficiency, and customer satisfaction. Moreover, the research highlights that digital payment solutions and personalized services further boost financial returns. These results emphasize that digital banking is a key driver of financial success for commercial banks in Rwanda, laying a solid foundation for sustained growth, increased competitiveness, and long-term stability in the industry. The study concludes that ongoing expansion and enhancement of digital banking services are crucial for maintaining positive financial performance and addressing the evolving demands of customers in a digital economy.