Abstract:
The research was purposely conducted to examine the effect of mobile banking and financial
performance of banking institutions. The objectives were to determine the effect of mobile
banking on return on assets, assess the effect of mobile banking on return on investment establish
the effect of management decision making on financial performance and how technology has
enhanced financial outcomes. The researcher used a correlation research design with both
qualitative and quantitative methods. The sample size was 169 people who were selected from
300 ZCSS staffs and members at the Head Office-Gasabo-Remera. These respondents were
selected by use of purposive and convenience sampling techniques. The questionnaire and
interview guide were used to collect primary data while documentary checklist was used to
collect secondary data. Data entry was done by use of SPSS and Microsoft. In terms of changes
in return on assets, it was found out that bank assets and profitability was positive. For example,
the bank’s total assets grew from Rwf 170,144,653 in 2015 to Rwf 215,427,597 thus registering
an increase of 27% growth rate from 25% registered in 2015. Net asset profit grew by 31% from
Rwf 5,240,118 in 2015 to Rwf 6,860,465 in 2016. In 2014, total net income from investments
was Rwf 13,497,130,647 which subsequently increased to Rwf 15,521,760,859 in 2015 and Rwf
19,251,466,657 in 2016. This signifies that ZCSS has been registering positive financial
performance in 2014-2016. Management and the level of technology have also indirectly
promoted performance in terms of risk reduction, convenience, cost reduction, etc. Pearson
correlation recorded a value of 0.781*, which signifies that there was a very strong and
significant relationship between mobile banking and financial performance in ZCSS, where MB
product affect indirectly the performance. It is however observed that mobile banking (MB) is
exposed to security threats of fraud and virus attacks, affected by poor internet connection some
time in rural areas. Management should therefore make effort to improve security of customers’
deposits, ensure even distribution of automated teller machines (ATMs), point of sale in strategic
locations, ensure interoperability between telecommunication companies, etc.
