The effect of digital marketing on performance of commercial banks in Rwanda

Abstract

The study assesses the effect of digital marketing on performance of commercial banks in Rwanda. The specific objectives were to identify the common digital marketing platforms used by the commercial banks in Rwanda; to determine the extent to which the application of digital marketing has improved customers convenience as channel of performance of commercial banks in Rwanda; and to assess how the application of digital marketing help in reducing marketing cost against traditional marketing in commercial banks in Rwanda. This study employed a descriptive cross-sectional survey design where it was used to gather information on a population of 95,500 customers and 243 employees at a single point in time. The sample size was included by 37 customers from BPR and 63 customers selected at Equity Bank, and 46 employees from BPR and the 25 employees from Equity Bank. The study findings show that Google Ad was used by 16.0% in Equity Bank while in BPR was confirmed by 21.7% of respondents to be digital marketing platform. Facebook was used by 40.0% in Equity Bank while in BPR; it was used by 28.3% of respondents. Instagram was used by 40.0% in Equity Bank while in BPR, it was on rate of 28.3%. Blogger was 4.0% in Equity Bank while in BPR; it was confirmed by 8.7% of respondents. Tweeter was confirmed on zero rate at Equity Bank while in BPR, was confirmed on 4.3% of respondents. E-mail was on zero also in Equity Bank while in BPR; Email was confirmed on 8.7% of respondents. The findings show that the application of digital marketing has improved customers convenience. Mobile banking was 15.2% in BPR; Account opening was on 13.0% in BPR; account management was on rate of 28.0% in Equity Bank and 32.6% in BPR; Card Payments was on 28.0% in Equity Bank and 15.2% in BPR, Money transfers was on 40.0% of respondents in Equity Bank in Rwanda while 21.7% was from BPR. The application of digital marketing helps in reducing marketing cost against traditional marketing in commercial banks in Rwanda where 28.0% in Equity Bank said that digital marketing reduces the cost at a very high level; while 50.0% respondents in BPR said that digital marketing reduce the cost of marketing for Bank at a very high level. To conclude, according to the findings there is significant effect of digital marketing on performance of commercial banks in Rwanda. As recommendation, the commercial banks in Rwanda should invest in digital platforms so as to be in a position to take full advantage of the digital marketing potential.