Perception of Workers on the Impact of Financial Technology on Bank Profitability: The Case of Commercial Bank of Ethiopia
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Date
2024-06-25
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A.A.U
Abstract
One of the most important strategies banks employ to be profitable and competitive in the banking industry is financial innovation. Using the six financial technology dimensions, this study investigates how financial technology affects bank profitability based on the perceptions of employees at the Commercial Bank of Ethiopia. The impact of fintech on bank profitability was evaluated using the six fintech dimensions, namely ATM, mobile banking, online banking, POS, mobile wallet, and electronic fund transfer. To achieve the research objectives, the study used a descriptive and explanatory research design. To obtain a representative sample from the population, a purposive sampling technique was employed. Using a structured questionnaire, the required data was gathered from Commercial Bank of Ethiopia employees working in branches located in the city of Addis Ababa. A total of 350 out of the 395 questionnaires that were distributed to gather data were returned. Version 26 of the Statistical Package for the Social Sciences (SPSS) was used to process the data. Out of the six financial technologies, four have a positive beta (β) value, indicating a positive association and significant influence on bank profitability. In contrast, two predictors, ATM and POS, insignificantly affect bank profitability, with ATM also having a negative β coefficient, indicating a negative relationship with profitability. Internet banking is the best predictor among all explanatory variables, and it is important to fully utilize it to increase bank profitability.