Digital banking strategy and financial performance of banks in Zimbabwe

Abstract

The main objective of the study was to investigate on the extent of digitalisation among Zimbabwean Banks, the drivers of digitalisation, the challenges faced by banks in adopting and operating digitalised systems and the relationship between digitalisation and performance of the banks. The study adopted a cross sectional survey research design and both qualitative and quantitative research methods were employed to ensure a comprehensive data collection. The study population comprised of a sample of 95 employees of commercial banks. A multistage sampling approach was adopted which included purposive sampling and stratified random sampling methods to select the respondents from the total population. The study used mainly the questionnaire technique and interviews to assess the views of the respondents. The study found out that digitalisation has been adopted to a greater extent by most commercial banks in Zimbabwe. Most Zimbabwean banks now offer a platform for personalised computer banking and digital banking methods such as internet banking, mobile banking services and virtual banking. The study also found out that innovation, globalisation and development of Fintech banking methods and competition among banks are the major drivers for banks digitalisation in Zimbabwe.The study also found that the most prevalent challenges in the banks’ adopting and use of digitalisation methods include factors such as high risk of cybercrimes, threats from non- bank disruptors, lack of expertise to lead digitalisation initiatives and cost of adopting digital technologies and that there exists a significant positive relationship between digitalisation and revenue, profit, market share and return on assets of banks. The study serves as a wakeup call for organisations to strengthen their digital banking methods as modern-day customers have become keen of technology and always up to date with latest technologies that brings banking convenience to their homes. The study recommends that commercial banks should always be on the lookout for new technologies and digital banking methods. Improving these will have a great impact on their performance as these technologies bring in efficiency and convenience to customers which ultimately leads to customer satisfaction and therefore revenue and market share growth of the companies.