Assessing The Impact Of Electronic Banking On Commercial Banks Profitability In Africa

Abstract

Electronic banking basically refers to performing banking functions or transactions using a smart technologically inclined device or the internet. Information Technology has recently influenced banking operations, transactions and service delivery. It has provided a channel through which banking is done in convenience, thereby, reducing customer queues in banking halls, administrative expenses and the complexities associated with traditional banking. However, the disadvantages of electronic banking are quite significant. They include unauthorized data access, data loss and fraudulent activities. Using the internet, banks display all relevant information regarding their products on their website which is easily accessible to customers. The study assessed the impact of electronic banking on commercial bank‟s profitability by using the standard systematic literature review method. Various data bases were searched using set criteria. The literature search yielded 13 articles after applying inclusion and exclusion criteria. Results from the literature reveal that electronic banking has brought about many opportunities for the banking sector in Africa as regards profitability, partly due to the reduced number of tellers and front-line staff. On the hand, incidences of fraud have increased. The study concludes that electronic banking has a positive effect on the profitability of banks in Africa due to the streamlining of operations brought about by technology