Statistical Study on the Impact of Digital Economy on Zambia’s Banking Sector

Abstract

Digital economy is one of the important contributions to the development and growth of a country; it is because of this that Zambia sought to include digital technology in their national development plan and it has existed for over a decade.  The introduction of digital technologies in the country has given commercial banks an opportunity to embrace digital technology.  Commercial banks are investing in technology because they are inclined to the view that advancement in technology improves quality service delivery, brings about competitive advantage as well as profitability.  Among the innovative products introduced include electronic banking services such as mobile banking, ATM (credit cards), internet banking to mention but a few. It is for this reason that, this research paper focuses on the statistical study on the impact of digital economy on Zambia’s banking sector.  The study was based on the data gathered from 10 commercial banks in Zambia.  In order to access how digital technology has impacted the banking sector, customer satisfaction and bank’s financial performance were measured.  For the first analysis, a SERVPERF model was used to examine customer satisfaction on e-banking’s service quality. The spearman’s correlation coefficient was used to find out the relationship between the variables, the results indicated that there existed a negative relationship between e-banking’s service quality and customer satisfaction, and it was significant.  The second analysis used the regression analysis model to measure the financial performance of Zanaco Bank.  Zanaco bank was the first to introduce electronic banking services in the country, therefore this study aimed at analyzing how e-banking services have influenced the bank’s financial performance.  Return on assets (ROA) as a measure of financial performance was measured against the independent variables (ATM transactions, Mobile banking and internet banking.  The results of the analysis revealed that there was no significant relationship between e-banking services and financial performance.

Keywords: Digital economy, E-banking, Customer satisfaction, financial performance.