The introduction of e-business has opened new horizons and opportunities for the banking industry. In the last few decades, application of information technology in business strategies has become the very heart of the competitive process. Thus, the fierce competition in the Ghanaian economy and particularly in the banking sector has let banks to fully exploit all factors available to help gain market share and retain customers in the digital age. Commercial banks are now providing their products and services through the electronic medium; e-banking. E-banking is considered to have a substantial impact on banks’ performance. It allows customers to interact more intensively than before with the front office of banks and, at the same time allows banks to centralize back office operations and increase their efficiency. It’s day and night availability makes it so convenient for banks’ clients.

The aim of this study is to examine the impact of e-banking on the performance of banks in Ghana using UniBank Ghana Limited as an example. Data was collected using close-ended self-administered questionnaires. The Statistical Package for Social Sciences (SPSS) software was used to analyse the data.

Analysed data indicated that E-banking does have an impact on the performance of UniBank Ghana Limited. There has been a significant increase in the net profit margin of the bank since in adopted E-banking services in 2009.











Background of the study1

Problem Statement4

Objectives of the Study5

Research questions5

Significance of Study6



Organization of the Study7



2.1 Introduction 8

Theoretical Review8

Theory of Planned Behaviour (TPB)9

Technology Acceptance Theory (TAT)10

The Theory of Reasoned Action (TRA)12

Social Construction Theory13

The Concept of Electronic Banking13

Types of Electronic Banking16

Internet Banking16

Automated Teller Machines (ATM):16

Tele Banking:16

Smart Card:16

Debit Card17


Other Forms of Electronic Banking17

Adoption of Electronic Banking in the Ghanaian Banking Sector17

Importance of E-banking18

Challenges of Electronic Banking in Ghana20

Determinants of Banks’ Performance21




Capital ratio24

Liquidity ratio24


Earning Performance25

Summary of Chapter Two (Literature Review)26




Research Design27

Area of the Study28


Sampling Technique29

Data Collection Methods29

Primary Sources of Data30

Secondary Sources of Data30

Data analysis30

Ethical Considerations31




Demographic Characteristics32

Gender Distribution of Respondents32

Age Distribution of Respondents33

Academic Qualification of Respondents34

Experience Level of Employees36

What are the effects of E-banking technologies on UniBank’s performance?37

Electronic Banking Technologies Adopted by UniBank37

Employees Perception of E-banking Technologies38

Factors Influencing Electronic Banking Adoption at UniBank39

Interview Conducted on the Benefits of E-banking Technologies to Customers39

E-banking Services are Generally Cheaper than Traditional Banking40

Challenges UniBank Faces With E-Banking Services41

Unreliable Internet Connection41

Website problem42

Security Concerns42

What are the effects of E-banking services fees on UniBank’s performance?42

E-Banking Services are more Profitable than Traditional Banking Services42

The Effect of Income on E-channels and UniBank’s Performance43

Performance of the Bank Before and After E-banking44

Performance of the Bank Over Three Years45

No Difference in Profitability as Compared to Branch Banking46

E-Banking Channels have Increased Profit46

Reduced Cost47

Increased Bank Assets48

Improved Management Quality48

Model Summary49

Analysis of Variance (ANOVA)50

How does Customers’ Education affected UniBank’s Performance?50

Customer Education about E-banking Technologies50

Customer Satisfaction51

E-banking and Unibank’s Performance52




Summary of Findings54


Recommendations to Management and Policy Makers57

Suggestions for Further Research58




Figure 4.1.1 Gender Distribution of Respondents 33

Figure 4.1.2 Age Distribution of Respondents 34

Figure 4.1.3 Academic Qualification of Respondents 35

Figure 4.1.4 Experience Level of Employees 36

Table 4.2.1 E-Banking Technologies 37

Table 4.2.2 Employees Perception of E-banking Technologies 38

Table 4.2.4 Benefits of E-banking Technologies to Customers 40

Table 4.2.5 E-banking Services are Generally Cheaper than Traditional Banking 41

Table 4.3.1 E-Banking Services are more Profitable than Traditional Services 43

Table 4.3.2 The Effect of Income on E-channels and uniBank’s Performance 44

Table 4.3.3 Performance of the Bank Before and After E-banking 44

Table 4.3.4 Performance of the Bank Over Three Years 45

Table 4.3.5 No Difference in Profitability as Compared to Branch Banking 46

Table 4.3.6 E-Banking Channels have Increased Profit 47

Table 4.3.6 E-Banking Channels have Increased Profit 47

Table 4.3.7 Reduced Cost 48

Table 4.3.8 Increased Bank Assets 49

Table 4.3.9 Improved Management Quality 49

Table 4.3.10 Model Summary 49

Table 4.3.11 ANOVA 50

Table 4.4.1 Customer Education about E-banking Technologies 51

Table 4.4.2 Customer Satisfaction 52

Figure 4.5 Regression Analysis 52


Statistical Package for Social Sciences SPSS

British Bank of West Africa BBWA

Information and Communications Technology ICT

Automated Teller Machine ATM

Consultative Group to Assist the Poor CGAP

Personal Computer PC

Theory of Planned Behaviour TPB

Technology Acceptance Theory TAT

The Theory of Reasoned Action TRA

Interactive Voice Response IVR

Bank of Ghana BoG

uniBank UB

Internet Service Protocol ISP

Electricity Company Ghana ECG

Digital Satellite Television DSTV

Analysis of Variance ANOVA



Background of the study

Historically banks started as money changers banco’ or ‘banca, the Italian word I bank, which refers to the bench used by money changers to display their currencies (Deldred, 2006). In 1894 the first Commercial Bank was opened in Ghana with support from the London- run Africa Banking Corporation (Osakunor, 2009). That was the British Bank of West Africa (BBWA), which later became Standard Chartered Bank Ghana Ltd in 1985. Buckle et al, (1999) noted in their article on the history of banking in Ghana that, shortly after the Bank was established in Accra it was able to acquire the business of maintaining the Government accounts. In addition, it was able to introduce the use of cheques in settlement of Government accounts which helped to advertise the usefulness of the Bank to the public.

The fierce competition in the Ghanaian economy and particularly in the banking sector has let banks to fully exploit all factors available to help gain market share and retain customers, in the digital age. Daniel, (1999) noted that, success or failure of many retail banks is dependent upon the capabilities of management to anticipate and react to such changes in the financial marketplace. In the last few decades, application of information technology in business strategies has become the very heart of the competitive process. Asante-Gyabaah, (2015) while studying Electronic Banking in Ghana added that in the search for sustainable competitive advantages in the competitive and technological financial service industry, banks have recognized the importance to differentiate themselves from other financial institutions through distribution channels. This has resulted in banks developing, and utilizing new alternative distribution

channels to reach their customers (Daniel, 1999; Thornton and White, 2001). Furthermore, information technological developments in the banking industry have sped up communication and transactions for customers (Giannakoudi, 1999).

Asemanyiwaa, (2012) in her study Electronic Banking Adoption in Ghana also stated that, advancements in technology saw the banks networking their branches and operations thereby making the one-branch philosophy a reality late in 1980. According to Boateng & Molla (2006), Banking operations have evolved from the mere exchange of cash, cheques and other negotiable instruments to the application of Information and Communications Technology (ICT) to banking transactions. Akuffo-Twum, (2011) added that, the Ghanaian Banking Industry has developed from traditional, “brick and mortar” to Electronic Banking. Dr. Acka & M. R. Agboyi (2014) cited in their study that Barclays Bank (Gh.) and Standard Chartered Bank (Gh.) pioneered this very important electronic novelty, which changed the banking landscape in the country. Globalization and the need to upgrade services to an internationally accepted level have prompted Ghanaian banks to offer E-Banking services. With these findings, one can say that, E- Banking is a method of banking in which the customer conducts transactions electronically via the internet. However, the Federal Trade Commission in 2012 also indicated that, for many people, E-Banking means 24 - hour access to cash through an automated teller machine (ATM). But E-Banking is not only limited to conducting electronic transactions or access to the ATM, it involves different types of transactions, rights, responsibilities and sometimes fees. The services provided by banks using electronic channels have evolved from simple consultation of account to a full range of banking services. These include viewing and verifying transactions on account, Checking Balances, Printing Statements, Monitor uncredited and unpaid cheques, and many more. The evolution of electronic banking has altered the nature of personal-customer banking

relationships and has many advantages over traditional banking delivery channels. These include increase in customer base, cost savings, mass customization and product innovation, marketing and communications, development of non-core businesses and the offering of services regardless of geographic area and time (Giannakoudi, 1999). Compared to the traditional form of banking, Jones et al (2004) in their study found that banks saved 107 times of total cost when E-Banking services were employed. Pennathur (2001) found that E-Banking decrease operational, legal, reputation risks, and increase competition thus promoting better services amongst competing banks. E-Banking also allow customers to interact more intensively than before with the front office of the bank and, at the same time allow banks to centralize back office operations and increase their efficiency. It’s day and night availability makes it so convenient for the banks’ clients.

Akuffo-Twum, (2011), in his study “The Effect of Internet Banking on the Ghanaian Banking Industry” highlighted that, Ghana, like any third world country has not attained the level of Western societies and therefore cannot be expected to have similar levels of E-Banking services. A high percentage of people in the country are unbanked. Out of a population of about 23 million, only 2.2 million people have bank accounts (Business & Finance | Tue, 15 Dec 2009). However, Ghana is highly banked compared to peers such as Kenya, Tanzania, Uganda and Rwanda, a study by the Consultative Group to Assist the Poor (CGAP) (2016), has shown adults in each country who have registered bank accounts, includes Ghana 34%, Kenya 28%, Tanzania 21%, Rwanda 16% and Uganda 14%. This rather low patronage of banking services is attributed to the fact that the economy is to large extent cash based.

The face of banking in Ghana is fast changing and focus is now on new delivery channels, to improve customer service and give way to 24 hours a day access to banking services. Akuffo-

Twum, (2011) supported this in his study on “The Effect Of Internet Banking On The Ghanaian Banking Industry” he added that, with E-Banking, customers are supposed to transact from the comfort of their homes and offices and be able to do most of the transactions which would have been done in the banking halls. He further stated that; using a PC with an internet connection, they are able to transact on their traditional accounts such as cash withdrawals, Transfers from one account to the other, payments of utility bills, viewing and printing of statements, request for cheque books etc. Nimoh, (2016) in her “Assessment of Electronic Banking on Banks Performance” believes that the advancement in technology has played an important role in improving service delivery standards in the Banking industry. In its simplest form, Automated Teller Machines (ATMs) and deposit machines now allow consumers carry out banking transactions beyond banking hours.

Problem Statement

Several studies have been done on electronic banking in Ghana (e.g. Ankrah, 2016; Dr. Mawutor, 2014; Asante-Gyabaah, 2015; Bonsu, 2015; Nkegbe, Ustarz, 2015; Asemanyiwaa, 2012; Yahiya, 2011) however; they have not examined the impact of electronic banking on the performance of banks in Ghana. The closest to the area of this study has been the work by Dr. Mawutor, 2014; (2009) that examined the “Impact of E-Banking on the Profitability of Banks in Ghana”. This study covers a wider period in terms of data, than Dr. Mawutor’s which mainly covers the period up to 2014. Dr. Mawutor’s discussion appears to provide less information on E-Banking and the performance of banks, the literature barely discusses the issue from the wider perspective. As result of this, the study seeks to examine the effect of E-Banking on the performance of UniBank using Regression Analysis. Ankrah, (2016) posits that E Banking is a strategy that generates growth and profitability for banks due to its cost effective nature, and the

ease with which its usage generates revenue for banks, and this would have an enormous influence on the prospect/ future of banking. Daniel & Storey, (1997), however, cautioned us that it is not clear whether all Ghanaian customers want or are comfortable with electronic banking. Obiri-Yeboah et al, (2013) later advised that banks should properly understand the impact of technology on their efficient service delivery, customer satisfaction, performance as well as employees’ productivity in order to maximize the return on their investment. The Bank of Ghana is doing its best to ensure a paperless financial economy by encouraging banks to invest more on E-Banking. However, some of these banks have not been able to recoup their investment on E- Channels, this maybe as a result high illiteracy rate in the country.

Objectives of the Study

The major objective of the study was to determine the effect of electronic banking on the performance of UniBank Ghana. In achieving this major objective, the study specifically:

1. Examined the E-Banking technologies adopted by UniBank and their effect on the bank’s performance

2. Examined E-banking services fees and the effect of that on UniBank’s performance

3. Explored the education given by the bank to its customers and its effect on UniBank’s performance

Research questions

The following research questions were addressed by the study.

1. What are the effects of E-banking technologies on UniBank’s performance?

2. What are the effects of E-banking services fees on UniBank’s performance?

3. How does customers’ education affect UniBank’s performance?

Significance of Study

In today’s competitive global market environment, adoption and use of Information and Communication Technology in banking operation is not just an optional decision for banks to ensure their profitability and survival in the future (Nigussie, 2015). It is believed that only banks that overhaul the whole of their customer service and delivery system and also utilize electronic channels to their operations are likely to survive and prosper in the contemporary business environment. Thus, senior managers of banks in Ghana should adequately understand and be able to measure the impact of Information and Communication Technology on betterment of their performance.

Hence, the purpose of the present study is to explore the effect of electronic banking on the performance of banks in the Ghanaian Banking Industry based on a selected case (UniBank). The result of the study will help bankers, bank managers and all relevant decision makers to be aware of the role electronic banking plays on the performance of Ghanaian banks. Moreover, the result of the study provides additional research insight into how electronic banking affects the performance of banks and inspires other researchers to conduct more researches in the area. Finally the conclusion will be a useful tool in the development of the nation and will be a strategic guide for E-Banking adoption, which is relevant to the national policy of using banks to facilitate economic and social growth.


This study is confined only to examine the effect of Electronic Banking on banks performance in the Ghanaian industry using UniBank Ghana as an example.


The researcher faced a lot of problems during the research; questionnaires remained in the possession of the bank for weeks and this slowed the pace of the work.

Management were not willing to give out certain information which could have been of great help to the researcher because they deemed it ‘‘confidential’’, hence all effort made to get those information was unsuccessful.

The cost involved in producing the research work was very expensive; taking into consideration the travelling expenses, purchase of stationary, printing among others.

The time frame was too short for a full and detailed study of such nature to be conducted. There was not enough time to conduct interviews and get the necessary information needed to enrich the study.

Organization of the Study

This study is organized into five chapters. The Introduction, which is Chapter one, consist the background of the study, problem statement, the objectives of the study, research questions, significance of the study, limitations of the study, delimitation, and how the study is organized . Chapter two discusses literature related to the study while research methodology is discussed in chapter three. The fourth chapter presents the data and analysis based on the objectives and research questions using (IBM SPSS Statistics v22 v64) analysis. Chapter five presents the summary of findings, conclusions and recommendations.




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