Mobile Banking and Financial Performance of Commercial Banks

MOBILE BANKING AND FINANCIAL PERFORMANCE OF COMMERCIAL
BANKS IN UGANDA. CASE STUDY STANDARD CHARTERED BANK
(UGANDA) LIMITED MBARARA BRANCH
TURIHAMWE AMBROSE
11/BSU/BBA/287
A RESEARCH REPORT SUBMITTED TO THE FACULTY OF BUSINESS AND
DEVELOPMENT STUDIES IN PARTIAL FULFILLMENT OF
REQUIREMENTS FOR THE AWARD OF BACHELORS’
DEGREE IN BUSINESS ADMINISTRATION OF
BISHOP STUART UNIVERSITY.
MAY, 2014
DECLARATION
I, hereby declare that this research report is my original work and has never been
submitted to any University or institution for any other award. Where work of others
have been used (citations) due acknowledge has been made.
SIGNATURE ………………………………………DATE ……………………………

TURIHAMWE AMBROSE
11/BSU/BBA/287
1
APPROVAL
This report on Mobile banking and financial performance of commercial banks in
Uganda have been submitted with my approval as a University supervisor
SIGNATURE …………………………………… DATE ………………………………

MR. KAKUBA DENNIS
(SUPERVISOR)
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DEDICATION
I affectionately dedicate this research report to my beloved mother Mrs.Nagaba Jane,
Aunt Harriet Komujuni and Uncle Kwikiiriza Pison for all moral and financial support
they rendered me, and for their effort towards what I am today .I Love you all and may
God bless you.
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ACKNOWLEDGEMENTS
I give glory and thanks to the almighty God for His goodness and faithfulness to me in
finishing this research. I would like to express my sincere application to my supervisor
Mr. Kakuba Dennis for his guidance through this work. Without his assistance this report
would not have become a success.
I would like to extend a warm sincere gratitude to the entire staff employees of Standard
Chartered bank (Uganda) who participated in this study for providing the necessary
information required despite their tight schedules.
I would like to thank my friends, Nantale Mercy, Masereka Alex, Magezi Innocent,
Muyambi Ronard, and others who supported in any way. God bless you all.
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TABLE OF CONTENTS
DECLARATION..................................................................................................................i
TURIHAMWE AMBROSE.................................................................................................i
APPROVAL........................................................................................................................ii
DEDICATION...................................................................................................................iii
ACKNOWLEDGEMENTS................................................................................................iv
LIST OF TABLES...........................................................................................................viii
LIST OF FIGURES.............................................................................................................x
LIST OF ACRONYMS......................................................................................................xi
ABSTRACT......................................................................................................................xii
CHAPTER ONE................................................................................................................1
1.0 Introduction....................................................................................................................1
1.1 Background of the Study...............................................................................................1
1.2 Problem Statement.........................................................................................................5
1.3 Purpose of the study.......................................................................................................5
1.4 Objectives of the study..................................................................................................5
1.5 Research Questions........................................................................................................6
1.6 Scope of the study..........................................................................................................6
1.6.1 Content scope..............................................................................................................6
1.6.2 Geographical scope.....................................................................................................6
1.6.3 Time scope..................................................................................................................6
1.7 Significance / justification of the study.........................................................................7
CHAPTER TWO:LITERATURE REVIEW..................................................................8
2.0 Introduction....................................................................................................................8
2.1 Definition.......................................................................................................................8
2.1.1 Mobile banking...........................................................................................................8
2.1.2 Financial Performance................................................................................................8
2.2 M-banking technology used at commercial banks........................................................9
2.3 The factors influencing the adoption of mobile banking services...............................13
2.5 Relationship between mobile banking and financial performances............................19
CHAPTER THREE:RESEARCH METHODOLOGY...............................................23
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3.0 Introduction..................................................................................................................23
3.1 Research design...........................................................................................................23
3.2 Population of thee study..............................................................................................23
3.3 Sampling design and Sampling size............................................................................23
3.3.1 Sampling design........................................................................................................23
3.3.2 Sample size...............................................................................................................24
3.4 Data collection methods and instrument......................................................................24
3.4.1 Data source...............................................................................................................24
3.4.1 Primary data source..................................................................................................24
3.4.2 Secondary data source..............................................................................................25
3.4.2 Collection methods and instrument..........................................................................25
Questionnaire.....................................................................................................................25
3.5 Data collection instruments.........................................................................................25
3.6 Data collection procedure............................................................................................26
3.7 Data processing and analysis.......................................................................................26
3.8 Limitation of the study.................................................................................................26
CHAPTER FOUR:PRESENTATION, DISCUSSION AND ANALYSIS OF
FINDINGS........................................................................................................................27
4.0 Introduction..................................................................................................................27
4.1. Bio data information summary...................................................................................27
4.1.1 Gender.......................................................................................................................27
4.1.2 Age bracket of the respondents.................................................................................28
4.1.3 Marital status of the respondents..............................................................................29
4.1.4 Education Level........................................................................................................29
4.1.5 Period worked of the respondents.............................................................................30
4.1.6 Department of the respondents.................................................................................31
4.1.7 Period of banking with the organization...................................................................32
4.1.8 Accounts held...........................................................................................................32
4.2 To find out m-banking technology used at Standard Chartered Bank (Uganda)........33
4.2 .1 Mobile banking defined...........................................................................................33
4.2.2 Method of Mobile Banking Services........................................................................34
4.2.3 Responses on whether one can access M-banking any time 24 hours.....................36
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4.3 To examine the factors influencing the adoption of mobile banking services at the
Standard Chartered Bank (Uganda)...................................................................................37
4.4 The relationship between mobile banking and financial performance........................40
CHAPTER FIVE:DISCUSION, CONCLUSION AND RECOMMENDATIONS...46
5.0 Introduction..................................................................................................................46
5.1 Summary of Major Findings........................................................................................46
5.1.1 To evaluate how the m-banking technology work at Standard Chartered Bank
(Uganda),...........................................................................................................................46
5.1.2 To examine the factors influencing the adoption of mobile banking services at the
Standard Chartered Bank (Uganda) using a case study of Mbarara Branch in Mbarara
Municipality.......................................................................................................................47
5.1.3 Findings on the relationship between Mobile banking and financial performance..48
5.2 Conclusion...................................................................................................................49
5.4 Area of further study....................................................................................................51
REFERENCES..................................................................................................................53
APPENDIX:questionnaire For Staff Of Standard Chartered Bank (Uganda)...................57
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LIST OF TABLES
Table 1: Distribution of respondents according to their department.................................24
Table 2: The table below shows the sex/gender of the respondent...................................27
Table 3: This table shows age bracket of the respondents.................................................28
Table 4: Showing Marital Status of the respondents.........................................................29
Table 5: Showing distribution of respondents according to level of Education................29
Table 6: Shows the period worked with the bank..............................................................30
Table 7: A Table showing department of the respondents................................................31
Table 8: Shows the period of banking with the bank........................................................32
Table 9: Shows the accounts held by the respondents.......................................................33
Table 10: Banking Services Subscribed............................................................................34
Table 11: Methods(tools) in Mobile banking....................................................................34
Table 12: A table showing one can access M-banking service any time 24 hours...........36
Table 13: A table on respondent on payments of utility bills............................................36
Table 14: showing deposit/ withdraw money using Mobile phone...................................37
Table 15: showing the critical success factors for mobile banking adoptions..................37
Table 16: M-banking is coping with the ever changing customer expectations................38
Table 17: M-banking was introduced to gain competitive advantage...............................38
Table 18: showing m-banking increase convenience to customer....................................39
Table 19: Table below shows M-banking transaction are kept confidential.....................39
Table 20: showing if respondent use bank’s mobile banking services..............................39
Table 21: showing respondent using m-banking services if not working with the Bank..40
Table 22; Shows services offer by Standard Chartered Bank (Uganda)...........................40
Table 23: The table below shows whether M-banking enables provision of better quality
services..............................................................................................................................41
Table 24: below showing loss of data due to system failure is a risk to m-banking.........41
Table 25: The table below reveals, m-banking has led to increase in financial
performance.......................................................................................................................42
Table 26: Showing whether the Mobile Banking systems in Standard Chartered Bank are
timely and adequate according to the customer’s emergency needs.................................42
Table 27: Showing whether the ATM cards are renewed on time and the customers get
informed on time to acquire them......................................................................................42
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Table 28: Showing whether the Mobile banking systems are strong with electronic
passwords that are hard to be penetrated by the hijackers so as prevent fraud..................43
Table 29: Showing whether the Customer is satisfied according to the way Standard
Chartered Bank carry out their Mobile banking systems..................................................43
Table 30: showing whether there is an increase in new customers as well as sustaining the
loyal customers at the same time due to the presence of adequate electronic systems in
Standard Chartered Bank...................................................................................................44
Table 31: showing whether there is conducive atmosphere in Standard Chartered Bank
that motivates the employees to work hard and thus offer good services like customer
care to their clients.............................................................................................................44
Table 32: Below shows Relationship of m-banking and financial performance...............45
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LIST OF FIGURES
Figure 1: shows education level of the respondents..........................................................30
Figure 2:Shows Period worked of the respondents...........................................................31
Figure 3: A pie chart on department of the respondents....................................................31
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LIST OF ACRONYMS
M-banking Mobile Banking
BOU Bank of Uganda
MTN Mobile Telephone Network
Stanchart Uganda Standard Chartered Bank (Uganda) Limited
E-banking Electronic Banking
M-transactions Mobile Transactions
ICT Information Communication Technology
PDA Personal Digital Assistant
ATM Automatic Teller Machine or Automated Teller Machine
E-commerce Electronic Commerce
E-funds transfer Electronic Funds Transfer
SMS Short Message Services
CAMELS (Capital adequacy, Asset quality, Management, Earning,
Liquidity and Sensitivity analysis)
US$ United States of America Dollar

UGX Ugandan Shilling
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ABSTRACT
The introduction of customer friendly service by the bank such as m-banking, internet
banking, Automated Teller Machines among others as a way of delivering convenience
service to customer has become common in the recent year as a way of gaining
competitive advantage and maintaining customer loyalty and increase share in order to
improve the financial position of a company. The study main objectives were; to find out
m-banking technology used at Standard Chartered Bank (Uganda) using a case study of
Mbarara Branch in Mbarara Municipality; to examine the factors influencing the
adoption of mobile banking services at the Standard Chartered Bank (Uganda) using a
case study of Mbarara Branch in Mbarara Municipality and To establish the relationship
between m-banking and financial performance of Standard Chartered Bank (Uganda)
using a case study of Mbarara Branch in Mbarara Municipality.
The methods used to collect data basically through self administered questionnaires both
structured and semi-structure, interviews and observation. The Data collected was
analyzed qualitatively and quantitatively. The study was also backed by literature review
on m-banking and banking sector in Uganda . The study findings indicate that one need to
register with bank and maintain an account with both the bank and telecom company
such as MTN. The services offer by standard chartered bank (Uganda) include; Account
Balance Enquiry, Fund Transfer between Accounts, Bills payment (utility bills) among
others. The introduction of m-banking in Uganda has contributed to customer loyalty,
convenience and also has influenced the financial performance of the banking sector in
Uganda positively. Therefore there is a positive relationship between m-banking and
financial performance of a bank.
Conclusion and recommendation were made towards strengthening the contribution of m-

banking to financial performance of the banking sector in Uganda. the researcher
recommends that; The bank should conduct research on other possible m-banking
packages, Free training and refreshing training should be provided to staff of the bank
and if possible to customers and The bank should provide toll free line to enable
customers who want to use the system and also in case of any problem that deserve
attention of the bank.
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CHAPTER ONE
1.0 Introduction
This chapter covers the background of the study, statement of the problem, purpose of the
study, objectives of the study, research questions, scope of the study and the significance/
justification of the study.
1.1 Background of the Study

Recent innovations in telecommunications have enabled the launch of new access
methods for banking services; one of these is mobile banking; whereby a customer
interacts with a bank via mobile phone (Barnes & Corbitt, 2003). In India 617 million
mobile subscribers far exceed fixed line subscribers because of better mobile
infrastructure (TRAI, 2010). The banks in India are racing to use this latest technology to
reduce their operational costs and increase customer base (Peterson, 2009). Mobile
Banking refers to provision and a ailment of banking and financial services with the help
of mobile telecommunication devices. The scope of offered services may include
facilities to conduct bank transactions, to administer accounts and to access customized
information (Tiwari & Buse, 2007).After the launch of mobile banking in India, mobile
banking transactions have seen some growth. What attracts customers to mobile banking
is the round the clock availability and ease of transactions. But mobile banking still has a
long way to go as majority of customers prefer banking in the traditional ways (Ashta,
2010; Wang,Wang, Lin & Tang, 2003). Key question is why customers are not adopting
mobile banking. Various factors may influence customers’ adoption. It is argued that
adoption will not take place unless customers perceive the service to be useful (Ali &
Bharadwaj, 2010). Understanding the symptoms of the problem of why there is a low rate
of mobile banking usage along with understanding of preferred mobile banking services,
could help banks to come up with a right solution to improve their mobile banking
service as well as to increase the rate of Mobile banking usage.
Mobile banking offers a potential solution for the millions of people in emerging markets
that have access to a cell phone, yet remain excluded from the financial mainstream. It
can make basic financial services more accessible by minimizing time and distance to
the nearest retail bank branches (CGAP, 2006) as well as reducing the bank‘s own
overheads and transaction related costs. According to the International
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Telecommunication Union (ITU), over 90% of South Africans use a mobile phone (ITU,
2009), while only 40% have a bank account (African Executive, 2008). Mobile banking
presents an opportunity for financial institutions to extend banking services to new
customers (Lee, Lee and Kim, 2007).
In recent years, banks, payment system providers, and mobile operators have begun
experimenting with branchless banking models which reduce costs by taking small-value
transactions out of banking halls and into local retail shops, where agents such as airtime
vendors, gas stations, and shopkeepers, register new accounts, accept client deposits,
process transfers, and issue withdrawals using a client’s mobile phone to communicate
transaction information back to the telecommunication provider or bank. This enables
clients to send and receive electronic money wherever they have cell coverage. They
need to visit a retail agent only for transactions that involve depositing or withdrawing
cash (Salzaman, Palen & Harper, 2001).
Stiff competition in Uganda’s financial sector is forcing institutions into adopting new
forms of technology to reduce the costs of doing business and widen customer outreach
for enhanced profitability. Banking services has become usual in recent years as a way of
maintaining customer loyalty and increase market share. (Africa-Uganda- Business-
Travel-Guide.com). the new innovative systems (such as mobile banking) are especially
targeting the earning but unbanked population in rural and hard to reach areas.
According to Bank of Uganda (BoU)’s 2012 Annual Supervision Report, annual bank
deposits have grown over the last three years though at a sluggish rate, an indication that
more Ugandans are slowly taking on banking. Last year, bank deposits grew by 17.5% to
Ushs 10.5trillion up from Ushs 8.9trillion in 2011. In 2010, bank deposits grew by 42.5%
to Ushs 8.02% up from 5.63% in 2009. The same report notes that in 2012, Mobile
Money (MM) transfer services continued to register strong growth.
The number of registered customers increased from 2.9 million in 2011 to 8.9 million in
2012, while the amount transferred by customers rose from Ushs3.7 trillion to Ushs.11.7
trillion over the same period,” reads a BoU report. With 8.9 million Ugandans holding a
Mobile Money account in just four years, yet about 3.5 million Ugandans hold a bank
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account, is just enough to tell that MM platform has taken Uganda’s banking sector by
storm. Pioneered by MTN Uganda in 2009, the MM transfer product has been embraced
by all major telecom companies including Airtel and Warid, Uganda Telecom (UTL) and
Orange. Housing Finance Bank also offers this service under their M-cash with Ezee
Money being the newest entrant. So, what explains the massive uptake of MM services
compared to banking, yet commercial banking operations in Uganda started in 1906?
Nasikye (2009) Mobile banking (m-banking) involves the use of a mobile phone or
another mobile device to undertake financial transaction linked to a client account.
According to Owen m-banking refers to provision and availing of banking and financial
service with the help of mobile telecommunication device. Services include performing
balance checks, account transactions, payments, credit applications and other banking
transactions through a mobile device such as a mobile phone which is most used in
developing countries or Personal Digital Assistant (PDA).
Financial performance refers to the financial soundness where depositors’ funds are safe
in a stable banking system. (BOU, 2002)The financial soundness of a financial institution
may be strong or unsatisfactory varying from one bank to another. Mugembe (2008)
external factors such as deregulation: lack of information among bank customers,
homogeneity of the bank business do cause bank failure. The activities undertaken in m-
banking contribute to the financial soundness of the commercial banks in Uganda. Some
useful measures of financial performance are coined into what is refer to as CAMELS
(Capital adequacy, Asset quality, Management, Earning, Liquidity and Sensitivity
analysis) which guide the banking sector Madhyam, Stichele (2010).
The technology innovations have influenced the banking sector in one way or another.
Kassim 2005 explains that the technological revolution has produced new development in
the banking industry. According to Oryiek (2008) the first ATM in Uganda was brought
by SCI for Standard Chartered Bank in 1997 and SCI has been an active catalyst in the
rapid growth and development of electronic banking in the country hence the introduction
of m-banking few years ago and this explains why Standard Chartered Bank is ranked as
one of the performing banks in Uganda.
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Mobile banking has transformed the way people in the developing world transfer money
and now it is poised to offer more sophisticated banking services which could make a real
difference to people's lives. This type of banking can offer a wide variety of services
ranging from account information, which has to do with alerting the customers on the
updates and transactions on their account through their mobile phones. People receive
short messages on their phones informing them of their immediate transactions in their
bank accounts. Also, they help in payments (utility bills), deposits, withdrawals,
transfers, purchase airtime, request bank statements and perform 13 other crucial banking
tasks, all in real time over their mobile phones.
Banks including Standard Chartered Bank (Uganda) (Buyer and lenders, 2001) have
largely implemented service delivery technology as a way of augmenting the services
traditionally provided by personnel, Howcraft, Bacett, (1996). According to IDG News
Service from Sep, 2008 Equity bank pioneered the first m-banking technology in the
world to reach out to the unbanked, and for championed the empowerment of ordinary
people through inclusive finance. Nasikye (2009) the m-banking technology is similar to
that of MTN (mobile money) Warid (warid-pesa), Airtel money, Safaricom's MPESA (in
Kenya), among others that has made banks uncomfortable given the shift of most
transactions from banks to mobile phone kiosks
Standard Chartered Uganda, whose official name is Standard Chartered Bank (Uganda)
Limited, but is often referred to as Stanchart Uganda, is a commercial bank in Uganda
which is foreign (subsidiary of Standard Bank Group, UK) Madhyam, Myriam (2010).
As of December 2011, it was the second largest commercial bank in Uganda, by assets,
with an estimated asset base of US$792.4 million, behind Stanbic 2011 the bank.
Shareholders' Equity stood at approximately US$92.7 million. At that time, Stanchart
owned an estimated 15% of total bank assets in the country and maintained about 2.6% of
all bank branches in Uganda. Stanchart Uganda is a 100% subsidiary of the Standard
Chartered Bank Group, an International financial services conglomerate, headquartered
in London in the United Kingdom, with operations in more than seventy countries and a
network of over 1,700 branches, employing in excess of 73,000 people.
http://en.wikipedia.org/wiki/Banking_in_Uganda
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In the banking sector in our world today, mobile banking is a fast growing issue. This has
come to improve the level of banking system and can be described as the provision of
banking or financial services with the aid of mobile telecommunication devices. M-
banking has come to stay, providing its customers with an expedient way of banking.
This is not however without challenges, but they are minimal and can be handled without
much stress.
1.2 Problem Statement

Mobile banking has been one of the fastest growing markets in Uganda and is still
growing at a period at a rapid pace following the addition of few telecommunication
players who have attracted dynamic number of subscribers. Mobile banking has
transformed the way people in the developing world transfer money and now it is poised
to offer more sophisticated banking services which could make a real difference to people
lives. Mobile banking has also helped in payments (utility bills), deposits, withdrawals,
transfers, purchases airtime, request bank statements (New Vision may 2012). Despite the
above, the contribution of mobile banking as far as financial performance of commercial
bank is uncertain. Therefore the purpose of this research was to establish the relationship
between mobile banking and financial performance of commercial bank
1.3 Purpose of the study

The main purpose of the study was to establish relationship between mobile banking and
financial performance of commercial bank.
1.4 Objectives of the study

a. To find out m-banking technology used at Standard Chartered Bank (Uganda) using a
case study of Mbarara Branch in Mbarara Municipality.
b. To examine the factors influencing the adoption of mobile banking services at the
Municipality
c. To establish the relationship between m-banking and financial performance of
Municipality.
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1.5 Research Questions
a. What is the m-banking technology used at Standard Chartered Bank (Uganda) using a
case study of Mbarara Branch in Mbarara Municipality?
b. what are the factors influencing the adoption of mobile banking services at the
Municipality?.
c. What is the relationship between m-banking and financial performance of Standard
Chartered Bank (Uganda) using a case study of Mbarara Branch in Mbarara
Municipality?
1.6 Scope of the study

1.6.1 Content scope
The study concentrated on to finding out m-banking technology used at Standard
Municipality, to examine the factors influencing the adoption of mobile banking services
at the Standard Chartered Bank (Uganda) using a case study of Mbarara Branch in
Mbarara Municipality and to establish the relationship between m-banking and financial
performance of Standard Chartered Bank (Uganda) using a case study of Mbarara Branch
in Mbarara Municipality.
1.6.2 Geographical scope

The study was conducted around Mbarara Municipality since the place was convenient in
terms of; time, cost and information required which was readily available since
respondent (staff members) were accessible.
1.6.3 Time scope

The study covered the financial statement of Standard Chartered Bank for the period
2010 – 2014. This period was chosen because of mobile banking playing a big role to
financial institutions, there still exists the problem of inefficiency in the proper use of
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mobile banking systems which has led to relatively low levels of profit generation to
many financial institutions due to this period.
1.7 Significance / justification of the study

The findings of the research/study assisted the Standard Chartered Bank (Uganda) to
know which m-banking service is urgent and need strategic observation.
The study improved not only researcher’s scope of understanding m-banking but also
entire public hence gain exposure to the m-banking technology.
The dissertation was used as reference material by future researchers interested in further
research on m-banking and its effects on financial performance of commercial bank. It’s
also a requirement for award of bachelor’s of Business Administration at Bishop Stuart
University.
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CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
In this chapter related literature was viewed as provided by different authors in various
aspects of m-banking technology used at Standard Chartered Bank (Uganda) using a
case study of Mbarara Branch in Mbarara Municipality, to examine the factors
influencing the adoption of mobile banking services at the Standard Chartered Bank
(Uganda) using a case study of Mbarara Branch in Mbarara Municipality and to establish
the relationship between m-banking and financial performance of Standard Chartered
Bank (Uganda) using a case study of Mbarara Branch in Mbarara Municipality.
2.1 Definition
2.1.1 Mobile banking
Mobile banking is an application of m-commerce which enables customers to access
bank accounts through mobile devices to conduct and complete bank-related transactions
such as balancing cheques, checking account statuses, transferring money and selling
stocks (Kim et al. 2009). Luo et.al (2010), defined mobile banking as an innovative
method for accessing banking services via a channel whereby the customer interacts with
a bank using a mobile device.
According to Dr Lennart, Soderberg, 2008 m-banking is the term we use to describe

financial services delivered via mobile networks using mobile phones. Normally, such
services include depositing, withdrawing, sending and saving money, as well as making
payments. According to Owen mobile banking refers to provision and availing of
banking and financial service with the help of mobile telecommunication devices as a
mobile phone which is most used in developing countries or Personal Digital Assistant
(PDA).
2.1.2 Financial Performance
Financial soundness is a situation where depositor’s funds are safe in a stable banking
system. The financial soundness of financial institution may be strong or unsatisfactory
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varying from one bank to another (BOU, 2002). The objective of financial statement is to
provide information about the financial position, performance and the changes in the
financial position of an organization that is useful to a wide range of users in making
decision (Nkundabayanga, 2009).
2.2 M-banking technology used at commercial banks
For many consumers, Mobile banking means 24-hour access to cash through an
Automated Teller Machine (ATM) or Direct Deposit of pay checks into checking or
savings accounts. But mobile banking now involves many different types of transactions.
Mobile banking, also known as electronic fund transfer (EFT), uses computer and mobile
technology as a substitute for checks and other paper transactions. EFTs are initiated
through devices like cards or codes that let you, or those you authorize, access your
account. Many financial institutions use ATM or debit cards and Personal Identification
Numbers (PINs) for this purpose. Some use other forms of debit cards such as those that
require, at the most, your signature or a scan. The federal electronic fund transfer Act
(EFT Act) covers some mobile consumer transactions.
Electronic Fund Transfers .EFT offers several services that consumers may find
practical: Automated Teller Machines or 24-hour Tellers: are mobile terminals that let
you bank almost any time. To withdraw cash, make deposits, or transfer funds between
accounts, you generally insert an ATM card and enter your PIN. Some financial
institutions and ATM owners charge a fee, particularly to consumers who don’t have
accounts with them or on transactions at remote location. Generally, ATMs must tell you
they charge a fee and its amount on or at the terminal screen before you complete the
transaction. Check the rules of your institution and ATMs you use to find out when or
whether a fee is charged.
Direct Deposit: Lets you authorize specific deposits, such as paychecks and social
security checks, to your account on a regular basis. You also may pre-authorize direct
withdrawals so that recurring bills, such as insurance premiums, mortgages, and utility
bills, are paid automatically. Be cautions before you pre-authorize direct withdrawals to
pay sellers or companies with whom you are unfamiliar; funds from your bank account
could be withdrawn fraudulently.
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Pay-by-phone systems: Let you call your financial institution with instructions to pay
certain bills or to transfer funds between accounts. You must have an agreement with the
institution to make such transfers and Personal Computer Banking; Lets you handle many
banking transactions via your personal computer. For instance, you may use your
computer to view your account balance, request transfers between accounts, and pay bills
mobile ally.
Debit Card Purchase Transactions: Let you make purchase with a debit card, which
also may be your ATM card. This could occur at a store or business, on the Internet or
online, or by phone. The process is similar to using a credit card, with some important
exceptions. While the process is fast and easy, a debit card purchase transfers money-
fairly-quickly from your bank account to the company’s account. So it’s important that
you have funds in your account to cover your purchase. This means you need to keep
accurate records of the dates and amounts of your debit card purchases and ATM
withdrawals in addition to any checks you write. Also be sure you know the store or
business before you provide your debit card information, to avoid the possible loss of
funds through fraud. Your liability for unauthorized use and your rights for error
resolution may differ with a debit card.
Mobile check conversion; Coverts a paper cheque into a mobile payment in a store or
when a company receives your cheque in the mail. In a store, when you give your cheque
to a cashier, the cheque is run through an mobile system that captures your banking
information and the amount of the check. You are asked to sign a receipt and you get a
copy for your records. When your cheque has been handed back to you, it should be
voided or marked by the merchant so that it cannot be used again. The merchant mobile
ally sends information from the check (but not the cheque itself) to your bank or other
financial institution, and the funds are transferred into the merchant’s account. When you
mail-in a cheque for payment to a merchant or other company, they may mobile ally send
information from your cheque (but not the cheque itself) through the system, and the
funds are transferred into their account. For a mailed cheque, you should still receive
advance notice from a company that expects to send your cheque information through the
system mobile ally. The merchant or other company might include the notice on your
monthly statement or under its terms and conditions. The notice also should state if the
22
merchant or company will mobile ally collect from your account fee – like a “bounced
cheque” fee – if you have insufficient funds to cover the transaction.
Use of credit cards, the most common method of making payments online is by the use
of credit card, this card is issued to a person to or business organization for goods and
services as well as obtaining cash against the particular work done for the business
organization and these cards are so important to organization because the reduce on the
creation of errors and this is normally done by business organizations and financial
institution. (Bailly, 1995).
Debit or pre-paid cards, this method of payment is always issued to person for
withdrawing money from or to a savings or current account. These automatically increase
the performance of the institution leading to easy sourcing by the buying institution.
(Intercoms, 2000) and Digital or mobile cash E-cash, According to Gray (1994) this
refers to any of the various methods that allow a person to buy goods or services by
transmitting a number from one computer to another. The number may be in or of digits
issued by the bank to the buying organization and they use for example digital cash,
cyber buck cash and others.
Internet banking, this is also one of the new tools used in mobile payments, it has been
widely been used by different business organizations like banking institutions. They
drastically use this mechanism payment which has led to increased levels of profitability
hence improving the flexibility of the organization and Telephone billing systems, this is
a new approach used by banks; here telephone transactions allow the customer to
purchase an item or service and have the amount billed to his or her telephone. This is
mainly used on items such as down loads; time measured for charitable donation, online
for example the use of phones for banking and saving like MTN mobile money
(Telecommunication guidelines Network Guidelines, 12th Feb.2008)
Telephone Banking : "Telephone Banking (Telebanking) can be considered as a form of

remote or virtual banking, which is essentially the delivery of branch financial services
via telecommunication devices where the bank customers can perform retail banking
transactions by dialing a touch-tone telephone or mobile communication unit, which is
23
connected to an automated system of the bank by utilizing Automated Voice Response
(AVR) technology” (Balachandher et al, 2001).
According to Leow (1999), telebanking has numerous benefits for both customers and
banks. As far as the customers are concerned, it provides increased convenience,
expanded access and significant time saving. On the other hand, from the banks’
perspective, the costs of delivering telephone-based services are substantially lower than
those of branch based services. It has almost all the impact on productivity of ATMs,
except that it lacks the productivity generated from cash dispensing by the ATMs. For, as
a delivery conduit that provides retail banking services even after banking hours (24
hours a day) it accrues continual productivity for the bank. It offers retail banking
services to customers at their offices/homes as an alternative to going to the bank
branch/ATM. This saves customers time, and gives more convenience for higher
productivity.
Personal Computer Banking: Personal Computer (PC) Banking is a service which

allows the bank’s customers to access information about their accounts via a proprietary
network, usually with the help of proprietary software installed on their personal
computer”. Once access is gained, the customer can perform a lot of retail banking
functions. The increasing awareness of the importance of computer literacy has resulted
in increasing the use of personal computers. This certainly supports the growth of PC
banking which virtually establishes a branch in the customers’ home or office, and offers
24-hour service, seven days a week. It also has the benefits of Telephone Banking and
ATMs (Abor, 2005).
Branch Networking : Networking of branches is the computerization and inter-

connecting of geographically scattered stand-alone bank branches, into one unified
system in the form of a Wide Area Network (WAN) or Enterprise Network (EN); for the
creating and sharing of consolidated customer information or records (Abor, 2005). It
offers a quicker rate of inter-branch transactions as the consequence of distance and time
are eliminated. Hence, there is more productivity per time period. Also, with the several
networked branches serving the customer populace as one system, there is simulated
division of labour among bank branches with its associated positive impact on
24
productivity among the branches. Furthermore, as it curtails customer travel distance to
bank branches it offers more time for customers’ productive activities.
Fund Transfer between Accounts/ E-funds transfer: According to the Glossary of
Terms Used in Payment Settlement Systems as reported by Anguelov et al (2004) mobile
funds transfer is defined as the movement of money or credits from one account to
another through an electronic medium. Although ATMs are widely used in transfer of
cash, the use of mobile is slowly gaining popularity, there are positive results noted in the
use of e-funds transfer. According to the Australian Bankers Association (2002) as
reported by Arch and Burmeister (2003) in Australia emphasis is placed on e-banking
technologies. In this study Fund Transfer between Accounts/ E-funds transfer means the
availability, accessibility and usage of e-cheques with reference to cash deposit, cash
withdrawal and account balance inquiry.
Bill Payment: The use of technology in settling utility bills is taking root, saving
consumers time and money. In Uganda the latest application is the partnership between
utility operator, the National Water and Sewerage Corporation (NWSC) and Uganda
telecom in which consumers directly pays for their bills using M-Sente mobile money
platform or instruct their banks to remit money to the NWSC accounts. (New Vision
Reported by David Mugabe Feb 20, 2011) NWSC is phasing out cash offices, opting for
mobile money, m-banking and over the counter payments with partnering banks.
Free e-Statements: Customers receives free e-statements daily, weekly or monthly

depending on your preference outlining the transactions that have taken place during the
period and that have been processed by the bank by that date through their mobile phone.
Account balance enquiry: Under this service the client sends a request in plaintext
format to the bank server is send to the bank giving instruction to the bank and the server
responds with the required information. The clients can access inquiry services like bank
balance and mini statements using their mobile phones Abunyang (2007).
2.3 The factors influencing the adoption of mobile banking services

Mobile banking’ greatest promise is timelier, more valuable information accessible to
more people, at reduced cost of information access. With the changes in business
25
operations as a result of the Internet era, security concerns move from computer labs to
the front page of newspapers. The promise of Mobile banking is offset by the security
challenges associated with the disintermediation of data access. According to Soludo,
(2005) one security challenge results from “cutting out the middleman,” that too often
cuts out the information security the middleman provides. Another is the expansion of the
user community from a small group of known, vetted users accessing data from the
intranet, to thousands of users accessing data from the Internet. Application service
providers (ASP) and exchanges offer especially stringent and sometimes contradictory
requirements of per user and per customer security, while allowing secure data sharing
among communities of interest.
Mobile banking depends on providing customers, partners, and employees with access to
information, in a way that is controlled and secure (Soludo, 2005). Technology must
provide security to meet the challenges encountered by mobile Banking. Virtually all
software and hardware vendors claim to build secure products, but what assurance does
an E-Banking have of a product’s security? Mobile Banking want a clear answer to the
conflicting security claims they hear from vendors. How can you be confident about the
security built into a product? Independent security evaluations against internationally-
established security criteria provide assurance of vendors’ security claims. Customer
expectation, in terms of service delivery and other key factors have increased
dramatically in recent years, as a result of the promise and delivery of the internet.
Information Communication Technology (ICT) has moderated the constraints of time,

space, and information access in world trade and commerce as a whole. Emerging trends
in socio-economic growth shows a high premium being placed on information and
communication technology (ICT) by homes, organization, and nations,
(www.nigeriabusiness ifo.org, 2007). The business of banking is basically about efficient
service delivery. Consequently, the introduction of facilities that enhance the delivery of
banking services such as mobile banking, internet, ATM in an effective manner is always
a welcome development. Mobile Banking has become an important issue, not only to
retain customers but also gaining a competitive advantage while maintain and growing
overall effectiveness. In the present banking system, excellence in customer service is the
most important tool for sustainable business growth.
26
The banking sector is considered to be an important source of financing for most
businesses. The common assumption, which underpins much of the financial
performance research and discussion, is that increasing financial performance will lead to
improved functions and activities of the organizations. The subject of financial
performance and e-banking into its measurement is well advanced within finance and
management fields. It can be argued that there are three principal factors to improve
financial performance for financial institutions; the institution size, its asset management,
and the operational efficiency [mobile -banking]. To date, there have been little published
studies to explore the impact of these factors on the financial performance, especially the
commercial banks (Central Bank of Oman, 2004).
According to Janice (2002) issues related to customers, development choices and

potential channel conflict need special attention. A critical assessment of these issues can
enable a bank to formulate the objectives of entering mobile banking services, make
strategic decisions on the services to be provided and the appropriate delivery channels to
deploy and manage these services efficiently.
Security, which may include protection of consumers' personal data and safe transactions
to prevent fraud, is paramount for the growth of any sort of online trade, including mobile
banking (Enos, 2001). Security in this context includes secure transactions as well as
secure front end and back end systems. Security also demands improvement of trust,
simplifying and integrating basic services such as banking and lending, personalisation
and customisation capabilities in order to provide each customer with unique offerings.
Other equally renowned researchers like Owens and Robertson (2000) have confirmed
that effectiveness of collaboration increases when stakeholders ‘have a shared purpose
which eventually opens up information sharing. By this, the product designed must take
into consideration the culture of the people especially the beliefs and the best ways they
can easily associate the product without much questioning and doubts. Besides giving
internal consideration on learning processes, other scholars have recognized that inter-
organizational learning is critical to competitive success, noting that organizations learn
by collaborating with other firms as well as by observing and importing their practices
27
(Shah et al, 2010). Additionally, Von Hippel (1988,) argues that a production network
with superior knowledge transfer mechanisms among users, suppliers, and manufacturers
will be able to ‘out-innovate’ networks with less effective knowledge-sharing routines.
Other scholarly works looks at adoption from critical point of customer perspectives. By
this perspective, Ghobadian (1994) indicates that the customer sought for quality with
less emphasize on cost and perceived quality and these two rather facilitate adoption
process. Sought quality is the level of quality customers explicitly or implicitly demand
and expect from service providers. The sought quality (customer expectations) is created
due to several factors – primarily, the expectations are formed during a previous personal
experience of a customer with a service, and the customer is influenced by the
experiences of the other users and by the image of an organization. Accordingly,
Ghobadian posited that the perceived quality emphasis on the overall impression a
customer has and experiences about the level of quality after service realization. By
extension, Khan (2001) indicates that the potential difference between the sought quality
and the perceived quality gives the service provider an opportunity to measure customer
satisfaction based on formulating the precise and actual criteria according to which the
customers are assessing the service.
Another critical point needed to be looked at involves issues relating to customers

awareness, customer readiness, the specific nature of ICT diffusion in the wider market,
and experience with electronic based transactions can also influence this path
(Jasimuddin, 2001). In addition, issues related to customers, development choices and
potential channel conflict need special attention (Janice 2002). A critical assessment of
these issues can enable a bank to formulate the objectives of entering mobile banking
services, make strategic decisions on the services to be provided and the appropriate
delivery channels to deploy and manage these services efficiently.
Perceived usefulness has been defined as “the degree to which a person believes that
using a particular system would enhance his or her job performance” (Davis, 1989, p.
320). Perceived usefulness is the primary precursor that determines the behavioral aim to
use a computer system (Venkatesh and Davis, 2000). Previous researches have shown
that perceived usefulness influenced computer usage directly (Ha and Stoel, 2009;
28
Huang, 2008; Sudha et al,2010). Once the consumers realize the importance of the
technology based alternate method of service delivery, the intention to adopt such
services would increase. According to (Akturan and Tezcan, 2012), perceived usefulness
directly affected attitudes towards mobile banking, and that attitude was the major
determinant of mobile banking adoption intention among 435 university students of
Turkey. The research conducted by (Amin, Baba, and Muhammad, 2007) on current
consumers of mobile banking in Malaysia, perceived usefulness was found to be a
significant determinant in the intention to adopt such services. The results of the research
performed by (Safeena,Hundewale, and Kamani, 2011) showed that perceived usefulness
was the important determinant of mobile banking adoption.
Perceived risk as defined by (Pavlou, 2001), “It is the user’s subjective expectation of
suffering a loss in pursuit of a desired outcome”. The quality of online services offered,
the possible risk of illegal activities and fraud has always been a concern for both
consumer and service providers (Ba and Pavlou, 2002). The risk factor as percieved by
bank consumers in electronic transactions may comprise of financial risk, service
performance risk, community risk, psychological risk, time risk, and physical risk
(Forsythe and Shi, 2003). According to (Dineshwar and Steven, 2013), perceived risk and
reliability were found to be the main obstacles to mobile banking usage in the African
country of Mauritius. Risk in mobile banking is perceived to be higher than conventional
banking because information exchange on wireless infrastructure, which produced
inherent doubts among consumers as hacking and other malicious attacks, might cause
financial and personal data loss (Yousafzai et al, 2003).
Venkatesh et al. (2003) defined social influence as the level to which a person perceives
that essential others believe he/she should exercise the technology. (Riquelme and Rios,
2010) surveyed 681 Singaporean consumers and concluded that perceived usefulness,
social norms and risks were three crucial factors influencing the adoption of mobile
banking. In an investigation of 158 customers from a major bank in Malaysia, (Amin,
Baba, and Muhammad, 2007) empirically established that person aim to use mobile
banking was significantly affected by community nearby them. Similarly, (Singh et al,
2010) exposed that individual’s decisions to accept mobile commerce services were
inclined by acquaintances and family members. The empirical research conducted by
29
(Yu, 2012) in Taiwan by sampling 441 respondents, the most significant predictor was
social influence, in the individual intention to adopt mobile banking.
Mahajan and Peterson (1985) defined an innovation as any idea, object or practice that is
perceived as new by members of the social system and defined the diffusion of
innovation as the process by which the innovation is communicated through certain
channels over time among members of social systems. Diffusion of innovation theory
attempts to explain and describe the mechanisms of how new inventions in this case
internet and mobile banking is adopted and becomes successful Clarke (1995). Sevcik
(2004) stated that not all innovations are adopted even if they are good it may take a long
time for an innovation to be adopted. He further stated that resistance to change may be a
hindrance to diffusion of innovation although it might not stop the innovation it will slow
it down.
In security caused by malicious persons; If the user of the m-banking is not conscious
about security, then chances that unauthorized transfer of money to other accounts or
withdrawal of cash from a user's account might be carried out by a malicious person like
what happen with the use of credit card where Standard Chartered Bank was probing a
multi-million unsecured loan scam involving fraudsters masquerading as Mulago
Hospital employees. 2007, Namirembe between July 11th and September 8th 2005; the
fraudsters had secured loans that were intended for Mulago Hospital employees. The
amount in the fraud case was $135,000, about UGX 250 million.
Fraud which is both internal and external; for example recent early this year, Telecom
company MTN lost approximately sh14b in its mobile money system .With the MTN
agents giving the required access codes to the thieves, who are external, and they later on
divide the money. (Uganda News by Jane Nambi May 23, 2012). This is taken as a threat
by the banking industry.
Finding talented mobile developers for a bank; “Mobile talent is incredibly scarce,” said
Matt Lehman, mobile business leader at Progressive Insurance, during a panel. Tom
Poole, managing vice president of digital channels at Capital One Financial Corp,
however, pointed out during that same panel that tech savvy people are less inclined to
30
work within finance Wisniewski, May 16, 2011). This calls for the need by the bank to
look externally for raw development talent.
Discoverability of m-banking is still plaguing the industry, In other words, consumers

aren’t even aware of their ability to use their phones to bank. (Wisniewski, May 16,
2011) Consequently, a pressing issue facing financial services players is how to get
marketing resources behind mobile banking rollouts.
There is a growing body of academic research examining the determinants of m-banking

acceptance and its utilization (Crabbe, Standing, Standing and Karjaluoto, 2009; Donner
and Tellez, 2008; Gu, Lee and Suh, 2009;Luarn and Lin, 2005; Mattila, 2003; Riquelme
and Rios, 2010). Studies have been conducted in various countries to better understand
consumers’ attitudes toward this emerging mobile technology. For example, Mattila
(2003) focused on the drivers and inhibitors of m-banking services. The author found that
complexity, compatibility, relative advantage, observability, and trialability are the
significant factors influencing consumer decision making in m-banking adoption. Also,
security and confidentiality of information are fundamental pre-requisites for any m-
banking services to be successful.
Another stream of research on m-banking is to understand the socio-economic and

technological impacts of m-banking adoption in developing countries. For consumers in
developed countries, m-banking can be a complementary service (additional platform for
managing financial transactions) offered by financial institutions in addition to ATMs
and Internet banking. Therefore, factors such as convenience and ease of use may
become an importance criteria when they consider adopting m-banking. However,
consumers in the developing countries, the appeal of m-banking may be less about
convenience, but more about accessibility and affordability due to network coverage,
quality connection, and costs (Donner and Tellez, 2008).
2.5 Relationship between mobile banking and financial performances

The service industries are mostly customer driven and the banking sector is one of the
competitive industries with continuous upgrading of skills, products and technology all in
the interest of retaining and wining customers. Given the nature of competition, survival
31
and profitability is highly dependent on quality of service and efficiency Mols (1998).
Mobile banking service has provided numerous benefits for both banks and customers.
The first benefits for the banks offering electronic banking service is better branding and
better responsiveness to the market. Those banks that would offer such services would be
perceived as leaders in technology implementation. Therefore, they would enjoy a better
brand image. The other benefits are possible to measure in monetary terms. The main
goal of every company is to maximize profits for its owners and banks are not any
exception.
Several arguments have been expanded in favour of Mobile banking having the ability to
sweep away the old laborious and non-effective means of banking. According to views
expressed by Mols (1998) it was indicated that the Internet is a revolution that will sweep
away the old order holds much sway. The internet revolution in Mobile banking
transaction is much cheaper than branch or even phone transactions. This could spur
yesterday’s competitive advantage - a large branch network, into a comparative
disadvantage, allowing mobile banks to undercut bricks-and-mortar banks.
Jen and Michael (2006) indicate that mobile banking has created unprecedented
opportunities for banks and businesses globally, in the ways they organize financial
product development, delivery, and marketing via the Internet. While it offers new
opportunities to banks, it also poses many challenges such as the innovation of IT
applications, the blurring of market boundaries, the breaching of industrial barriers, the
entrance of new competitors, and the emergence of new business models (Liao and
Cheung 2003).
Studies by Rikya (2007) and Han (2008) on the introduction of internet banking and
prospects for Bangledish concludes that the advent of technologies have really brought
information revolution in the society and that Internet Technology is rightly regarded as
the third wave of revolution after the agricultural and industrial revolutions. The advent
and adoption of the internet by industries has removed the constraint of time, distance
and communication making the globe truly a small village.
32
Rikta (2007) mentioned that in Bangladesh, Small Medium Enterprise (SMEs) owners
had to visit their lender an average of 15 times for a single loan. Han (2008) also found
the favourable impact of the application of informational technology on SME finance. He
mentioned that online SME businesses are more profitable and produce higher revenues,
than SMEs that use only traditional channel. Using Mobile banking reduces the required
visits a client has to make to a bank for transaction.
According to Rotchanakitumnuai and Speece (2003) electronic banking offers numerous

benefits to both banks, investors and individual bank clients ; can check account
balances, transfer money, pay bills, collect receivables and ultimately reduce transaction
costs and establish greater control over bank accounts. Customers need not visit banks for
banking transactions, providing round the clock services (Cheng et al., 2006). Customers
can apply for loans and do other banking services online (Smith and Rupp, 2003).
Mobile banking plays a major role in the economy by enabling sellers and buyers to
create economic value through the exchange of information, goods/services, and
payments by avoiding physical contacts (Bakos, 1998). Also, Mobile banking enables
banks to attract mobile customers and this offers tremendous profit potential by providing
mobile financial services. As indicated by Wind (2001) many banks are motivated to
implement Mobile banking by forces relating to the maximization of their earnings
through increased market scope and improved customer relationship due to product
delivery convenience and service customization.
The growth in credit card usage is attributable to Mobile banking. Now a customer can
shop worldwide without any need of carrying paper money with him. Banks are available
24 hours a day, seven days a week and they are only a mouse click away. The Cedar
group consulting firm (2004) survey reported that the Internet could play a major role in
transforming the workplace to enhance productivity by reducing operational cost and
improving employee relationships through improved service delivery. The investigators
noted that as the transformation progressed in the workplace the level of sophisticated
services also increased.
33
Generally, the concept of efficiency can be regarded as the relationship between outputs
of a system and the corresponding inputs used in their production. Within the financial
efficiency literature, efficiency is treated as a relative measure which reflects the
deviations from maximum attainable output for a given level of input (English M. and
Warng, 1992). Mobile banking (payment) plays an important role in e-commerce because
it closes the e-commerce loop. In developing countries, the underdeveloped electronic
banking [payments] methods are a serious impediment to the growth of e-commerce. In
these countries, entrepreneurs are not able to accept credit card payments over the
Internet due to legal and business concerns. The primary issue is transaction security.
(Tiwari, 2006).
Financial transaction cards have made great gains in the United States as a means to
attract financial accounts to financial institutions and, in the case of credit cards, as a
medium to create small loans and generate interest income for financial institutions.
Maintains customer contact, the business can maintain customer contact information for
follow up sales and marketing purposes, this is where by there will be improved relations
interns of strategies for the organization hence profitability (Gray,1994).Improved
sourcing, Electronic banking ( payment) leads to improvement in sourcing for example
cards are easy to be sourced by the buying organization and this gives the organization an
extensive base and assists in the selection of customers than would be done in manual
payment exercise (Saunders, 1997).
Reduced duplication, due to use of cards and cheques when paying creates an offer to
customers to obtain alternative credit cards, this helps in branding of products that are
used in banking institutions. Easy distribution, operating a business using mobile or
Electronic payment has drastically led to improvement in distribution of goods (Leader,
1997) says that this improves the flow of information, accuracy and proper movement of
goods due to increased use of computers to computer online payment along the supply
line. Transparency, according to Dobbler and Burt (1996) lament that the visibility of
total costs, customers can see the impact of factors such as e-exercise insurance and
carriage on the costs of goods being purchased, discount points and conditions applied
are also clear. Consequently an e-payment system enables buying to make better
decisions leading to increased profitability to financial institutions.
34
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction
This chapter deals with collection of data (the various sources of data for the study),
analysis and presentation of data. It outlines the methodology used in the study and it
include; research design to be employed, the survey population, sampling design,
sampling size, data collection methods, instruments that were used in the data processing
and analysis and the possible limitation of the study.
3.1 Research design

The research included the use of both quantitative and qualitative methods of data
collection with the use of a descriptive and correlational survey involving an ex post facto
design consisting of the use of interviews, questionnaires which were distributed to
various individuals at the selected branch Standard Chartered bank (Uganda). According
to Meyer (1999) this kind of survey (descriptive survey) is appropriate when a study is
collecting first hand data using either interviews or questionnaires and from respondents.
3.2 Population of thee study

This section included a collection of study units for which samples of interest were
possibly determined. The study population was; the study population which consisted
across sections of the finance, administration, disposal unit, data and information
department of the institution. The study population comprised of 50 representatives of
standard chartered bank of Mbarara branch, including bank manager & bank top
administrators, banking officers, account& finance department and bank customers.
These were chosen because these are the people who offer, receive and manage the
services respectively.
3.3 Sampling design and Sampling size

3.3.1 Sampling design
The purposive method of sampling was used for the study. This was dedicated by the
nature of the study which aimed at getting specific information from specific persons or
individuals.
35
According to the American statistical Association (1999) Purposive sampling is used to
select only those respondents considered to be key and resourceful in providing required
data. The purposive method of sampling was used to get members of staff from selected
departments for interview. The convenience method of sampling was also used for
talking to staff that were readily available.
Convenience sampling was also used to get information from respondents around
Mbarara Municipality. According to the American statistical Association (1999),
convenience sampling is used to select respondents that are easily approached and are
readily available. This technique was therefore used to select external users of financial
statements that are conveniently reachable.
3.3.2 Sample size

From selected branch of Standard Chartered bank (Uganda), 30 respondents were
interviewed and were categorized in different departments.
Table 1: Distribution of respondents according to their department
Category of Respondents No of Respondents
IT department staff 8
Accounts department 12
Other department 10
Total 30
Source; primary data (2014)

3.4 Data collection methods and instrument
3.4.1 Data source
The study used both primary and secondary data.
3.4.1 Primary data source; questionnaires and interview were the main source of data.
These questionnaires were distributed to staffs of the Standard Chartered bank (Uganda)
in different branches in Mbarara Branch. Primary data is regarded as the first hand
information collected from respondents.
36
3.4.2 Secondary data source; obtained from the banks records, financial reports, and
auditors’ letters to the management, previous research reports, journals, news papers,
newsletters and internet.
3.4.2 Collection methods and instrument

In ordered to exhaustively obtain and compile the collected data, it was necessary to
combine questionnaires and interview methods.
Questionnaire; during the study, one set of questionnaires was used both with closed and
open ended questions for staff of Standard Chartered bank (Uganda). The closed
questions were used to assist the researcher to check whether the information given was
correct and consistent. According to Kenyon, (1999), it easies data collection from
respondents who are literate enough to read and write.
Interview; this involved face to face discuss with specific respondents such as employees
and customers in a relaxed and conversational atmosphere. According to Trochim (1996),
the method of interview permits collection of first hand detailed information about the
themes of the study. In addition, it gave respondents a chance to answer questions
unlimitedly and flexibly and therefore is appropriate method to use to collect data from
key informants.
Documentary analysis; this method was used to help retrieve data from the secondary
sources which included archives of records containing financial reports and auditors’
letters to the management.
3.5 Data collection instruments

A structured interviews schedule were used in accordance with the main themes of the
study. (1996) Trochim observed that structured interviews schedules gives respondents
chance to answer all or some questions in an unlimited manner. Therefore a structured
interview schedule was developed in accordance with the main themes of the study.
Semi- structure questionnaires is preferred because as Kenyon (1999) argued, it can

permit either open or close ended or both types of questions, thereby giving respondents
freedom to answer all or some questions in details. It was also designed according to the
main themes of the study.
37
3.6 Data collection procedure
The researcher himself distributed the questionnaires to various respondents during the
study and he (researcher) made analysis during the interviews and collected all
questionnaires.
3.7 Data processing and analysis

After collecting the data from the field, the researcher edited the data to ensure that the
questions had been properly, correctly answered and consistent. Tables and figures were
used in presenting the findings. The frequency distribution tables were used to tabulate
data to show percentages calculated. The Pearson’s coefficient was used to establish the
relationship between the variables (using the SPSS and Excel program).
3.8 Limitation of the study

Confidentiality of information, the selected respondents were selective with their answers
due to fear of realizing important information to competitors.
Most of the respondents used a lot of technical terminologies language which were a bit
hard for the researcher to understand, thus the researcher required additional time to study
and understand the language.
The researcher faced a problem of scarce resources especially finances in terms of

transport and printing costs.
Time; the respondents were busy with routine work so they would not answer the
questionnaires in the required time. The research was also carried out during the study
period hence the time was against the researcher.
Bureaucracy of the administration in the bank made it hard for the researcher to reach the
sample target in time.
Some of the questionnaires distributed by researcher were not returned in time which
delayed the process of the research.
38
CHAPTER FOUR
PRESENTATION, DISCUSSION AND ANALYSIS OF FINDINGS
4.0 Introduction
The following chapter reports on the findings of the study that was carried out to examine
the m-banking technology used at Standard Chartered Bank; to examine the factors
influencing the adoption of mobile banking services at the Standard Chartered Bank and
to establish the relationship between m-banking and financial performance of Standard
Municipality.
The study was carried out in Standard Chartered Bank, Mbarara branch as was deemed
one of the giant financial institutions in Uganda sharing a wide coverage and perhaps
largely preferred various organizations and individuals as regards transacting businesses.
The chapter also presents the biographic characteristics of respondents.
4.1. Bio data information summary

This study was composed of mainly staff of Standard Chartered Bank Uganda from the
information technology department, Accounts department and few from other
departments of the bank. The researcher focuses on gender of respondent, age Bracket (in
years), marital Status, and level of education attained, department and work experience of
the respondent.
4.1.1 Gender
In order to establish the gender which frequently uses Mobile banking services, the
respondents where asked to state their sex. The results are as presented in table 2 below.
Table 2: The table below shows the sex/gender of the respondent.
Sex Frequency Percentages
Male 16 53%
Female 14 47%
Total 30 100%
Source: Primary Data2014
The table above shows female customers where more than male. Shows that 53% of the
respondents were male while the female respondents were 47%. This shows that there is
39
no gender discrimination on the employees of the bank. This is attributed to the fact that
female customers love direct contact with someone. It was also found out that they like to
deal with tellers for any of these transactions such that they know that their money is safe
rather than dealing with machines. To use an ATM to deposit money they consider it very
insecure that is why they continue to use banking halls than males who are very bold and
they can use mobile banking service without feeling insure.
4.1.2 Age bracket of the respondents.

The age of the respondents was relevant to establish the age bracket, which used the
mobile banking in most banking halls. The results are as in the table below.
Table 3: This table shows age bracket of the respondents
Age brackets Frequency Percentages
18-30 years 17 57%
31-50 years 12 40%
51-60 years 1 3%
Above 60 0 0%
Total 30 100%
The findings indicate that majority of the respondents which is 57% were in the age
bracket of 18-30years, 40% were aged between 31-50years old, only 3% of the
respondent in the bracket of 51-60 years old and none were above 60 years of age. This
means that employees of the bank are still productive (young and skilled) to handle the
changing technology of M-banking. It is also revealed that using the Mobile banking is
not the problem but banks do not put in a lot of effort to advertise these services which
creates that gap of usage. Recently most of the people in this age group own at least
computers so they can use the services however, they say that they also fill insecure due
to the internet fraud associated with the Mobile banking.
4.1.3 Marital status of the respondents.

Table 4: Showing Marital Status of the respondents
Marital Frequency Percentages
Married 15 50%
Single 11 37%
40
Others 4 13%
Total 30 100
Source: Primary Data 2014
Majority of the respondent or employee working with the bank were married 50%, the
single were 37% while others which may include divorced or separated were 13%.
Married people sometime tend to have a lot of responsibility and some difficulties to
balance work and family while the single employee may have more commitments
4.1.4 Education Level

In order to find out the knowledge respondents may have about these services, they were
asked to state their education level. The results are as below
Table 5: Showing distribution of respondents according to level of Education
Education level Frequency Percentages

Masters 7 23.3
Degree 23 76.7
Total 30 100.0
From the table above, the finding indicate out of a total of 30 respondents the majority 23
(76.7%) were degree holders followed by masters 7 (23.3%) no diploma or certificate
holders work with the bank. This means that employees of the bank are skilled or can be
easy be trained to handle the changing technology of M-banking.
Figure 1: shows education level of the respondents
41
Results show that most of the respondents where degree holders, which indicated that
information was obtained from well educated respondents as well as the Standard
Chartered bank staff is well educated. The respondents are familiar with the use of the
computers and it’s very easy for most of them to use the Mobile banking services. If the
person is not a computer irritrate, it is very easy for them to operate these services hence
increasing the usage, but most of them use ATM‟s and keep on ignoring the other
services.
4.1.5 Period worked of the respondents.

Table 6: Shows the period worked with the bank
Period worked Frequency Percentages
Less than 1 year 1 3.3
1-2 years 11 36.7
3-4 year 10 33.3
More than 4 years 8 26.7
Total 30 100.0
Source: Primary Data
From the table above out of a total of 30 respondents few employees 1 (3.3%) have
worked for less than 1 year, 36.7% for a period of 1-2 years, 33.3% worked for a period
of 3-4 years and 26.7% for more than 4 years. This means that the bank has a capability
of retaining majority of its employees who are skilled and with experience to deal with
m-banking or employees are comfortable with the bank technology.
Figure 2:Shows Period worked of the respondents
42
4.1.6 Department of the respondents.

Table 7: A Table showing department of the respondents
Category of Respondents Frequency Percentages
IT department staff 8 27%
Accounts department 12 40%
Other department 10 33%
Total 30 100%
Respondents from different IT department, accounts department and other department
were 27%, 40% and 33% respectively. This shows that the study response is dominated
by accountants who monitor the financial performance of the bank as the table and pie
chart below reveals.
Figure 3: A pie chart on department of the respondents
4.1.7 Period of banking with the organization
43
In order to ascertain how long these respondents shared a number of issues with the bank
and how they rate this organization to others, they were asked to state the period they
have banked with the organization. The results are as shown in table below
Table 8: Shows the period of banking with the bank
Period of banking with the bank Frequency Percentages
less than 3years 5 17
3-6years 10 33
7-9years 6 20
More than 9year 9 30
Total 30 100.0
Table above shows that most of the respondents have banked with the organization for
more than 3 years. Customer’s show that they have banked with the organization for a
long period of time and this is attributed to the good and excellent work done by the
organization. According to the respondents, the bank has tried to carter for their needs
that is to say; they have opened up more branches to help them ease their banking. They
have opened up over 100 ATM‟s such that customers save time without going to banking
halls, E- water payment systems to help them pay their pills in time and they have kept on
introducing a number mobile banking services to help them with their banking needs like
the introduction of Cente Mobile by the bank. There is a lot of confidence they put in
their bank and tell that they can be royal to the bank.
4.1.8 Accounts held

In order to establish how frequently they use the electronic banking services, customers
were asked to state the accountants they hold with the bank. Results are as shown in table
below.
Table 9: Shows the accounts held by the respondents

Accounts held with the bank Frequency Percentages
current account 17 42.5
fixed deposit account 5 12.5
savings Accounts 18 45.0
Total 30 100
44
Results indicate that customers held saving accounts and current accounts with the bank.
The respondents said that most of them opened those accounts in order to receive their
money electronically and easily. They could easily make transfers to other accounts
locally and internationally through online banking anywhere, anytime and it is supported
by (Moriss.c 2004) that the electronic banking services have extended banking to even
remote areas. They also said it was very easy to view their account balance with the new
services like Cente Mobile. It only works if you hold a saving or current account with the
bank. Making payments also becomes very easy and messages are sent to each customer
once a transaction is made.
4.2 To find out m-banking technology used at Standard Chartered Bank (Uganda)
using a case study of Mbarara Branch in Mbarara Municipality.
To study and evaluate how the m-banking technology works, the research focuses on the;
Understandability of the technology, accessibility of the services, functions of the
services, maintenance of m-banking and compare it with ATMs.
4.2 .1 Mobile banking defined
In a bid to generate accurate data from the targeted respondents, the researcher was
concerned about understanding how various respondents perceived the term “Mobile
banking methods”. The findings were as follows: Most respondents totaling to 25 (50%)
directly put it that “Mobile banking methods refers to a kind of payment where
customers/ clients access their credits through electronic machines like ATMs and
internet”. Other respondents summing up to 15 (30%) asserted that the term Mobile
banking refer to transfer of funds using systems that do not involve physical handling of
cash or cheques and the rest of the respondents 10 (20%) strongly argued that Mobile
banking refer to exchange of structured information by agreed standard from computer
application to another by electronic means and with a minimum of human intervention
4.2.2 Method of Mobile Banking Services.

The respondents were asked to indicate the method of Mobile banking services they
subscribe to in order to determine the popularity and patronage of products available.
Table below depicts the responses obtained.
Table 10: Banking Services Subscribed
45
Responses Respondents Percentage (%)
ATM / Card Services 28 95
Guaranty Trust electronic Notification System 26 88
(GeNS)
Statement by e-mail 24 80
Internet Banking 24 80
SMS Banking 11 38
E-zwich 11 37
Mobile Money 08 27
Source: Field Data, 2014
From the above Table above, it is clear that ATM and Card usage ranks top of the
electronic products patronized by the respondents, recording 95% of the responses. This
is followed by Electronic notification (GeNS), Internet Banking and Statement by e-mail
recording 88%, 80% and 80% respectively in that order. SMS Banking, E-zwich and
Mobile Money recorded 38%, 36% and 27% respectively.
Table 11: Methods(tools) in Mobile banking

Method Frequency Percentages
Use of credit cards 27 90
Use of internet banking 24 80
Use of E F T cards 26 88
Debit/ prepaid cards 25 82
Use of RTGS systems 6 20
Source: Field Data 2014
Use of credit cards, Majority of respondents totaling to 33.3% indicated that the use of
credit cards was an electronic payment method perhaps reliably used by Standard
Chartered Bank. These further stressed that a card is issued to a person or business
organization for goods and services as well as obtaining cash against the particular work
done for the business organization and these cards are so imperative to the organization
since they reduce on the creation of errors.
More respondents summing up to 80% asserted that that there is use of internet banking
and payment by Standard Chartered Bank (U) Limited clients. They however put that,
through this method has not been yet put to use by majority of the clients at a greater
expansion. It is still undergoing a promising progress as it is deemed to improve
flexibility of the institution.
46
Use of E FT (Electronic Fund Transfers) cards, this was supported by 88% respondents
who indicated that EFT cards is one of the electronic payment methods. They further
stressed that it provides clients with the options of transferring funds a from one account
to the other with the help of the bank with the consent of a client.
Debit/ prepaid cards, this was identified by 82% who strongly argued that various clients
in Standard Chartered Bank (U) Limited now utilize the function of debit or prepaid cards
whereby they put in that with such method concurs with people with drawing money
from or savings.
All in all use of credit cards was the most common electronic payment method that was
used by Chartered Bank (U) Limited clients as the researcher deemed views of the
respondents about the most common methods used by Standard Chartered Bank (U)
Limited. They further indicated that with the help of ATM machines payments has been
made easier to all clients and they easily access their credit at any time they wish thus this
has increased Standard Chartered Bank (U) Limited level of profitability.
4.2.3 Responses on whether one can access M-banking any time 24 hours
Table 12: A table showing one can access M-banking service any time 24 hours
Respondent Frequency Percentages
Strongly Agree 19 63
Agree 11 37
Not sure 00 00
Disagree 00 00
Strongly disagree 00 00
Total 30 100
The table above reveals that majority of the respondents (63%) strongly agree while 37%
agree that M-banking services can be access any time 24 hours. No respondent disagree,
strongly disagree or were not sure hence 0%. This reveals the bank employees are well
informed to handle m-banking.
47
Table 13: A table on respondent on payments of utility bills
Agree 04 13
Not sure 00 00
Disagree 00 00
Total 30 100
From the table above and graph below majority of the respondent 87% strongly agree that
payment of utility bills can be made using m-banking technology and the remaining 13%
also agree while none of the respondents disagree, strongly disagree or is uncertain (0%).
According to Quiros 2002 and Agadi, 2003 the use of electronic payment means increase
in customer connection to the internet eliminate geographical constraints and customer
may not need to access physically, implying that customers can have access to banking
services in any area at any time
Table 14: showing deposit/ withdraw money using Mobile phone

Agree 01 03
Not sure 01 03
Disagree 24 80
Total 30 100
Basing on the findings majority of respondent 80% disagreed that one can deposit or
withdraw money using mobile phone, 13% strongly disagreed, 3% were uncertain and
3% of the respondent agree.
4.3 To examine the factors influencing the adoption of mobile banking services at
the Standard Chartered Bank (Uganda)
4.3.1 Critical Success Factors
Result from Table below shows that 100% of the respondents believe that reliability of
net work, secured system, support from the top management and fast and responsible
Customer services Support are critical success factors for mobile banking adoption.
48
respondents representing 90% also listed promotion of mobile banking with the
organization has a critical success factor.
Table 15: showing the critical success factors for mobile banking adoptions
Responses Frequency Percentage
Reliability of net work 30 100
Secured system 30 100
Support from the top management 30 100
Fast and responsible customer services 27 90
Promotion of mobile banking with the 30 100
organization
Table 16: M-banking is coping with the ever changing customer expectations
Customer expectation Frequency Percentage
Agree 19 63
Not sure 00 00
Disagree 00 00
Total 30 100
Source: Primary data 2014
The graph and table above shows majority of the respondent 63% agree and also 37%
strongly agree that m-banking is a way of coping with the ever changing customer
expectation, the uncertain, those who disagree and strongly disagree were 0% meaning
that no one was uncertain, disagreed or strongly disagreed. The strength of electronic
payments using the mobile phone not only save time and money but it is also largely safe
Feb 20, 2011 New Vision
Table 17: M-banking was introduced to gain competitive advantage

Gain competitive advantages Frequency Percentage
Agree 16 53.3
Not sure 00 00
Disagree 02 6.7
Total 30 100
49
The findings shows that in the question whether M- banking was introduced to gain
competitive advantage, 53.3% agreed, 40% strongly agree while the remaining 6.7%
were uncertain and no one disagreed or strongly disagreed. This implies that SCB uses
electronic passwords that are hard to be penetrated by the hijackers so as prevent them to
break through making client’s money safe due to competitive advantages gain
Table 18: showing m-banking increase convenience to customer

Convenience Frequency Percentage
Agree 07 23
Not sure 00 00
Disagree 00 00
Total 30 100
The table above shows majority of the respondent 77% strongly agrees, 23% also agrees
that m-banking increase convenience to customer, uncertain/ not sure 0%, disagree and
strongly disagree 0% each. This implies that there is a need for the bank to improve on
the way it carries out their mobile banking in order to increase convenience to the
customer
Table 19: Table below shows M-banking transaction are kept confidential
Kept confidential Frequency Percentage
Agree 04 13
Not sure 00 00
Disagree 00 00
Total 30 100
Majority of the respondents 87% strongly agree that m-banking transaction are kept
confidential, the remaining 13% also agree, there were no respondents who were
uncertain 0%, neither disagree or strongly disagree (0%). This implies that SCB offer
quick services to its client which leads to customer satisfaction which is kept confidential.
50
Table 20: showing if respondent use bank’s mobile banking services
Use bank’s m-banking Frequency Percentage
Yes 29 97%
No 1 3%
Uncertain 0 0%
Total 30 100%
The table above shows majority of the respondent 97% use m-banking service and 3% do
not while no one was uncertain.
Table 21: showing respondent using m-banking services if not working with the
Bank
Consider using m- banking Frequency Percentage
Yes 26 87%
No 0 0%
Uncertain 4 13%
Total 30 100%
The findings reveals that majority of the respondents 87% would consider using m-
banking if no working in Standard Chartered Bank (Uganda), 13% were uncertain and
0% for no (that will not consider using m-banking service if not working with Standard
Chartered Bank (Uganda).
Table 22; Shows services offer by Standard Chartered Bank (Uganda)

Services Frequency Percentage
Money transfer across Account 7 23.3
11 36.7
Balance inquire
12 40.0
Making payments (utility bills)
30 100.0
Total
From table above, out of a total of 30 respondents the majority 12 (40.0%) were of the
view that the one can make payment bills via m-banking services, 11(36.7%) and 7
(23.3%) money transfer across account. This reveals that these are the serviced offered by
the bank.
51
4.4 The relationship between mobile banking and financial performance
Under this objective to establish the relationship between m-banking and financial
performance of standard chartered bank (Uganda), the study focuses on how m-baking
enables provision of quality services, impact of m-banking on financial performance
Table 23: The table below shows whether M-banking enables provision of better quality services
Strongly agreed 13 43
Agreed 15 51
Not sure 01 03
Disagree 01 03
Total 13 43
From the table above reveals that majority of the respondent 51% agree m-banking
enables provision of better quality services to customers by the bank, 43% strongly
agrees, while both uncertain/ not sure and those who disagree 3% each, strongly disagree
00%. According to Nasikye (2009) mobile phone offer far more cost effective channels
and hold great promise for making financial services reach much lower income and
remote client.
Table 24: below showing loss of data due to system failure is a risk to m-banking
Agreed 15 50
Not sure 08 27
Disagree 02 07
Total 30 100
From the findings on whether loss of data due to system failure can be a risk to m-
banking 10% of the respondent strongly agreed, 50% agreed, 27% were uncertain, those
who disagreed were 7% and those who strongly disagreed were 7%.
52
Table 25: The table below reveals, m-banking has led to increase in financial performance
Agreed 17 57
Not sure 01 03
Disagree 01 03
Total 30 100
From the table and graph above reveals that majority of the respondent agrees and
strongly agrees 57% and 37% respectively whether m-banking has led to improvement in
the financial performance, 3% disagreed and also 3% uncertain/ not sure.
Table 26: Showing whether the Mobile Banking systems in Standard Chartered Bank are timely
and adequate according to the customer’s emergency needs
Agreed 12 40
Not sure 03 10
Disagree 03 10
Total 30 100
Findings show that 30% of the respondents strongly agreed, 40% agreed 10% were not
sure, 10 disagreed and 10% strongly disagreed. Majority of the respondents interviewed
agreed with the statement; implying that the Mobile banking systems in Standard
Chartered Bank are timely and adequate according to the customer’s emergency needs
Table 27: Showing whether the ATM cards are renewed on time and the customers get informed on
time to acquire them
Agreed 10 33.3
Not sure 04 13.3
Disagree 03 10
Strongly disagree 01 3.4
Total 30 100
53
Findings reveal that 40% of the respondents strongly agreed, 33% agreed, 13.3% are not
sure, 10% disagreed and 3.4% strongly disagreed that the ATM cards are renewed on
time and the customers get informed on time to acquire them.
Table 28: Showing whether the Mobile banking systems are strong with electronic passwords that
are hard to be penetrated by the hijackers so as prevent fraud
Strongly agreed 10 33.3
Agreed 17 56.7
Not sure 00 00
Disagree 01 3.3
Total 30 100
Source: Primary data. 2014
Findings in table above reveal that 33.3% of the respondents strongly agreed, 56.7%
agreed, 3.3% disagreed and 6.7% strongly disagreed with the statement. This implies that
Standard Chartered Bank uses electronic passwords that are hard to be penetrated by the
hijackers so as prevent them to break through making clients‟ money safe.
Table 29: Showing whether the Customer is satisfied according to the way Standard Chartered
Bank carry out their Mobile banking systems
Agreed 10 33.3
Not sure 00 00
Disagree 06 20
Total 30 100
Findings indicate that 10% of the respondents strongly agreed, 33.3% agreed, 20%
disagreed and 36.7% strongly disagreed. Majority of the respondents strongly disagree
that the Customer is Satisfied according to the way Standard Chartered Bank carry out
their Mobile Banking systems and this implies that there is a need for the bank to
improve on the way it carries out their Mobile Banking systems.
54
Table 30: showing whether there is an increase in new customers as well as sustaining the loyal
customers at the same time due to the presence of adequate electronic systems in Standard Chartered
Bank
Agreed 15 50
Not sure 00 00
Disagree 01 3.3
Total 30 100
The findings from the above table of results show that, 40% strongly agreed, 50% agreed,
3.3% disagreed and 6.7% strongly disagreed that there is an increase in new customers as
well as sustaining the royal customers at the same time due to the presence of adequate
electronic systems in Standard Chartered Bank.
Table 31: showing whether there is conducive atmosphere in Standard Chartered Bank that
motivates the employees to work hard and thus offer good services like customer care to their clients
Strongly agreed 10 33.3
Agreed 15 53.3
Not sure 00 00
Disagree 02 6.7
Total 30 100
Source: Primary Data
Findings indicate that most respondents agreed that there is conducive atmosphere in
Standard Chartered Bank that motivates the employees to work hard and thus offer good
services like customer care to their clients, 33.3% strongly agreed, 53.3% agreed, 6.7%
disagreed and 10% strongly disagreed.
Table 32: Below shows Relationship of m-banking and financial performance
financial Mobile banking
performance of service that has/have
Standard helped the bank to
Chartered Bank record a good
(Uganda) performance
financial performance of Pearson 1 .326
Standard Chartered Correlation
55
Bank (Uganda) Sig. (2-tailed)  .079
N
30 30
Mobile banking service Pearson

.326 1
that has/have helped the Correlation
Sig. (2-tailed) .079 
bank to record a good
performance N
30 30

From table 26 above reject the null hypothesis and use H 1 which states that there is a
statistically significant relationship between mobile banking and financial performance
based on Sig (.079). The relationship is positive based on Pearson correlation (.326).
CHAPTER FIVE
DISCUSION, CONCLUSION AND RECOMMENDATIONS
5.0 Introduction
This chapter presents; The summary of findings under bio data information, each
objective, Conclusion and recommendations relevant to m-banking and attempt to
analyze whether the introduction of M-banking has improved on the banks financial
position and area of further study. Conclusions are the researcher's opinions depending on
the outcome from the data analyzed as per the objectives of the study. Recommendations are
56
the way forward resulting from conclusions and are very vital for policy making. Objectives;
to find out m-banking technology used at Standard Chartered Bank (Uganda) using a case
study of Mbarara Branch in Mbarara Municipality, to examine the factors influencing the
adoption of mobile banking services at the Standard Chartered Bank (Uganda) using a
case study of Mbarara Branch in Mbarara Municipality and to establish the relationship
between m-banking and financial performance of Standard Chartered
5.1 SUMMARY OF MAJOR FINDINGS

5.1.1 To evaluate how the m-banking technology work at Standard Chartered Bank
(Uganda),
It was revealed that m-banking service can be accessed any time 24 hours where one
need to register with the bank to access m-banking services provided by Standard
Chartered Bank (Uganda) and should maintain an account with the bank and also with the
mobile service provider. Majority of the respondents agreed that payment of bills can be
made through m-banking technology and that the system require continuous maintenance
although respondent disagreed on deposit and withdraw of money using mobile phone.
Majority of the respondents agreed that m-banking is not complicated and that it is easy
to understand but is less preferred to the use of ATMs machines.
The findings reveals that majority of the respondents 87% would consider using m-
banking if no working in Standard Chartered Bank (Uganda), 13% were uncertain and
0% for no (that will not consider using m-banking service if not working with Standard
Chartered Bank (Uganda). The graph and table above shows majority of the respondent
97% use m-banking service and 3% do not while no one was uncertain. majority of the
respondent 63% agree and also 37% strongly agree that m-banking is a way of coping
with the ever changing customer expectation, the uncertain, those who disagree and
strongly disagree were 0% meaning that no one was uncertain, disagreed or strongly
disagreed. The findings shows that in the question whether M- banking was introduced to
gain competitive advantage, 53% agreed, 43% strongly agree while the remaining 3%
were uncertain and no one disagreed or strongly disagreed.
Findings from the study indicated that Standard Chartered Bank has adopted e-banking
over the past six years as a business strategy in response to customer needs and the
57
changing marketing trends in the banking industry. Also the bank adopted e-banking due
to the tremendous benefits Mobile banking provides. Standard Chartered Bank offers
numerous e-banking services to its customers. Standard Chartered Bank offers e-banking
services such as ATM, POS, Visa Cards, MasterCard’s, Internet Banking, SMS Banking,
Email Transaction Notification, and Statement by email, Standard Chartered Bank
Automated Payment System, Check Writer and Mobile Money.
From the study 100% of the respondents subscribed to one form of mobile banking
product or the other. This is so because Standard Chartered Bank offers some of these
products at no cost to customers, these include Internet Banking, Statement by E-mail
and Guaranty Trust E-mail Transaction Notification (GeNS). Subscription to some of
these products (e.g. Statement by e-mail), are automatic as one opens an account with the
bank. This explains the 100% subscription to e-banking services recorded from the
survey.
5.1.2 To examine the factors influencing the adoption of mobile banking services at
the Standard Chartered Bank (Uganda) using a case study of Mbarara Branch in
Mbarara Municipality.
Majority of the respondents were m-banking literate and that they use the m-banking
service provided by the bank and also they would consider using m-banking service even
if they were not working with the bank. The bank had services such as money transfer
across accounts, balance inquiry, making payments (utility bills), phone banking and
buying airtime which according to the response, strongly agrees that the bank has the
ability to keep customers transaction secure and confidential. Majority of the respondent
agreed that m-banking is one way of coping with the changing customer expectations
since it From the table and graph above reveals that majority of the respondent 50% agree
m-banking enables provision of better quality services to customers by the bank, 43%
strongly agrees, while both uncertain/ not sure and those who disagree 3% each, strongly
disagree 0%. From the findings on whether loss of data due to system failure can be a risk
to m-banking 10% of the respondent strongly agreed, 50% agreed, 27% were uncertain,
those who disagreed were 7% and those who strongly disagreed were 7%.
58
From the table and graph above reveals that majority of the respondent agrees and
strongly agrees 57% and 37% respectively whether m-banking has led to improvement in
the financial performance, 3% uncertain and also 3% not sure. According to Nasikye
(2009) mobile phone offer far more cost effective channels and hold great promise for
making financial services reach much lower income and remote client. Majority of the
respondents reported that m-banking enables provision of quality services at less cost,
loss of data due to system failure is a risk to m-banking while The system has led to a
positive effect (increase) in the financial performance of the bank. The services offered or
forms of m-banking in Standard Chartered Bank (Uganda) have helped the bank to record
a good performance. This is revealing that m-banking is significant related to financial
performance that is determined by a number of factors such as customer satisfaction.
Findings from the study revealed that factors such as Cost Saving, Improvement in
Productivity, Improvement in Speed and Efficiency in service delivery, Revenue
generation and Increase in Market share and Market access were benefits Standard
Chartered Bank (Uganda) derived from its adoption of e-banking while customers
mentioned convenience, Time Saving, control over finances and cost effective way of
conducting banking transactions as benefits.
5.1.3 Findings on the relationship between Mobile banking and financial

performance
Findings indicate that 10% of the respondents strongly agreed, 34% agreed, 18%
disagreed and 38% strongly disagreed. Majority of the respondents strongly disagree that
the Customer is satisfied according to the way Standard Chartered Bank (Uganda carry
out their electronic systems and this implies that the relationship between Mobile banking
and customer satisfaction is weak. Findings revealed that there is a weak direct
relationship between Mobile banking and financial performance. The Pearson’s
correlation between mobile banking and financial stood at 0.79 which is a weak direct
relationship between the two variables. It is therefore true to say that Mobile banking has
a significant effect on financial performance.
5.2 Conclusion
59
From the findings of the study; it can be inferred that the introduction of m-banking has
contributed positively to the financial performances of banks in the industry. The service
of m-banking in standard chartered bank Uganda (balance inquiry, payment of bill,
transfer of money across account) among others which has made things simple for its
customers hence they are convenience and this has increased the level of transactions and
customer loyalty to the bank. To access m-banking service one need to register with the
bank at any nearest branch.
5.3 Recommendation
Based on the findings of the study, the researcher came up with recommendations whose
aim if implemented would enhance adoption and successful usage of mobile banking.
The bank should conduct research on other possible m-banking packages that are user
friendly and develop them such as deposit/withdraw of money using mobile phone which
will meet different customer requirements and capture market niches that competitors
have not identified hence expand on the market share leading to improved financial
performance.
Free training and refreshing training should be provided to staff of the bank and if
possible to customers to equip them with skills in the ever changing technology. The
bank should provide toll free line to enable customers who want to use the system and
also in case of any problem that deserve attention of the bank.
The banking industry with the Ministry of planning and development should capitalize on
this findings to eliminate customers’ misconception through sensitizing the community
that mobile baking was not a preserve for the few who have it.
This finding should be used by banks to popularize mobile banking as some people are
not aware of it or think that it is only meant for the privileged few.
Central bank of Uganda in conjunction with Ministry of Finance should use this finding
and launch a campaign to sensitive people on mobile banking security measures put in
place to protect them from fraudulent activities and also to make mobile banking popular
to all.
60
Central bank of Uganda and banking industry as a whole through this finding should see
a need for a comprehensive ICT policy that covers mobile banking.
The bank should come up with the mechanisms of preventing bank frauds especially
through technology
There is a need to increase on the number of ATM Booth of Standard Chartered Bank –
Mbarara branch; this would eliminate the problem of long queues in the bank and at the
ATM machines. The presence of adequate number of ATM machines will increase the
level of customer satisfaction hence building a stronger positive relationship between
mobile banking and Financial.
There is a need for the customer representatives for on-line services to improve on the
response to clients queries on a timely fashion; results indicated that customer
representatives for on-line services fairly respond to clients queries on a timely fashion.
The fair timely fashion response affects negatively the methods of electronic banking
employed at Standard Chartered Bank branch, for example telephone banking and
internet banking is affected negatively. Therefore, if the improves on the timely fashion
response, customers will be replied in time, get their services in time and this will
increase their level of satisfaction hence building a stronger positive relationship between
Mobile banking and financial Performance.
Standard Chartered Bank today have no other choice than to adopt Mobile banking in
order to enhance customer service delivery through the advancement in ICT if they are to
remain key players in the global banking system. This therefore requires banks to forge
partnership agreements with renowned ICT institutions in Uganda and abroad in
improving on the state of ICT in the industry and the economy at large.
As the level of literacy increase over the years, more people will find it difficult to ignore
the services offered by banks through this delivery channels. Management of banks
should ensure and continue to encourage the idea of computerizing Uganda and
Ugandans. Standard Chartered Bank in conjunction with Omatek, Del, Compaq, IBM
61
computers, can agree to support as part of efforts to computerize Uganda and Ugandans.
The idea will be an initiative in the provision of efficient and higher quality service and
also ensure the availability of rapid access to accurate, timely and current information.
Lastly, as customer is the essence of any business being, the development of these new
Mobile banking services (MBS) should be customer-centric (Customers‟ needs should be
the watchword right from idea conception, development and use of the services).
5.4 Area of further study

Further study should be done on the growth of m-banking in the dynamic financial sector
in Uganda. This will help to find out the growth of m-banking into the banking sector in
Uganda
M-banking and local population in the changing financial sector in Uganda, this will help
establish how the local population or users of financial services have reacted toward the
introduction of m-banking into the banking sector in Uganda.
How money transfer and mobile banking for the telecom companies like MTN mobile
money, Warid (warid-pesa), Airtel-money and others have affected commercial banks in
Uganda
Retail banks which refer to convention banks that offer services to individual from the
public and their contribution to customer satisfaction and the performance of the
commercial banks.
Research should also be carried out on how m-banking improve customer satisfaction. As
banks have carried out innovation on m-banking in order to achieve competitive
advantage, control costs, attract new customers, meeting the convenience of customers,
little is known about the influence of m-banking on the level of customer satisfaction.
The policy makers, ministry of finance, ministry of labor and human resource
development and mobile service providers should educate the masses more about the
benefits of integrating and using mobile technologies to enhance small businesses and
62
also the need to enhance technical capabilities of entrepreneurs to allow widespread use
of emerging technologies in SMEs.
Government support by way of legislations and infrastructure provision is essential for

creating the enabling environment for electronic banking to thrive in the country.
Banks’ staff and officials should be adequately trained in e-banking products and services
to be able to address customers’ needs and challenges.
Banks need to well package and market Mobile banking Products and services effectively
to customers to close the seemingly knowledge gap that exists among the populace with
regard to the benefits that can be derived from the services.
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Stichele (SOMO) (2010)
BBC News 28 May 2010
Black, N. J. & Lockett, A. & Winklhofer, H. & Ennew, C. 2001. The adoption of Internet
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CGAP (2006), Mobile Phone Banking and Low-Income Customers Evidence from South
Africa
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International Development.
Donner, J., & Tellez, C. A. (2008). Mobile banking and economic development: linking
Dr. Lennart, Söderberg (2008) mobile banking –financial services for the unbanked?
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APPENDIX
BISHOP STUART UNIVERSITY
QUESTIONNAIRE FOR STAFF OF STANDARD CHARTERED BANK
(UGANDA)
Dear Participants
I am Turihamwe Ambrose a student of Bishop Stuart University carrying out a research on
“mobile banking and financial performance of commercial bank using a case study of
Standard Chartered Bank Mbarara Branch”. The individual responses will be treated with
utmost confidentiality and will be for academic purpose only in fulfillment of my research
67
project. I humbly request to take some of your time to fill this questionnaire. Your
assistance will be of great value in the success of this research study. Thank you in
advance.
SECTION A
Background information (Please use a tick in the space provided)
1. Gender/Sex
(a) Female (b) Male
2. Age Bracket (in years)
(a) 18-30 (b) 31-50
(c) 51-60 (d) Above 60
3 Marital Status
(a) Married (b) Single
(c) Others ……………………………………………………………………
4. Level of Education you have attained

(a) Masters (b) Degree
(c) Diploma (d) Certificate
5 For how long have you been working in Standard Chartered Bank (Uganda)?
(a) (Less than 1 year (b) 1-2 years
(c) 3-4 year (d) More than 4 years
6 Position Held (department) …………………………………………………………
7. Do you have a bank account?

(a) Yes (b) No
8. The period of banking with the bank when using Mobile banking?
a. less than 3 years b. 3 year to 6 years c. 7 year to 9 years
d. more than 9 years
68
SECTION B: TO FIND OUT MOBILE BANKING TECHNOLOGY USED AT
STANDARD CHARTERED BANK (UGANDA) MBARARA BRANCH IN
MBARARA MUNICIPALITY.
9. Do you know the meaning of Mobile banking?
a) Yes b) No
10. If yes, what do you understand by the term Mobile banking?
………………………………………………………………………………………………
………………………………………………………………………………………………
11. If yes, what are the different types/ methods used in Mobile banking by Standard
Chartered Bank (U) Limited?
a) ATM/Debit cards Services
b) Use of internet banking
c) Use of electronic telephones
d. SMS Banking Services
e. Email notification services
Any other, (specify)
i)……………………………………………………………………………………………
ii)………………………………………………………………………………………….
12. What of the above tools are most used by Standard Chartered Bank (U) Limited?
………………………………………………………………………………………….
…………………………………………………………………………………………
(Please use a tick in the space provided)

13. Questions Strongly Agree Uncertain/ Disagree Strongly
Agree not sure Disagree
One can access mobile banking services

any time 24 hours?
One can deposit or withdraw money
using the mobile phone
Payment of bills can be made through
M-banking technology at SCB
69
SECTION C: TO EXAMINE THE FACTORS INFLUENCING THE ADOPTION OF
MOBILE BANKING SERVICES AT THE STANDARD CHARTERED BANK
(UGANDA) USING A CASE STUDY OF MBARARA BRANCH IN MBARARA
MUNICIPALITY
14. What are the critical success factors for adopting mobile banking services?
a. Reliability of network b. Secured Systems
c. Support from top management d. Fast and responsive customer service
e. Promotion of mobile banking within the organization
15.Question Strongly Agree Uncertain Disagree Strongly
Agree / not sure Disagree
M-banking is one way of coping with the

ever changing customer expectations
Mobile banking was introduced to gain
competitive
Mobile banking increase customer

satisfaction access to the banking services
as well as convenience
The bank has the ability to keep customers
Mobile banking transaction confidential
16. Do you use bank’s mobile banking services?
Yes No Uncertain
17. If you were not working in Standard Chartered Bank (Uganda), would you consider using its
mobile banking services?
Yes No Uncertain
18. Services offer by Standard Chartered Bank (Uganda) through M-banking include;
Money transfer across Account Others (name them please)
…………………………………….
Balance inquire ……………………………………...
70
…………………………………….
Making payments (utility bills)
Depositing & Withdrawing,
SECTION D: MOBILE BANKING AND FINANCIAL PERFORMANCE

19. Statement Strongly Agree Uncertain/ Disagree Strongly
Agree not sure Disagree
Mobile banking enables the bank to

provide better quality services at less
cost
Loss of data due to system failure is a
risk to mobile banking
Mobile banking has led to increase in

the financial performance of the bank
The Mobile Banking systems in SCB

bank are timely and adequate
according to the customer’s emergency
needs.
The ATM cards are renewed on time
and the customers get informed on
time to acquire them.
The Mobile banking systems are strong
with electronic passwords that are hard
to be penetrated by the hijackers so as
prevent fraud.
Customer is satisfied according to the
way SCB carry out their Mobile
banking systems.
There is an increase in new customers
as well as sustaining the royal
customers at the same time due to the
presence of adequate electronic
systems in SCB bank.
There is conducive atmosphere in SCB
that motivates the employees to work
hard and thus offer good services like
customer care to their clients
71
20. Comment on the M-banking effect on the financial performance of Standard Chartered Bank
(Uganda)
……………………………………………………………………………………………………....
………………………………………………………………………………………………………
21. What particular Mobile banking service has/have helped the bank to record a good
performance?
……………………………………………………………………………………………………...
……………………………………………………………………………………………………..
……………………………………………………………………………………………………..
72

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MOBILE BANKING AND FINANCIAL PERFORMANCE OF COMMERCIAL

BANKS IN UGANDA. CASE STUDY STANDARD CHARTERED BANK

(UGANDA) LIMITED MBARARA BRANCH

A RESEARCH REPORT SUBMITTED TO THE FACULTY OF BUSINESS AND

DEVELOPMENT STUDIES IN PARTIAL FULFILLMENT OF

REQUIREMENTS FOR THE AWARD OF BACHELORS’

DEGREE IN BUSINESS ADMINISTRATION OF

BISHOP STUART UNIVERSITY.

SIGNATURE ………………………………………DATE ……………………………

SIGNATURE …………………………………… DATE ………………………………

BOU Bank of Uganda

MTN Mobile Telephone Network

Stanchart Uganda Standard Chartered Bank (Uganda) Limited

E-banking Electronic Banking

M-transactions Mobile Transactions

ICT Information Communication Technology

PDA Personal Digital Assistant

ATM Automatic Teller Machine or Automated Teller Machine

E-commerce Electronic Commerce

E-funds transfer Electronic Funds Transfer

SMS Short Message Services

CAMELS (Capital adequacy, Asset quality, Management, Earning,

Liquidity and Sensitivity analysis)

US$ United States of America Dollar

Conclusion and recommendation were made towards strengthening the contribution of m-

1.1 Background of the Study

1.2 Problem Statement

1.3 Purpose of the study

1.4 Objectives of the study

1.6 Scope of the study

1.6.2 Geographical scope

1.6.3 Time scope

1.7 Significance / justification of the study

According to Dr Lennart, Soderberg, 2008 m-banking is the term we use to describe

Telephone Banking : "Telephone Banking (Telebanking) can be considered as a form of

Personal Computer Banking: Personal Computer (PC) Banking is a service which

Branch Networking : Networking of branches is the computerization and inter-

Free e-Statements: Customers receives free e-statements daily, weekly or monthly

2.3 The factors influencing the adoption of mobile banking services

Information Communication Technology (ICT) has moderated the constraints of time,

According to Janice (2002) issues related to customers, development choices and

Another critical point needed to be looked at involves issues relating to customers

Discoverability of m-banking is still plaguing the industry, In other words, consumers

There is a growing body of academic research examining the determinants of m-banking

Another stream of research on m-banking is to understand the socio-economic and

2.5 Relationship between mobile banking and financial performances

According to Rotchanakitumnuai and Speece (2003) electronic banking offers numerous

3.1 Research design

3.2 Population of thee study

3.3 Sampling design and Sampling size

3.3.2 Sample size

Source; primary data (2014)

3.4.2 Collection methods and instrument

3.5 Data collection instruments

Semi- structure questionnaires is preferred because as Kenyon (1999) argued, it can

3.7 Data processing and analysis

3.8 Limitation of the study

The researcher faced a problem of scarce resources especially finances in terms of

4.1. Bio data information summary

4.1.2 Age bracket of the respondents.

4.1.3 Marital status of the respondents.

4.1.4 Education Level

Education level Frequency Percentages