THE EFFECT OF CORE BANKING SYSTEMS ON NON FINANCIAL PERFORMANCE OF COMMERCIAL BANK OF ETHIOPIA

Abstract

This research aimed at finding out the effect of core banking Information technology system on performance of commercial bank of Ethiopia as a case study. It used customers’ satisfaction and employees’ performance/efficiency as independent variables to measure performance of the bank and to conduct the study convenient sampling technique was used in the selection of each respondent from the commercial bank of Ethiopia. Thus a total of 182 respondents participated from customers and 125 respondents participated from employees and structured questionnaire was used to collect relevant data for the research. The data gathered through the questionnaire was analyzed by Statistical Package for Social Science (SPSS). T-statistic test was carried out to determine the significance of the independent variables on dependent variable. Simple linear regression analysis was also carried out to determine the effect of the independent variables on dependent variable. It was found from the research that core banking Information Technology system indeed has a positive significance impact on non-financial performance of commercial bank of Ethiopia in respect with satisfying their customer and improve their employees’ performance. The simple linear regression analysis also showed a positive coefficient of 0.623 and 0.970 for customer satisfaction and employees performance respectively, which simply mean that there is strong positive relationship between core banking Information Technology system and customers’ satisfaction and employees’ performance of the banks. In general, core banking Information Technology system has positively impacted on non-financial performance of commercial bank of Ethiopia. Finally, recommendations were forwarded based on the major findings so as improve system the bank to continue explore and implement sustainable business linkages and collaborations with core banking system.