Abstract:
The main objective of this study was to establish the contribution of banking innovation to the financial performance of banks in Rwanda. The specific objective of the study is to assess the effectiveness of bank innovations used by BANK OF KIGALI PLC and to determine the contribution of bank innovations on financial performance of BANK OF KIGALI PLC. The sample size of the study is 100 selected from 21,892 customers of Bank of Kigali Plc. The data collection techniques are questionnaire, interview, observation and documentation techniques. For analyzing the data the historical, comparative and analytical methods were used. The findings shows that in 2021, there was a decrease of 0.01% or 1 ATM from the previous year‟s total. This minor decrease might be due to various factors, such as budget constraints or operational changes. However, in 2022, there was an increase of 0.05% or 5 ATMs compared to the previous year‟s total. This growth indicates that BK GROUP PLC has
continued to expand its ATM network despite the slight decline in 2021. The most significant growth occurred between 2020 and 2021, with an increase of 103 ATMs (or 0.02%) in the network. This expansion suggests that BK GROUP PLC considered automation and self service technologies essential for their banking services during this period. The ratio of return on assets during the covered period. The return on asset means that in 2020 the investors generated 2.9 Frw while in 2021 the return on asset increased to 3.3 Frw and it becomes 3.2 Frw in 2022 and 3.5 Frw in 2023. This shows that BANK OF KIGALI PLC is profitable since there is a persistent increase of return on average assets as a result of application of Banking Innovations and the researcher advice BK to increase return on assets in order to Payback the interest of its shareholders. The equity the bank has generated 100 RWF invested in equity the bank has generated 15 Frw in 2020 while in 2021 the investors generated 18 Frw and 19 Frw in 2022, 20 Frw in 2023. All this shows that there is a good Banking Innovations which will push the investors continuity to invest and increase the capital of BANK OF KIGALI PLC. As we seen in findings of this table ROE reduced year to year because BK increases its total assets where we advise BK to increase also its net income in order to increase return to the shareholders. In addition, shows how BK paid the yearly income returned on equity invested by its shareholders. The researcher recommended that BK should improve network as the way of better using baking innovation, BK should search for modern software which helps in the case of continuing to serve customers in advanced way and BANK OF KIGALI PLC should increase network in order to avoid low connection in its online services.
