Digital Innovations and Performance of Commercial Banks in South Sudan.
DOI:
https://doi.org/10.55077/edithcowanjournalofstrategicmanagement.v9i1.153Keywords:
Digital innovation, mobile banking, internet banking, fintech integration, bank performance, commercial banks, South SudanAbstract
Purpose of the Study: This study examined the effect of digital innovations namely mobile banking, internet banking, ATM and card services, and FinTech integration on the performance of commercial banks in South Sudan, with bank performance operationalized as customer deposit growth.
Problem Statement: Despite a regional and global shift toward digital banking as a driver of efficiency, profitability, and financial inclusion, commercial banks in South Sudan continue to record weak performance, evidenced by a return on assets below 0.5%, a cost-to-income ratio above 75%, and customer deposit growth of only 4.2% between 2020 and 2022, well below the East African regional average of 12.6%. Whether and how digital innovation translates into measurable performance gains in this fragile, post-conflict banking environment remains empirically under-investigated.
Methodology: The study adopted a correlational research design and a longitudinal panel data approach covering 2019–2025. The target population comprised all 31 licensed commercial banks in South Sudan, surveyed through a census approach. After data cleaning, a balanced panel of 117 bank-year observations from 17 banks with complete records was retained. Secondary data were extracted from audited bank financial statements and Bank of South Sudan publications, and analyzed using a Fixed Effects panel regression model with robust standard errors in Stata.
Results: Mobile banking had a positive and statistically significant effect on customer deposit growth (β = 0.826, p < 0.000); internet banking had a positive and statistically significant effect (β = 0.056, p < 0.000); ATM and card services had a negative and statistically insignificant effect (β = -0.025, p = 0.612); and FinTech integration had a positive but statistically insignificant effect (β = 0.230, p = 0.242). The model explained approximately 87.0% of the variation in customer deposit growth (R² = 0.870, F = 645.92, p < 0.000).
Conclusion: Mobile banking and internet banking are significant drivers of customer deposit growth and, by extension, bank performance in South Sudan, while ATM and card services and FinTech integration have not yet produced statistically significant effects, largely owing to infrastructural, regulatory, and technological-readiness constraints.
Policy Recommendation: Commercial banks in South Sudan should prioritize investment in mobile and internet banking platforms while simultaneously addressing the infrastructural and regulatory bottlenecks limiting the performance contribution of ATM, card, and FinTech services. The Bank of South Sudan should support digital financial inclusion through enabling regulation and infrastructure investment.
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