Digital Transformation, Customer Perception and Performance of Retail Banking Among Commercial Banks during Covid-19 Pandemic in Kampala Central District.
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Date
2025-10-23
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Makerere University Business School
Abstract
Retail banking plays a crucial role in the financial sector and is central to the growth strategies of many institutions. However, despite its importance, banks in Uganda face challenges in effectively implementing customer onboarding programs. This study examined the relationship between digital transformation, customer perception, and the performance of retail banking among commercial banks in Kampala. A cross-sectional study design with a quantitative approach was adopted, involving 10 employees responsible for managing customer interactions and using internal retail banking systems from each of the 26 retail commercial banks in Kampala Central. The study achieved a 100% response rate from the banks and a 96% response rate from the employees. The findings reveal a significant positive association between digital transformation and retail banking performance (r = 0.545, p < 0.01), as well as between customer perception and retail banking performance (r = 0.489, p < 0.01). The combined effect of digital transformation and customer perception explained 62.5% of the variance (R² = 0.625, p < 0.01) in retail banking performance. Among the independent variables, digital transformation showed the strongest predictive power. The study recommends that retail commercial banks integrate digital transformation with customer engagement rather than treating them as separate initiatives. When digital innovation is paired with a strong focus on customer needs and perceptions, it can significantly increase both customer satisfaction and overall bank performance.
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This is a master's thesis.