Technological Innovation and Commercial Banks' Financial Performance: A Mediation Analysis of Risk Management Practices

Abstract

The purpose of the study is to investigate the association between technological innovations and the financial performance of commercial banks using risk management practices as a mediator. The study's primary focus was on commercial banks in Uganda's Kampala Central region. A quantitative method was used to adopt a cross-sectional survey design. The study selected bank employees from 24 Kampala-based commercial banks using the convenience sampling technique. To accomplish the study's goals, mediation analysis were done using Baron and Kenny, while correlation, regression and inferential statistics were examined using the Statistical Package for Social Scientists (SPSS) PROCESS MACRO. The results of the study showed that the study variables had a significant positive association. The results of the regression show that risk management techniques and technological innovation are predictive of financial performance. The results showed that risk management procedures significantly impacted the connection between technological innovation and financial performance. Results also indicate that the association between financial performance and technological innovation is mediated by risk management strategies. The study provides many implications for management and theory.