THE IMPACT OF BRANCHLESS BANKING SYSTEM ON THE FINANCIAL PERFORMANCE OF THE COMERCIAL BANKS IN PAKISTAN

Abstract

The purpose and goal of this research paper was to assess the impact of branchless banking on commercial banks' financial results in Pakistan. The research focused on the financial performance of commercial banks through agency banking and electronic banking platforms. The analysis also explores the mediatory effects on the relationship between branchless banks and the financial results in Pakistan from financial integration, and also the moderating influence of government policy. The thesis took a non-experimental style in exploratory testing. A survey was carried out in Pakistan of all 49 scheduled commercial banks. The annual reports of the various commercial banks and the Central Bank of Pakistan collected primary and secondary data and financial performance of banks. As the principal predictor of commercial banks' financial success, the Return on Assets (ROA) has been derived from SBP’s annual reports. As metrics for agencies and electronic banking, the volume of expenditure in agency and electronic banking was used. Results from this study also suggest that financial inclusion depends on the strength of the connection between branchless banking and financial success in Pakistan. Findings suggest that the relationship between the agencies and electronic banking and financial success is partly moderated by government policies, with an impact substantial to the level of 5%. The study suggests that commercial banks invest both in agency and in electronic banking as a multi-channel approach for positive returns, since these networks are mutually complementary.