A CROSS-SECTIONAL STUDY ON THE RELATIONSHIP BETWEEN MONITORING OF BANKING ACTIVITIES AND OPERATIONAL PERFORMANCE OF SELECTED COMMERCIAL BANKS IN KAMPALA, UGANDA.
DOI:
https://doi.org/10.70572/agp.v2i5.89Keywords:
Monitoring, Banking Activities, Operational Performance, Commercial Banks, KampalaAbstract
Background.
Effective risk management identified through audits helps banks anticipate and mitigate potential risks, safeguarding their operational stability and resilience. This study examined the relationship between monitoring banking activities and the operational performance of selected commercial banks in Kampala, Uganda.
Methodology.
The study followed a descriptive, correlational, and cross-sectional survey design. Employed a mixed research approach, utilizing both quantitative and qualitative methods to collect and analyze numerical and non-numerical data in alignment with the study objectives. Using a target population of 300 individuals, a sample size of 169 respondents was derived based on the Morgan and Krejcie (1970) table. Simple random sampling and purposive sampling techniques were used to select the respondents. Data for this study were collected from both primary and secondary sources. Primary data were obtained using questionnaires and scheduled interviews.
Results.
79 (52.7%), held a Bachelor’s degree, Operational staff made up the largest proportion, with 65 participants (43.3%). The findings from the study showed a strong positive relationship between monitoring and operational performance (r = 0.866, p = 0.000) of commercial banks in Kampala. During the interview with one manager of the selected commercial banks, he said, "In our bank, the level of monitoring is adequate in terms of compliance checks and periodic reporting. However, I would describe it as moderate because while routine reviews are conducted, we lack real-time monitoring systems that could flag operational inefficiencies early.
Conclusion
The high correlation between monitoring and operational performance affirms that more robust, continuous, and predictive monitoring systems can significantly strengthen bank operations, risk management, and regulatory compliance.
Recommendation.
Commercial banks should enhance Real-Time and Predictive Monitoring Systems. These systems will enable banks to detect emerging risks, operational inefficiencies, and compliance issues promptly, allowing for quicker decision-making and more effective responses to challenges.
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