The impact of the Electronic Fund Transfer Systems (EFTS) on banks performance in the Kingdom of Bahrain

The Central Bank of Bahrain in conjunction with Benefit Company revolutionized the Electronic Fund Transfer System (EFTS) in 2015 with the sole aim of enhancing banks performance and increasing customer’s satisfaction. The main purpose of this study is to investigate the relationship between ROA, ROE, and fee-based income with the newly introduced Electronic Fund Transfer System (EFTS). The sample consisted of three commercial banks and three Islamic banks, with a target population consisting of an aggregate of all commercial banks and Islamic banks that are licensed and regulated by the Central Bank of Bahrain. This study used secondary data from banks annual reports and primary data from reports provided by Benefit Company. This study collected data for a period of four years spanning 2018 to 2021. The data collected is analyzed by using Stata and specifically using fixed effect model, random effect model, feasible generalized least squares (FGLS), Hausman test, and autocorrelation. The study revealed that there is a negative relationship between fee-based income and the values of the electronic fund transfer systems, and no impact on returns on assets and returns on equity.