http://ijfr.sciedupress.com International Journal of Financial Research Vol. 13, No. 4; 2022 Published by Sciedu Press 16 ISSN 1923-4023 E-ISSN 1923-4031 The Role of Digital Banking Services on Commercial Banks Performance in Somalia: A Descriptive and OLS Approach Abdulkadir Mohamed Nur 1 1 School of Economics, University of Nairobi, Nairobi, Kenya Correspondence: Abdulkadir Mohamed Nur, School of Economics, University of Nairobi, Nairobi, Kenya. E-mail: abjeele@students.uonbi.ac.ke Received: August 11, 2022 Accepted: September 27, 2022 Online Published: October 12, 2022 doi:10.5430/ijfr.v13n4p16 URL: https://doi.org/10.5430/ijfr.v13n4p16 Abstract The main objective of this study is to examine the role of digital banking services on commercial banks’ performance in Somalia. A descriptive research design was used in this study to illustrate the relationship between variables. The study selected 300 participants using stratified random sampling. The study employed the Kobo-collect tool to collect data from the field. SPSS v28 and Eviews12 data analysis tools were employed in this study. The ADF test results show that all variables are stationary in the first difference with a constant and trend for each of the three critical levels. Pearson chi-square statistics showed that the association between explanatory variables and commercial banking performance is statistically significant. Descriptive statistics showed that the skewness and kurtosis of the normal distribution of probability are best to fit and close to zero using the Jarque-Bera test. Positive kurtosis values suggest a peaked distribution with long, fatty tails, and it proposes that a large proportion of numbers are concentrated in its tails rather than its centre. The regression result gives the impression that the explanatory variables determine 86% of the overall variance in commercial banks’ performance. The correlation results showed a strong and significant positive correlation between digital banking service delivery and commercial banks' performance in Mogadishu, Somalia. Keywords: digital banking, payments infrastructure, customer’s adoption and commercial banks ' performance 1. Introduction The growth of technology has led to the digitization of the planet. The financial sector's development and competitiveness may be attributed to technology's role in digitalization. As a result, conventional financial institutions, such as banks are challenged (Gerlach & Lutz, 2021). The financial industry has seen drastic transformations due to technological advancements, making financial services more readily available. Digital money, online banking, digital payment systems, e-finance, e-wallets, and more are transforming the financial industry as it moves from fiat currency to the digital era. The financial industry is increasingly being transformed by these constant advances (Palmié et al., 2020). The new digital drifts are largely responsible for the digital transformation of financial institutions, which has led to significant changes in economic systems (Khan et al., 2021). Banking is only one of many industries where technology has made or broken people's lives and careers. Astonishing technical advancements have taken place during the previous several decades. A lasting imprint on anything and everything that the human mind can conceive. It is already widely known that the advancement of technology in the banking industry gave rise to payment systems. To put it simply, digital banking uses technology to make financial transactions easier. It encompasses internet banking, electronic banking, and mobile banking, commonly used phrases (Sardana & Singhania, 2018). This study looks at how digital banking services affect Somalia's financial institutions' financial stability and customer satisfaction. With the advent of digital banking, individuals and businesses may now examine transactions, download statements, and conduct financial transactions without physically visiting a bank (Boniface & Ambrose, 2015). In the recent decade, Kenya's financial services industry has dramatically shifted toward digitalization and financial inclusion. M-PESA, Agency Banking, Online Banking, ATM credit/debit cards, and M-Shwari have been recorded as notable digital service sector innovations (Heyer & King, 2015). Transformative changes have been occurring in the banking industry. Innovations in information technology are driving this banking industry transformation. Today's global change curve of electronic banking in Kenya is centered on information and communication technology. In light of this, this study examined the relationship