PRODUCT DIVERSIFICATION STRATEGIES AND ITS IMPACT ON PERCEIVED FINANCIAL PERFORMANCE IN NEPALESE COMMERCIAL BANKS

Abstract

This study investigates the impact of product diversification strategies on the perceived financial performance of Nepalese commercial banks. It aims to assess how different diversification strategies—Credit Access (CA), Deposits (D), Remittances (R), and Mobile and Internet Banking (MIB)—affect financial outcomes. Data were collected from 80 bank employees through structured questionnaires, complemented by secondary data from relevant literature and bank reports. The study employs regression and correlation analysis to examine these relationships. The findings reveal that Mobile and Internet Banking (MIB) significantly enhances perceived financial performance, indicating the critical role of digital banking services in the modern banking landscape. Conversely, Credit Access (CA), Deposits (D), and Remittances (R) did not show significant impacts on financial performance. These results suggest that while traditional banking services remain essential, their contribution to financial success is less pronounced compared to digital services. The study concludes that targeted digital diversification is crucial for improving perceived financial performance in Nepalese commercial banks. This strategic focus on digital services is essential for maintaining a competitive edge and ensuring sustainable financial success. The findings provide valuable insights for bank managers, policymakers, and researchers, emphasizing the importance of embracing digital transformation to enhance financial stability and customer satisfaction. By prioritizing digital innovations, banks can achieve long-term growth and remain competitive in an evolving financial landscape.