Examining the Correlation between Financial Innovations and Commercial Bank Performance: A Case Study of BPR Headquarters in Rwanda (2020-2022)

The study aimed to assess the impact of financial innovations on the performance of commercial banks in Rwanda, focusing on BPR (Bank Populaire du Rwanda) headquarters from 2020 to 2022. The research had three specific objectives: identifying financial innovation best practices at BPR, assessing its performance during the period, and determining whether a statistically significant correlation exists between financial innovations and the bank’s performance. A mixed research design, combining both quantitative and qualitative research designs was employed, with 25 purposively selected respondents. Data collection tools included questionnaires, interviews and document reviews, while data analysis was conducted using descriptive statistics (mean and standard deviation) and Spearman’s correlation coefficient. The findings revealed that BPR implemented effective financial innovations, notably in mobile banking (mean = 3.86), internet banking (mean = 3.46), ATMs (mean = 3.75), and the BPR app (mean = 4.2). The financial performance showed positive growth across several key indicators: Return on Assets (0.94% in 2020 to 2.98% in 2022), Return on Equity (7.97% to 18.56%), and Net Interest Margin (6.38% to 7.99%). Liquidity ratios and debt ratios also improved, reflecting the bank's strong financial health. A high Spearman correlation coefficient of 0.820 confirmed a strong, positive relationship between financial innovations and BPR's performance. The study concluded that BPR should strategically enhance electronic loan offerings, encourage the use of digital payments, and continue improving ATM services to sustain its positive performance