Assessing the impact of information techology on the productivity of commercial banks | |
| Author | Shrestha, Pritam Krishna |
| Call Number | AIT Diss. no. SM-02-01 |
| Subject(s) | Information technology Banks and banking--Information technology Information technology Banks and banking--Information technology |
| Note | A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy, School of Management |
| Publisher | Asian Institute of Technology |
| Abstract | Information Technology (IT) use in commercial banks in the Asia-Pacific region is having a significant positive impact on Bank Productivity. IT Benefits, such as fast response and improved service quality outweigh IT Problems, like IT hardware and software incompatibility and job security concerns. Retail IT Products - Electronic Payment Systems and Internal Systems, and Wholesale IT Products - Front Office and Back Office Systems used in the banks have a positive impact on productivity. IT use increases Outputs, like deposits and loans, and the number of customers, while it decreases costs. Increased IT Measures, like computer and telecommunications capital, and data processing power index, also improve productivity. These are not necessarily reflected on gains in assets and net profit, so Profitability Measures like Return on Assets (ROA) and Return on Equity (ROE) cannot replace Productivity Measures. In the banks with asset (loan) decrease, there is a shift in banking services from interest-based (loan) services to more fee-based services with increased use of IT. IT use is affecting financial service characteristics so that the difficulty in productivity definitions and measurement at the operational level are reduced to some extent. Important IT Benefits are growth potential, cost reduction, employee job satisfaction, and improved service (speed, quality, variety). IT Problems requiring attention are IT induced high competition, IT induced information overload, high costs of IT, communication problems between employees due to difficulty in learning IT based operations, and information security concerns. IT Measures that have the highest positive impact on Bank Productivity are the number of IT employees, computer and telecommunications hardware and software capital, data processing power index, total IT expenses, IT labor expenses proportionate to non-IT labor expenses, and IT expenses proportionate to total income. Productivity Measures that are affected highest by IT use are based on the following Output and Input Measures: Output Measures - total shareholder return, weighted output of composite of services, and average number of all types of both deposits and loan accounts; Input Measures - total number of hours paid to employees, all operating costs, value of tangible fixed assets; and the IT Measures listed above. Japanese banks lag behind other Asia-Pacific banks in exploiting IT for gains in productivity, although their customers are more used to receiving financial services through IT Products. Since the average level of IT investments and expenses is below optimum in both groups of banks, they need to spend more on IT in order to increase productivity further. Banlcs should view IT as a strategic competitive factor, not merely as part of a support function. |
| Year | 2002 |
| Type | Dissertation |
| School | School of Management |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Swierczek, Fredric William;Bechter, Clemens;Swierczek, Fredric William;Bechter, Clemens; |
| Examination Committee(s) | Vatcharaporn Esichaikul ;Meier, Andreas ; |
| Scholarship Donor(s) | Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ) GmbH (German Technical Cooperation);Asian Institote of Technology; |
| Degree | Thesis (Ph.D.) - Asian Institute of Technology 2002 |