Financial institutions, and banks, in particular, are one of the largest investors in information systems (IS) and information technologies (IT) and there are indications that this trend is likely to continue. However, there is growing concern that IS investments are not yielding the anticipated results, an issue that is of grave concern to many CEOs and top managers. One way to address this concern is to analyse the relationship, if any, between investments in IS and an organization’s efficiency measures. Reports the results of an empirical study that assesses the role and contribution of IS to a bank’s efficiency, based on a study of nationalized banks in the state of Florida. More specifically, reports on the role of IS in achieving business goals, improving productivity, and enhancing customer service in banks.
Introduction
Financial institutions are one of the largest investors in information systems (IS), and according to a survey by Ernst and Young and the American Banker, the industry’s information technology (IT) spending is expected to reach unprecedented heights in the late 1990s. It is estimated that in 1994 alone, banks invested close to $20 billion in information systems and technologies in an effort to improve efficiency and enhance customer service. Many successful financial institutions have clearly demonstrated that information systems and technologies can be a powerful competitive weapon that can be used to capture market share, improve customer service, reduce operating costs, and create new products and services (Lederer and Mendelow, 1988).
The Essay on Role of Information and Communication Technology in Banking in Nepal
The use of information and communication technology has taken wider scope in the banking sectors than previous years because of the reach of the people to the ICT infrastructure and easy availability of its products. The use of ICT has been for long time in the western countries such as USA, UK, Australia and many more. However, the easy access to internet and other smart ICT product has made ...
Chief executive officers (CEO) and top managers often have an intuitive understanding of the power and potential of IS, thus propelling many companies and institutions to invest large sums of money in IS and IT. However, decision makers often struggle with how to assess the returns from these investments because of the many intangible benefits associated with IS and IT. The primary question of “What is the relationship between investments in information systems and the bottom line?” is a difficult one to address since traditional ROI measures for IT investments are often inappropriate and misleading (Bender, 1988).
As the IS community tries to develop innovative and meaningful cost-benefit methodologies for IS and IT and as the pressure on CEOs and chief information officers (CIOs) to be more accountable increases, more and more companies are taking a hard look at the gains derived from IS (Benjamin, 1982).
In spite of the large investments in IS and IT by the banking industry and the pressing concern to assess the returns from these investments, little has been done to assess the contribution of IS to the growth, profitability, and efficiency of banks. A literature search yielded almost no theoretical frameworks or financial models for conducting such a study . Most references in the literature to banking IS appear in trade journals and are often
news releases of investments in specific technologies. There are a number of “how to” articles in the popular literature, such as how to design and develop client-server systems for banks, but little has been written on how to assess the contribution of such systems to the broader goals and objectives of the bank. With the new debate on the “information productivity paradox” raging in the IS community, the issue of measuring the impact of IS on a bank’s efficiency is both appropriate and timely . This paper reports the results of an empirical study that evaluates the contribution of IS to various productivity and efficiency measures in a bank. This paper is laid out as follows. In the following section we describe the research methodology and the results of the survey We then analyse the implications of . the results, followed by recommendations and conclusions.
The Term Paper on Alternative Investments
Executive Summary: The purpose of the report is to do an in-depth investigation, study and analysis on alternative investments. From the various alternative investments, our team of analyst chose commodities, variable annuities and hedge funds as our subject of interest for the study. Each financial product has its own aims as to cater to the different investment goals to meet the needs of ...
Methodology and results
The survey was mailed to the CIOs of all member banks of the Florida Bankers Association (FBA), which enthusiastically supported the study The survey was initially . tested on six bank CIOs who reviewed the survey and made several recommendations. The input of this test group was incorporated into the survey and the revised surveys were mailed to member banks of FBA. Multi-part questions were broadly divided into the following categories: 1 profile and characteristics of the bank; 2 technologies used by the bank; 3 investments in technology; 4 alignment between IS and business goals; 5 top management’s commitment to technology; 6 role of IS in supporting organizational tasks; 7 efficiency measures used to identify the contribution of IS; 8 critical success factors. We received 123 usable responses to our survey, giving us a response rate of 57 per cent.
