The Impact of Information Systems Strategy on Bank Performance in Ghana
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Date
2014-02
Authors
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Publisher
University of Ghana
Abstract
Today’s business environment is very dynamic and undergoes rapid changes as a result
of technological innovation, increased awareness and demands from customers.
Information system strategy is a plan that aims to (1) identify the required IS assets,
structures, monetary resources, and technologies and (2) Allocate the existing
Information System assets in the most efficient way. The purpose of this study is to
determine the impact of information system strategy on bank performance of six banks
in the Greater Accra Region of Ghana. There are two measures of performance that
relate to how efficient and profitable a business entity is and these are Return on Asset
(ROA) and Return on Equity (ROE).
The study adopted a cross-sectional survey design and was comfortably placed within a
scientific epistemology of logical positivism. The cases or study settings investigated
were local and foreign banks. This study has three categories of population; the strategic
staff, the operational staff and the bank customers from the six banks all selected at their
Head Offices in Greater Accra region. A proportionate sample size of 62, 348, and 1,352
were used for the strategic staff, operational staff, and bank customers respectively.
Simple random sampling was used for the selection of the operation staff whilst
purposive sampling was used for the selection of the bank customers. The instrument
used in this study was the questionnaire. The Statistical Package for Social Sciences
(SPSS) was used for the analysis of the data. A frequency, percentages, charts and Chi-
square test of independence to ascertain the significance of the relationship between
variables has been used to present the results of the study. Logistic regression is also
used to predict the value of a dependent variable using more independent variables.
The findings revealed that, the foreign banks (Bank D, Bank E, and Bank F) have
invested more in IS than the local banks (Bank A, Bank B, and Bank C). All the foreign
banks exhibited increasing trends in the ROA but this trend did not occur in the local
banks. This is in line with the second hypothesis that statistically concluded that banks
with higher levels of information systems investments have increasing operating profits
than banks with low level information systems investments. The effects of IT investment
on increasing profitability (ROA and ROE) for banks are significantly great. Strategy
appears to have direct effect on IT and IT has direct effect on ROA. The analysis
suggests that IT can play a meaningful role in the strategy-ROA relationship. Despite
these caveats, the strategic context makes a significant difference in the correlations
observed between IT adoption and ROA. Without strategy variable in the model, the
correlations would have been underestimated.
Description
Thesis (PhD) - University of Ghana, 2014
Keywords
Information Systems, Strategy, Bank, Bank Performance, Ghana, technological innovation, business environment