Impact Of Information Technology On Banks In Bahrain

Impact Of Information Technology On Banks In Bahrain

Information technology and permeated almost every aspect of business operations and communications technologies. So it is a one of the most exciting research has been focusing on the wide interest in all parts of the world through the decades, but little was devoted to study the impact of information technology to banks in Bahrain.

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This study examines the impact of information technology on organizational performance in the banking sector during the period from 2005 to 2009. The dependent variable used is return on equity ( ROE) while the independent variables are Hard ware, Soft Ware, System Development & Operations, I .T Maintenance, I.T Training , I .T Insurance , I.T Communication, I .T Implementation, I .T Consultancy , I .T Sites and Business Continuity Planning (BCP).

Preliminary data collected through in-depth interviews, official documents and surveys of the field through the top 8 banks in Bahrain, this data has been tested by applying different statistical methods and finance. The research results led to the conclusion that information technology has a positive impact on organizational performance in the banking sector……..

As an emerged business trend, the use of information technology (I.T) in the economic organizations are immense and measureless. Systems of organization and functions are now considered effortless and unproblematic because of I.T. information technology passes to be the most important one for each financial institution and the banks, particularly, they are one of the greater investors in I. T, Ahli united bank one of these banks that costs them around $ 13 millions. It is an enormous cost of this technology for local and international market.

The existing studies generally have concluded two positive effects concerning the relationship between IT and the financial performance of banks. “First, it can reduce operational costs of banks’ (the cost advantage).

For example, the Internet helps banks to conduct standardized, low value transactions (e.g. send the bill payments, balance inquiries, account transfers) through the online channel, while focusing its resources on specialized, high value – added transactions (eg small business loans, personal trust services, investment banking) through branches. Second, can facilitate transactions between customers within the same network(the network effect).

As an example, let us consider the case of automated teller machines (ATMs) by banks. If ATMs are geographically dispersed areas available largely over, the advantage of using an atmosphere will increase as customers can access their accounts from any geographic location they want.

This would imply that the value of the ATM network increases with number of locations available in the atmosphere, and the value of the network of the a bank to a customer is determined in part by the final size of the network effect bank’s network is import……………