Information Technology, Productivity and Profitability in Asia-Pacific Banks

Past analyses of the relationship between IT, productivity and bank profitability in the U.S., Europe and Australia have shown both positive and negative linkages. This study considers the IT impact on productivity in two groups of Asia-Pacific banks based on reported profitability during the Asian...

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Bibliographic Details
Published in:Journal of global information technology management : JGITM 2005-01, Vol.8 (1), p.6-26
Main Authors: William Swiercze, Fredri, Shrestha, Pritam K., Bechter, Clemens
Format: Article
Language:English
Subjects:
Asia-Pacific
Banking industry
Central banks
Commercial Banks
Competition
Cost reduction
Costs
Customer services
Economic crisis
Information technology
Information Technology (IT)
Labor productivity
Productivity
Profitability
Profits
Retail banking
Return on assets
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Summary:Past analyses of the relationship between IT, productivity and bank profitability in the U.S., Europe and Australia have shown both positive and negative linkages. This study considers the IT impact on productivity in two groups of Asia-Pacific banks based on reported profitability during the Asian financial crisis. In general, the banks perceive increased productivity, and both strategic and operational benefits from IT. The high costs of IT permit only suboptimal investments, in both IT capital and IT labor. Better management of IT resources enhances competitiveness through higher quality service at lower costs, delivered faster through a variety of channels more convenient to customers. IT investments and their proper implementation are more relevant when the banks are not performing well. Since increased productivity may not be adequately reflected in profits, profitability measures should not be used alone to measure the impact of IT on productivity.
ISSN:1097-198X
2333-6846
DOI:10.1080/1097198X.2005.10856388