The impact of information and communication technology (ICT) on commercial bank performance.

Abstract

This paper contribute to the on – going debate regarding the contribution of Information and Communication Technology (ICT) to firms performance. The study assessed the impact of ICT on the performance of South African banking industry using bank annual data over the period 1990 – 2012 published by Bankscope – World banking information source. Data analysis was carried out in a dynamic panel environment using the orthogonal transformation approach. The robustness of the results was affirmed by residual cointegration regression analysis using both Pedroni and Kao methods. The findings of the study indicated that the use of ICT increases return on capital employed as well as return on assets of the South African banking industry. The study discovers that more of the contribution to performance comes from information and communication technology cost efficiency compared to investment in information and communication technology. The study recommends that banks emphasize policies that will enhance proper utilization of ICT equipment rather than additional investments