Performance of banking sectors due to adoption of information technology (IT)

Abstract

The aim of this paper is to provide an analysis on the relationship between Information Technology (IT) usage, CRM and performance of bank (state bank group) in Bhubaneswar, Odisha, India. Most of the banks in INDIA are geared for comprehensive banking solutions with extensive branch networks. Empirical data collection was done in the year 2012 and analyzed with the theoretical data. A sample of 18 branches was selected using the non-probability sampling technique. Perceptions of branch managers, staff members and customers were collected using a survey method. All 18 branches selected are of an equivalent grade according to the grading set by the bank. Three different types of questionnaires were designed for branch managers, branch staff and customers. Both structured and semi structured questions were included in the questionnaires with 7 point likert scale. Using bivariate correlation and linear regression, data analysis was done. The linear relationship between variables was measured by using Pearson’s correlation coefficient. The analysis suggested that IT usage has a positive linear relationship with financial performance and quality performance of bank branches. Bank performance was found to have a correlation with factors such as staff attitude towards IT usage, IT literacy level of bank staff and scope and complexity of the IT applications.