Technological Innovations and Banking in Ghana:
An Evaluation of Customers’ Perceptions
University of Ghana, Legon
In Sub-Saharan Africa, developments in information and communication technology are radically changing the way business is done. These developments in technology have resulted in new delivery channels for banking products and services such as Automated Teller Machines (ATMs), Telephone Banking, PC-Banking, and Electronic Funds Transfer at Point of Sale (EFTPoS). This study evaluates the perceptions of banking customers regarding the effect of technological innovations on banking services in Ghana. The study focused on customers with banks that have at least one form of technological innovation. The results of the study generally indicate that, technological innovation or electronic delivery channels have contributed positively to the provision banking services and the growth of the Ghanaian banking industry.
Keywords: Information Technology, Electronic Delivery Channels, Banking, Ghana
In Sub-Saharan Africa, developments in information and communication technology (ICT) are radically changing the way business is done. Electronic commerce is now thought to hold the promise of a new commercial revolution by offering an inexpensive and direct way to exchange information and to sell or buy products and services. This revolution in the market place has set in motion a revolution in the banking sector for the provision of a payment system that is compatible with the demands of the electronic marketplace (Balachandher et al, 2001). Innovations in information processing, telecommunications, and related technologies – known collectively as “information technology” (IT) – are often credited with helping fuel strong growth in the many economies (Coombs et al, 1987). It seems apparent then that, technological innovation affects not just banking and financial services, but also the direction of an economy and its capacity for continued growth. IT is defined as the modern handling of information by electronic means, which involves its access, storage, processing, transportation or transfer and delivery (Ige, 1995). According to Alu (2002), IT affects financial institutions by easing enquiry, saving time, and improving service delivery. In recent decades, investment in IT by commercial banks has served to streamline operations, improve competitiveness, and increase the variety and quality of services provided. According to Yasuharu (2003), implementation of information technology and communication networking has brought revolution in the functioning of the banks and the financial institutions. It is argued that dramatic structural changes are in store for financial services industry as a result of the Internet revolution; others see a continuation of trends already under way. Many banks are making what seem like huge investments in technology to maintain and upgrade their infrastructure, in order not only to provide new electronic information-based services, but also to manage their risk positions and pricing. At the same time, new off-the-shelf electronic services such as online retail banking are making it possible for very small institutions to take advantage of new technologies at quite reasonable costs. These developments may ultimately change the competitive landscape in the financial services.
A number of studies have concluded that IT has appreciable positive effects on bank productivity, cashiers’ work, banking transaction, bank patronage, bank services delivery, customers’ services and bank services. They concluded that, these have positive effects on the growth of banking (Balachandher et al, 2001: Idowu et al, 2002; Hunter, 1991; Whaling, 1995; Yasuharu, 2003). This paper evaluates the perceptions of banking customers regarding the effect of technological innovations on banking services in Ghana. The next section gives an overview of...
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