Good strategies addressing ICT banking sectors

 Strategies for addressing the challenges of ICT in banking sector

The competition

Johnson, M. Eric and Eric Goetz (2007) contend that the Lebanese banks are also planning to offer the entire range of services like telephone banking, ATMs, etc. They also respond very actively in the market place in introducing new products and services. Arab Bank was the pioneer in introducing ATMs in Lebanon.. Arab bank started to install ATM machines in 1993. Other banks followed, by establishing in 1994 a network called Link Network, using Link cards. About 25 banks have joined this network and are sharing now it’s almost 60 machines located in the major cities of Lebanon. The central bank is expecting that about 700 ATM machines will be installed in Lebanon by the year 2000.

Technology Assessment

The diffusion and successful implementation of IT in banks is not an easy process. Banking sectorare facing enormous challenges in mastering the new tools provided by IT. An important constraint to the diffusion and success of IT implementation is the telecommunications infrastructure, another obstacle is managerial practices and organizational weaknesses. In the following section, I will analyze and discuss these obstacles. In evaluating banks’ use of technology, we look at both the technology in place to serve today's customer and the plans for serving tomorrow's. The first objective is to examine the bank's deployment of technology relative to what is available, tested, and proven to enhance bank performance Fernando, A. C. ( 2009 )

Telecommunication Infrastructure

Goyal, K. A. and Joshi, V. (2011) argue that the greatest obstacle to real time electronic banking in Lebanon is the telecommunications infrastructure. Telecommunications in the banking sector is a major factor to the success or failure of any application or service. The Lebanese telecommunications infrastructure was devastated by the civil war. The process of rehabilitation and modernization of this infrastructure started in 1993.According to the recovery plan developed by the telecommunications rehabilitation plan will be completed by the year 1998. This means that banks will not be able to rely on the public network until 1998. The result of such situation is a delay in implementing new services and products like remote banking, electronic funds transfer, and real time bank information systems. This has also an effect on the reliability of the services already implemented like ATMs. In order to face this challenge, banks began studying the feasibility of installing a private telecommunications network. Four banks, Bank Audi, Arab Bank, Byblos Bank, started in the early 1996 considering the installation of a private network to connect their branches and thus conduct real time banking operations. This network will also be used to connect the ATMs machines which will thus function on-line. However three problems are delaying the implementation of such network: Obtaining a license from the Ministry of Post and telecommunications and the high cost of the equipment .The lack of coordination between the members of the Lebanese Banks Association. Human resources problems. Banking industry is heavily depending upon Information Technology that needs professionals for development, implementation and support. Despite the programs performed by many banks to develop their local expertise in IT, there is still a real shortage of qualified personnel. According to a recent survey (T. Abdul Read and M. Dayya, Banking IT: a look at Lebanon, 1996) the following problems were identified:

Unavailability of the Network Majority of Banks has no practical network available however few networks available for their ATM. Sometimes branches are not linked with each other. At this scenario, CBSP is going to implement a consumer banking software. This software is based on client server architecture, which off course required all branches to be connected with each other. To solve this problem, This Utility simply makes a data file, which is transferred from one place to another via dialup. After the file is transferred, the utility imports that file into the database, installed on that site. This is how data transfer utility is used to synchronize the data between head office and branches Johnson, M. Eric and Eric Goetz (2007),

Organisation Performance

Organisation performance is a function of employee performance. Organisation effectiveness depends on constantly improving the performance of organisational members and developing and maintaining the human potential that serves as the backbone of the organization as suggested by Kerning and Jaeger, (1990).

The term performance will be used as a global concept that represents the results of organizational activities. Effectiveness and efficiency will be reviewed as components of performance.

 Measures of Performance

Performance refers to how well one does a piece of work or activity and the ability to bring about desired results in the satisfactory manner. Good performance is an indicator of success and development.

The perspective of organizational performance is considered as a function of organization ability to reach and maintain equilibrium with its environment

Performance dimension should be reduced to clear setting of targets. Measurable in quantity as well as time and can be captured in an effective information system

According to Sultan (1997) business performance can be measured by many indicators for instance asset base, market share, quality, customer satisfaction and profitability. He however contends that satisfaction with using financial measures to gauge business performance has been expressed by some researchers based on the intensity and nature of criticism directed at the traditional accounting systems that are often harmful to the evaluation process. For purposes of this study, organizational performance will be measured using profit figures