The Impact Of Information And Communication Technology On Performance Of Commercial Banks In Ethiopia

Information and communication technology has become the heInformation and communication technology has become the heart of banking industry, whilernthe banking industry is the heart of the economy. This research has considered a criticalrnliterature review of previous researchers with the objective to examine the impact ofrnInformation and Communication Technology on banks performance. Business organizations,rnespecially the banking industry is operating in a complex and competitive environmentrncharacterized by the changing conditions and highly unpredictable economic climate withrnInformation and Communication Technology (ICT) is at the center of the change curve. Thisrnstudy assessed the impact of ICT on the performance of Ethiopian banking industry usingrnsecondary data over the period 2010 – 2014 published annual reports by the banks. Datarnanalysis is carried out in panel environment. The study employed purposive sampling techniquernto select the required sample of banks from commercial banks in Ethiopia. The results werernaffirmed by cointegration regression analysis. Six banks, out of the 18 commercial banks as ofrnJune 2014, were selected for the study. The dependent variable used in this study in order tornmeasure the sample commercial banks performance is ROA whereas the explanatory variablesrnare ICT investment, ATM, POS, INF, BRAN and GDP. The study empirically analyzed thernimpact of information and communication technology in commercial banks performance inrnEthiopia by constructing an econometric model to study the effect of various factors such asrnICT investment, ATM, POS, INF, BRAN and GDP. Accordingly, the impacts of ICT on returnrnon asset in commercial banks in Ethiopia were analyzed using the OLS technique. Thernregression result showed that the ICT, ATM and POS have no statistically significant effect onrnreturn on asset on commercial banks in Ethiopia. Based on the research findings andrnconclusions the researcher recommended for commercial banks in Ethiopia to improve returnrnon asset, the banks should improve more on its information and communication technology sornas to enhance their performance, enlightenment has to be given to the general public throughrnthe various media on how to use some of the information technology, ATM and POS. Finally,rnbanks should put more effort in advertising these products in Ethiopia.rnKey words: Bank’s Performance, Banking Industry, ICT and Return on Asset.art of banking industry, whilernthe banking industry is the heart of the economy. This research has considered a criticalrnliterature review of previous researchers with the objective to examine the impact ofrnInformation and Communication Technology on banks performance. Business organizations,rnespecially the banking industry is operating in a complex and competitive environmentrncharacterized by the changing conditions and highly unpredictable economic climate withrnInformation and Communication Technology (ICT) is at the center of the change curve. Thisrnstudy assessed the impact of ICT on the performance of Ethiopian banking industry usingrnsecondary data over the period 2010 – 2014 published annual reports by the banks. Datarnanalysis is carried out in panel environment. The study employed purposive sampling techniquernto select the required sample of banks from commercial banks in Ethiopia. The results werernaffirmed by cointegration regression analysis. Six banks, out of the 18 commercial banks as ofrnJune 2014, were selected for the study. The dependent variable used in this study in order tornmeasure the sample commercial banks performance is ROA whereas the explanatory variablesrnare ICT investment, ATM, POS, INF, BRAN and GDP. The study empirically analyzed thernimpact of information and communication technology in commercial banks performance inrnEthiopia by constructing an econometric model to study the effect of various factors such asrnICT investment, ATM, POS, INF, BRAN and GDP. Accordingly, the impacts of ICT on returnrnon asset in commercial banks in Ethiopia were analyzed using the OLS technique. Thernregression result showed that the ICT, ATM and POS have no statistically significant effect onrnreturn on asset on commercial banks in Ethiopia. Based on the research findings andrnconclusions the researcher recommended for commercial banks in Ethiopia to improve returnrnon asset, the banks should improve more on its information and communication technology sornas to enhance their performance, enlightenment has to be given to the general public throughrnthe various media on how to use some of the information technology, ATM and POS. Finally,rnbanks should put more effort in advertising these products in Ethiopia.rnKey words: Bank’s Performance, Banking Industry, ICT and Return on Asset

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