Electronic Banking and Profitability of Financial Institutions
INTRODUCTION
Background of the study
In recent times, there has been a keen competition in the delivery of financial service or products which has resulted in financial institutions, especially banks, to developing and making use of alternative delivery channels to enhance their activities, increase profitability and in all, gain competitive advantage. These activities may include: retrieving an account balance, money transfers to and from a user’s accounts, retrieving an account history. Some institutions also allow services such as stock market transactions, and the submission of standardized accounting payment files for transfers to third parties (Claessens et al., 2002). This has generated the use of alternative technological means or channels. The most recently introduced delivery channel is online or electronic banking also known as e-banking (Daniel & Storey, 1997. An online or electronic banking system provides easy means of accessing and processing financial transactions. Banks and other financial institutions have moved to e-banking in their efforts to cut costs while maintaining reliable customer service (Kolodinsky and Hogarth, 2001).
It is evident that e-banking has been embraced by banks and other financial institutions in developed and developing countries. Different kinds of electronic banking systems emerge, as technology and other services or products evolves, each bringing a new dimension to the interaction between user and bank. They include Automated Teller Machine (ATM), mobile and Internet (online) banking, electronic funds transfer, direct bill payments and credit card (Gikandi and Bloor, 2010; Liaoa and Cheung, 2002). Among these E-banking facilities, the Automated Teller Machine (ATM) is the first well-known and widely adopted system that was introduced to facilitate the user access to banking activities (Nyangosi et al. 2009; Claessens et al., 2002)
In Ghana, standard chartered bank is one of the first banks which introduced
Background of the study
In recent times, there has been a keen competition in the delivery of financial service or products which has resulted in financial institutions, especially banks, to developing and making use of alternative delivery channels to enhance their activities, increase profitability and in all, gain competitive advantage. These activities may include: retrieving an account balance, money transfers to and from a user’s accounts, retrieving an account history. Some institutions also allow services such as stock market transactions, and the submission of standardized accounting payment files for transfers to third parties (Claessens et al., 2002). This has generated the use of alternative technological means or channels. The most recently introduced delivery channel is online or electronic banking also known as e-banking (Daniel & Storey, 1997. An online or electronic banking system provides easy means of accessing and processing financial transactions. Banks and other financial institutions have moved to e-banking in their efforts to cut costs while maintaining reliable customer service (Kolodinsky and Hogarth, 2001).
It is evident that e-banking has been embraced by banks and other financial institutions in developed and developing countries. Different kinds of electronic banking systems emerge, as technology and other services or products evolves, each bringing a new dimension to the interaction between user and bank. They include Automated Teller Machine (ATM), mobile and Internet (online) banking, electronic funds transfer, direct bill payments and credit card (Gikandi and Bloor, 2010; Liaoa and Cheung, 2002). Among these E-banking facilities, the Automated Teller Machine (ATM) is the first well-known and widely adopted system that was introduced to facilitate the user access to banking activities (Nyangosi et al. 2009; Claessens et al., 2002)
In Ghana, standard chartered bank is one of the first banks which introduced
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