CHAPTER ONE INTRODUCTION OF THE STUDY

1.0 BACKGROUND:

Nowadays, technology has increased its importance in Ghanaian banks. Traditionally, banks always sought ways through which they would serve their clients more cost effectively as well as increase the utility to their clientele. Their main concern has been to serve clients more conveniently and in the process increase profits and competitiveness. Electronic and communication technologies have been used extensively in banking for many years to advance the agenda of banks (Abort 2008). In Ghana, the earliest forms of electronic and communication technologies used were mainly office automation devices. Telephones and facsimile were employed to speed up and make more efficient, the process of servicing clients. For decades, they remained the main information and communication technologies tools used for transacting bank business. Rural Banks in Ghana were established to bring enough benefits to the people in the rural areas: that is helping them to know how to save money at appropriate times. Rural Banks in Ghana have been working very hard to be able to give quality and affordable services to their clients. Without information technology things were very difficult, but with information technology these days the rural banks in Ghana are now providing quality services to their customers and have also become a bank which is competing with non-rural banks for excellent banking services. (Banking industry, Journal of Money)

Arguably, the most revolutionary electronic innovation in this country and the world over has been the Automated Teller Machine (ATM).In Ghana, banks with ATM offerings

have them networked and this has increased their utility to customers. The Trust Bank Ghana in 1995 (are u sure) installed the first ATM. Not long after, most of the major banks began their ATM networks at competitive positions. Eventually, other banks followed with most banks currently operating the ATM in Ghana. The ATM has been the most successful delivery medium for consumer banking in this country. For Customers it is important in their choice of banks and banks that delayed the implementation of their ATM systems has suffered irreparably. Though ATMs have enjoyed great success because of their great utility, it has been recognized that it is possible for banks to improve their competitive stance. This has also resulted in introducing Telephone Banking which is convenient and time saving and other great services which has improved upon their services to customers.
1.1 PROBLEM OF THE STUDY:

It has been observed in Ghana that a greater percentage of the rural people find no wisdom for transacting business with rural banks for a lot of reasons which ranges from time wasting, low interest rates, access to loans and account balances, the risk, poor services from the banks and desire to save as well as their general knowledge about banking. Some potential customers on the other hand feel reluctant and other benefits that accrue to them by transacting business with rural banks. In deciding whether to transact business with the rural banks, customers need information about the bank they intent to invest in or do business with.

Among the numerous questions that have been agitating the mind of potential customers of the rural banks are where to get information about the operations benefits to be derived is what to invest in and any other information which will be of help to them. This situation coupled with the continuous influx of foreign and multinational banks into the country with their determination to compete in all fronts in the industry poses a big threat to the competitiveness, profitability, survival and growth of the rural banks in the country. This study therefore seeks to evaluate how Ghanaian Rural Banks are utilizing ICT as a competitive and strategic tool in the banking industry, examine the extent to which they have adopted and deployed innovative technologies and analyze the resultant effects of these technologies on their operations. 1.2 RESEARCH OBJECTIVES: This study seeks to evaluate how Ghanaian Rural Banks (Nwabiagya Rural Bank) are utilizing IT as a competitive and strategic tool in the banking industry, examine the extent to which they have adopted and deployed innovative technologies analyze the resultant effects of these technologies on their operations. Then again, the research will work on IT has helped the rural banks and its customers in time saved and cost. Another thing which the research will focus on is the benefit which the rural people will get from the rural banks using IT, that is the advantages they may gain from these rural banks. The research will also focus on how efficient the rural banks using IT are to the rural people.

Lastly, the research will also answer the opportunities that rural IT banks may gain over other non-rural IT banks.

1.3 RESEARCH QUESTIONS:

This research will help anyone who gets access to answer questions such as: What type of services do they offer to their customers? That is, banking services like Internet Banking, Telephone Banking, Automated Teller Machines (ATMs), Personal Computer Banking, Branch Networking, Electronic Funds Transfer at Point of Sale (EFToS) and others. What benefits do they gain over the non-IT Rural Banks? IT Rural banks are more likely to gain advantage over the non-IT rural; this study will help know the type of the advantage they gain. How efficient is the services provided by them? The IT rural banks are expected to provide efficient services to their customers. The bank officials will be asked as to how valuable their services are to their customers and other people who transact business with them.
Are they able to satisfy their customers with the IT services in place? The officials of the bank will be asked as to how their customers react to their services after they have instituted the IT service.

1.4 SIGNIFICANCE OF THE STUDY: The issue of unwillingness of customers to save in the rural banks is due to inefficiency of the rural banks in the rural areas. This research is aimed at ensuring that customers receive

best service from the rural banks through the sensitization of the need for rural banks to adapt to technological advancement. Again, the research is also aimed at motivating the rural banks to provide efficient services through the use of IT. Moreover, when the research work published, all rural bank customers will benefit in one way or the other from the rural findings. Finally, it will also help the researcher to develop certain level of knowledge in the basic research writing, thus, to make it possible to undertake basic research activity in the future in relation to Information Technology. 1.5 SCOPE OF THE STUDY: The study will use Nwabiagya Rural Bank as a case study with its headquarters being the main target of seeking information and other branches within the Kumasi Metropolis in the Ashanti Region. Findings from this study will also apply to other rural banks in the country which uses IT in their operations since they perform similar functions and may encounter almost the same problems in the course of their operations. The study will cover at least five (5) chapters. Chapter one will give the general introduction of the study. Chapter two will talk about literature review which simply talks about what other public researchers, experts, institutions, Bank of Ghana, Government department etched said about IT rural banks. Chapter three will give the adopted to procure information whiles chapter four will account to the findings of the research and the last one will hammer on summary of the research, conclusion and recommendations.

1.6 LIMITATIONS OF THE STUDY: The researchers were confronted with series of problems which include: The unwillingness of some customers and officials of the bank to release information for the work. The time frame for the project was also short to enhance the cover of some essential areas. The cost involved in the whole exercise was very high which include printing of interview schedule, transportation and most of all the typing, printing and binding of the entire project. The scope of the study would have been widened to cover a larger area but due to the constraints mentioned above restricted it.

CHAPTER TWO LITERATURE REVIEW 2.0 INTRODUCTION TO COMPUTERS The abacus, which emerged about 5,000 years ago in Asia Minor and is still in use today, may be considered the first computer. This device allows users to make computations using a system of sliding beads arranged on a rack. Early merchants used the abacus to keep trading transactions. But as the use of paper and pencil spread, particularly in Europe, the abacus lost its importance (Timothy Trainor and Diane Trainor). It took nearly 12 centuries, however, for the next significant advance in computing devices to emerge. In 1642, Blaise Pascal (1623-1662), the 18-year-old son of a French tax collector, invented what he called a numerical wheel calculator to help his father with his duties. This brass rectangular box, also called a Pascaline, used eight movable dials to add sums up to eight figures long. Pascal's device used a base of ten to accomplish this. For example, as one dial moved ten notches, or one complete revolution, it moved the next dial - which represented the ten's column - one place. When the ten's dial moved one revolution, the dial representing the hundred's place moved one notch and so on. The drawback to the Pascaline, of course, was its limitation to addition. In 1694, a German mathematician and philosopher, Gottfried Wilhem von Leibniz (16461716), improved the Pascaline by creating a machine that could also multiply. Like its predecessor, Leibniz's mechanical multiplier worked by a system of gears and dials. Partly by studying Pascal's original notes and drawings, Leibniz was able to refine his machine. The centerpiece of the machine was its stepped-drum gear design, which offered an
7

elongated version of the simple flat gear. It wasn't until 1820, however, that mechanical calculators gained widespread use. Charles Xavier Thomas de Colmar, a Frenchman, invented a machine that could perform the four basic arithmetic functions. Colmar's mechanical calculator, the arithometer, presented a more practical approach to computing because it could add, subtract, multiply and divide. With its enhanced versatility, the arithometer was widely used up until the First World War. Although later inventors refined Colmar's calculator, together with fellow inventors Pascal and Leibniz, he helped define the age of mechanical computation. The real beginnings of computers as we know them today, however, lay with an English mathematics professor, Charles Babbage (1791-1871). Frustrated at the many errors he found while examining calculations for the Royal Astronomical Society, Babbage declared, "I wish to God these calculations had been performed by steam!" With those words, the automation of computers had begun. By 1812, Babbage noticed a natural harmony between machines and mathematics: machines were best at performing tasks repeatedly without mistake; while mathematics, particularly the production of mathematic tables, often required the simple repetition of steps. The problem centered on applying the ability of machines to the needs of mathematics. Babbage's first attempt at solving this problem was in 1822 when he proposed a machine to perform differential equations, called a Difference Engine. Powered by steam and large as a locomotive, the machine would have a stored program and could perform calculations and print the results automatically. After working on the Difference Engine for 10 years, Babbage was suddenly inspired to begin work on the first general-purpose computer, which he called the Analytical Engine. Babbage's assistant, Augusta Ada King, Countess of Lovelace (1815-1842) and daughter of English
8

poet Lord Byron, was instrumental in the machine's design. One of the few people who understood the Engine's design as well as Babbage, she helped revise plans, secure funding from the British government, and communicate the specifics of the Analytical Engine to the public. Also, Lady Lovelace's fine understanding of the machine allowed her to create the instruction routines to be fed into the computer, making her the first female computer programmer. In the 1980's, the U.S. Defense Department named a programming language ADA in her honor. Babbage's steam-powered Engine, although ultimately never constructed, may seem primitive by today's standards. However, it outlined the basic elements of a modern general purpose computer and was a breakthrough concept. Consisting of over 50,000 components, the basic design of the Analytical Engine included input devices in the form of perforated cards containing operating instructions and a "store" for memory of 1,000 numbers of up to 50 decimal digits long. It also contained a "mill" with a control unit that allowed processing instructions in any sequence, and output devices to produce printed results. Babbage borrowed the idea of punch cards to encode the machine's instructions from the Jacquard loom. The loom, produced in 1820 and named after its inventor, Joseph-Marie Jacquard, used punched boards that controlled the patterns to be woven. The term banking technology refers to the use of sophisticated information and communication technologies together with computer science to enable banks to offer better services to its customers in a secure, reliable, and affordable manner, and sustain competitive advantage over other banks. In the five decades since independence, banking in India has evolved through four distinct phases. During Fourth phase, also called as Reform Phase, Recommendations of the Narasimham Committee (1991) paved the way for
9

the reform phase in the banking. Important initiatives with regard to the reform of the banking system were taken in this phase. Important among these have been introduction of new accounting and prudential norms relating to income recognition, provisioning and capital adequacy, deregulation of interest rates & easing of norms for entry in the field of banking. Entry of new banks resulted in a paradigm shift in the ways of banking in India. The growing competition, growing expectations led to increased awareness amongst banks on the role and importance of technology in banking. The arrival of foreign and private banks with their superior state-of-the-art technology-based services pushed Indian Banks also to follow suit by going in for the latest technologies so as to meet the threat of competition and retain their customer base. Indian banking industry, today is in the midst of an IT revolution. A combination of regulatory and competitive reasons has led to increasing importance of total banking automation in the Indian Banking Industry.

10

Information Technology has basically been used under two different avenues in Banking. One is Communication and Connectivity and other is Business Process Reengineering. Information technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the In view of this, technology has changed the contours of three major functions performed by financial intermediaries to reach geographically distant and diversified markets. 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. 2.1 TECHNOLOGICAL HISTORY OF GHANAIAN BANKS Over time, technology has increased in importance in Ghanaian banks. Traditionally, banks have always sought media through which they would serve their clients more costeffectively as well as increase the utility to their clientele. Their main concern has been to serve clients more conveniently, and in the process increase profits and competitiveness. Electronic and communications technologies have been used extensively in banking for many years to advance agenda of banks In Ghana, the earliest forms of electronic and communications technologies used were mainly office automation devices. Telephones, telex and facsimile were employed to speed up and make more efficient, the process of servicing clients. For decades, they remained the main information and communication technologies used for transacting bank business. Later in the 1980s, as competition intensified and the personal computer (PC) got proletarian, Ghanaian banks begun to use them in back-office operations and later tellers used them to service clients. Advancements in computer technology saw the banks networking their branches and operations thereby making the one-branch philosophy a reality. Barclays Bank (Gh.) and Standard Chartered Bank (Gh.) pioneered this very
11

important electronic novelty, which changed the banking landscape in the country. Arguably, the most revolutionary electronic innovation in this country and the world over

2.2 FORMS OF IT INNOVATIONS (Electronic Delivery Channels) This section describes the various forms of technological innovations or electronic delivery channels adopted by banks. Technological innovations have been identified to contribute to the distribution channels of Banks. The electronic delivery channels are collectively referred to as Electronic Banking. Electronic Banking is really not one technology, but an attempt to merge several different technologies. Each of these evolved in different ways, but in recent years different groups and industries have recognized the importance of working together. Bankers now see a kind of evolution in their business, partly, because the world has taken a quantum leap in the use of technologies in the last several years. The various electronic delivery channels are discussed below: 2.3.1 Automated Teller Machines (ATMs) It is time to review the working of public sector banks (PSBs) as far as bank automation is concerned. Old private banks, which were not nationalized in the mid-seventies, or new private banks set up after liberalization of the banking sector alongside multinational banks doing business in India are not in the purview of this study as also cooperative banks. Most PSBs started computerization of branches based on the Rangarajan Committee report in the eighties, going in for simple, isolated applications at branch level. Most of the applications were based on DOS or UNIX computers and used either COBOL or simple packages such as dBASE, FOXPRO etc. This was the learning phase of bank automation in India. Today, different types of computer packages offering ``Total Branch Automation (TBA)'' are available to automate the various activities of a typical branch. However, there is still a fair degree of confusion about what exactly TBA means, according to a sample survey of CPPD heads of the National Institute of Bank Management, Pune.
12

One can identify some of the problems in bank automation in today's scenario thus: Islands of applications in the branches of a bank, with dissimilar computers, operating systems and application packages. There is no integration of such applications. The interest calculation package may be different from the regular package with SB, CA, FD accounts. Partial manual processing is necessitated if a report is required from more than one isolated application. Some PSBs have more than one dissimilar TBA package from different vendors. Though the solution looked attractive in the late eighties and early nineties, now it has created serious problems for inter-branch communications within a bank. Most PSBs have TBA software packages running on outdated technologies, though the packages were the best available when the PSBs selected them. Already, a large number of branches are using obsolete packages and the question is, how does one get out of this difficult situation? The RBI and the CVC are also responsible, in some measure, as they kept up pressure on banks to boost computer usage. Information technology is ever-evolving and PSBs require an intelligent technology up gradation plan to make sure that their investments will at least break even in three years. Computerizing manual systems is a general trend. Managers, typically, are busy people and a computerization initiative makes extra demands on a manager's time. He may simply tell the systems man to go ahead with computerization without studying the processes involved. A hasty decision on the kind of technology required may result in more expenditure and an inefficient system.

13

More manpower requirement because some PSBs have parallel manual and computerized systems. This is a `least risk' strategy for the bankers. The bank may have to double spending on computerization projects. The database created by transactions at branch level is backed up periodically and stored in the cupboard to make disc space available for the next period. This is hardly made use of by the bank except to produce some mandatory report (which, perhaps, nobody looks at seriously). It is not used by middle and strategic-level managers, even though such data is a gold mine for effective decision-making. Recent trends in effective information design call for varied, easy approaches to help managers make use of such data. The top management of PSBs has also created serious problems in computerization. The decision-makers have relatively short appointments, ranging from one to three years. Why commit to large expenditure on IT now? Why not postpone the automation? -- Such a decision is typical of a PSB because of the top management's limited knowledge of IT and its complexity. The IT applications banks may opt for in the future will become complex for some of the following reasons: Bank automation will be networked so that bankers and customers can access the different applications of the bank. Such applications, based on integrating various functionalities, call for complex software development projects. Besides dial-up leased lines and satellites, the Internet will play an important role and Internet banking will gain in popularity. With advances in communication, such an approach may be cost-effective for developing countries.

14

Most of the new bank products will be based on networked environments. Hence there will be new products using IT, such as mobile computing. Investment in IT should boost a bank's profitability. Most banks have a list of available technologies. Their relevance depends on the bank's business strategy. Otherwise, a large sum is spent on implementing a specific IT project without much addition to the profitability of operations and customer satisfaction. Data created by the various transactions of a bank should be available to middle and toplevel managers and executives for effective decision-making using the popular concepts of Decision Support Systems (DSS), Executive Information System (EIS), Expert Systems (ES), Data Warehouse (D/W), Data Mining (D/M) etc. Banks need to draw up a well-defined business plan looking 3-5 years ahead. It must be updated at least semi-annually. There are a number of techniques to help the top management evolve a suitable business plan for the bank, including SWOT, Porter's Five Force Model, Value Chain, Strategic Grid, Balanced Score Card, Core Competence and Critical Success Factors. The next step is to identify important IT applications based on the business plan. It is then relatively easy to identify gaps in the present IT applications, which are running, and applications that might be required in the future. They can be formulated as well-defined projects and prioritized, leading to an IT-plan for at least the next 2-3 years. Such a plan requires periodic updation, preferably at the same time that the business plan is updated. Such a plan also gives a budget profile for future IT-applications which are in conformity with the business plan.

15

Such a budget proposal is also acceptable to the top management because it is based on a business plan in which they were involved during formulation. (By Dr.V.B.Kaujalgi-Bank Automation--Its a hold-up) Rose (1999), describes ATMs as follows: an ATM combines a computer terminal, recordkeeping system and cash vault in one unit, permitting customers to enter the banks book keeping system with a plastic card containing a Personal Identification Number (PIN) or by punching a special code number into the computer terminal linked to the banks computerized records 24 hours a day. Once access is gained, it offers several retail banking services to customers. They are mostly located outside of banks, and are also found at airports, malls, and places far away from the home bank of customers. They were introduced first to function as cash dispensing machines. However, due to advancements in technology, ATMs are able to provide a wide range of services, such as making deposits, funds transfer between two or accounts and bill payments. Banks tend to utilize this electronic banking device, as all others for competitive advantage. The combined services of both the Automated and human tellers imply more productivity for the bank during banking hours. Also, as it saves customers time in service delivery as alternative to queuing in bank halls, customers can invest such time saved into other productive activities. ATMs are a cost-efficient way of yielding higher productivity as they achieve higher productivity per period of time than human tellers (an average of about 6,400 transactions per month for ATMs compared to 4,300 for human tellers (Rose, 1999). Furthermore, as the ATMs continue when human tellers stop, there is continual productivity for the banks even after banking hours. 2.3.2 Telephone Banking
16

Telebanking (telephone banking) can be considered as a form of remote or virtual banking, which is essentially the delivery of branch financial services via telecommunication devices where the bank customers can perform retail banking transactions by dialing a touch-tone telephone or mobile communication unit, which is connected to an automated system of the bank by utilizing Automated Voice Response (AVR) technology (Balachandher et al, 2001). According to Leow (1999), telebanking has numerous benefits for both customers and banks. As far as the customers are concerned, it provides increased convenience, expanded access and significant time saving. On the other hand, from the banks perspective, the costs of delivering telephone-based services are substantially lower than those of branch based services. It has almost all the impact on productivity of ATMs, except that it lacks the productivity generated from cash dispensing by the ATMs. For, as a delivery conduit that provides retail banking services even after banking hours (24 hours a day) it accrues continual productivity for the bank. It offers retail banking services to customers at their offices/homes as an alternative to going to the bank branch/ATM. This saves customers time, and gives more convenience for higher productivity. 2.3.3 Personal Computer Banking PC-Banking is a service which allows the banks customers to access information about their accounts via a proprietary network, usually with the help of proprietary software installed on their personal computer. Once access is gained, the customer can perform a lot of retail banking functions. The increasing awareness of the importance of computer literacy has resulted in increasing the use of personal computers. This certainly supports the growth of PC banking which virtually establishes a branch in the customers home or
17

office, and offers 24-hour service, seven days a week. It also has the benefits of Telephone Banking and ATMs. 2.3.4 Internet Banking The idea of Internet banking according to Essinger (1999) is: to give customers access to their bank accounts via a web site and to enable them to enact certain transactions on their account, given compliance with stringent security checks. To the Federal Reserve Board of Chicagos Office of the Comptroller of the Currency (OCC) Internet Banking Handbook (2001), Internet Banking is described as the provision of traditional (banking) services over the internet. Internet banking by its nature offers more convenience and flexibility to customers coupled with a virtually absolute control over their banking. Service delivery is informational (informing customers on banks products, etc) and transactional (conducting retail banking services). As an alternative delivery conduit for retail banking, it has all the impact on productivity imputed to Telebanking and PC-Banking. Aside that it is the most cost-efficient technological means of yielding higher productivity. Furthermore, it eliminates the barriers of distance / time and provides continual productivity for the bank to unimaginable distant customers.

2.3.5 Branch Networking Networking of branches is the computerization and inter-connecting of geographically scattered stand-alone bank branches, into one unified system in the form of a Wide Area

18

Network (WAN) or Enterprise Network (EN); for the creating and sharing of consolidated customer information/records. It offers quicker rate of inter-branch transactions as the consequence of distance and time are eliminated. Hence, there is more productivity per time period. Also, with the several networked branches serving the customer populace as one system, there is simulated division of labour among bank branches with its associated positive impact on productivity among the branches. Furthermore, as it curtails customer travel distance to bank branches it offers more time for customers productive activities. 2.3.6 Electronic Funds Transfer at Point of Sale (EFTPoS) An Electronic Funds Transfer at the Point of Sale is an on-line system that allows customers to transfer funds instantaneously from their bank accounts to merchant accounts when making purchases (at purchase points). A POS uses a debit card to activate an Electronic Fund Transfer Process (Chorafas, 1988). Increased banking productivity results from the use of EFTPoS to service customers shopping payment requirements instead of clerical duties in handling cheques and cash withdrawals for shopping. Furthermore, the system continues after banking hours, hence continual productivity for the bank even after banking hours. It also saves customers time and energy in getting to bank branches or ATMs for cash withdrawals which can be harnessed into other productive activities.

2.3 THE CONCEPT OF RURAL BANK. Umea Lela 1995 in his Design of Rural Development Lessons from Africa defined rural bank as a bank to improve the living standard of the mass people of the low income
19

population residing in the rural areas and making the process of the development selfsustaining A rural bank on the other hand is a financial institution that helps rationalize the developing regions or developing country to finance their needs especially the projects regarding agricultural progress. The report of the Astride Conference held under the auspices of the colonial office defined rural bank as a unit bank designed to promote better living for the whole community with active participation and on the initiative of the community, but this initiative is not forthcoming spontaneously by the use techniques for arousing and stimulating it in order to secure the active and enthusiastic response to bank In 1988, Mr.Odame Badu said, the establishment of rural bank has vigorously opened up rural areas and also enhances the living standard of rural folks and the nation as a whole through education, provision of social amenities and establishment of police station in some areas. 2.4 POSITIVE IMPACT OF INFORMATION TECHNOLOGY (IT) ON RURAL BANKS. With the increasing popularity of information technology, more and more industries are seeking ways to utilize this popular medium in an effort to keep up with the changing technological preferences of their customers. These days you can do just about anything online from grocery shopping to making a free phone call to a friend in Ghana or any other country through your PC.

20

The possibilities of the information technology are seemingly endless and the rural banks have decided that they will not be left behind. While most banks have at least heard of electronic banking, the majority of the rural banks have probably not tried it yet. Maybe it is because we find more comfort in working with real people and real paper when it comes to money matters rather than technological interventions in banking activities. Whatever the case may be, there are advantages to IT banking. Michael Russell (EzineArticles.com Expert Author) in his article outlines the following advantages of online banking: First, online banking is convenient. It allows you perform transactions, pay bills and check balances 24 hours a day, 7 days a week. The bank virtually never closes because it is accessible as your PC or laptop computer. No matter where you are in the country or in the world, you can visit your online bank and handle money matters. You can even schedule to pay several payees ahead of time rather than keeping up paper bills or trying to remember when to visit a payees website to make an online payment. Your bank will automatically send payments on your behalf in the amounts and on the dates you specify. Second, online banking is fast, efficient and effective. Through the internet, transactions are typically performed and executed at a faster rate than ATMs. In addition, online banks give you the ability to handle several bank accounts (checking, savings, etc) from one site. The majority of banking sites are also compactable with programs like Quicken and Microsoft Money, so as to allow for more effective management of assets Mr. Eric Osei-Bonsu, Managing Director of the ARB Apex Bank Limited, in a speech read for him, emphasized that rural banks had a lot to do by way of organizational and operational restructuring, especially in the areas of migrating from manual operations to
21

embracing information and communication technology interventions; effective deposit mobilization; credit administration; cost control and reduction. These, he said, would enable rural and community banks (RCBs) to meet the challenges of the changing, competitive and turbulent business environment. IT in rural banking enables some computerized rural banks to participate in Government initiatives. For instance, Anya Kobo Rural Bank (in the Eastern Region) which has now computerized its operations is one of the two rural banks in Ghana chosen for the piloting of e-Switch service. (Daily Graphic Mon, 06, July.2009) 2.5 NEGATIVE IMPACT OF INFORMATION TECHNOLOGY (IT) ON RURAL BANKS. The introduction of Information Technology (IT) in rural banking today allows customers to access their accounts at any time. This banking style has a lot advantages, including 24hour account monitoring, the ability to bank from anywhere and fast transactions. However, this system has some distinct disadvantages too. Here are some of the disadvantages: Natasha Banta (www.buzzle.com/articles/disadvantages of online banking) said online banking can be difficult to learn for a beginner. Some of the services of these computerized rural banks require some basic computer literacy and familiarity with navigating the internet. There are people in the rural areas that are afflicted with technophobia or are simply inexperience with Information Technology (IT).There are also a significant number of people who are suspicious of anything having to do with the internet because it is outside their comfort zone. So looking at all these shortcomings, some affected rural folks may
22

prefer manual-prone rural banks to computerized rural banks. Hence reducing the customers of the computerized banks. Technical breakdowns are another serious disadvantage or drawback when rural banks decide to go technologically, Some customers normally switch to Automated Teller Machines (ATMs),online banking etc. when the branch offices of rural banks and other banks in general are closed (especially during holidays and weekends). In the case of technical breakdown, customers may find it very difficult to withdraw money, deposit money, and check balance etc. It also becomes a hell on the side of the rural banks since they might think they may lose their potential customers. If you bank at a traditional or manual-prone bank, you can go to the bank and speak to someone face to face about your problems but, in a situation where sometimes you need to bank online or through Automated Teller Machines (ATMs), you will likely spend a lot time on phone being passed around and placed on hold when you have a problem Casey Holley (www.ehow.com/facts 4743500 disadvantages internet banking Html).

CHAPTER THREE RESEARCH METHODOLOGY 3.0 RESEARCH DESIGN

23

This research is case study conducted to evaluate how the organization was strategically using IT/ICT in its operations to gain competitive advantage in the banking industry in Ghana. It explains the full description of methods used to obtain information, the identity of the research population and sample and an explanation of why that population was chosen. It also place emphasis on the research approach, research population, data collection instrument, data collection procedures and the approach to analyzing data. 3.1 RESEARCH APPROACH Two basic approaches were used to accomplish the purpose of this study. In the first approach, the researcher analyzed several performance measures of the bank. These measures were broken into periods before, during and after adoption of IT into the banks operations. The study adopts a more overall performance perspective to see if successfully deploying IT does, in fact, have any impact on overall firm performance and competitiveness of the bank. The second approach is to examine customers reactions to and patronage of the bank before and after the deployment of IT by the bank. Measures used included the performance of the bank, problems faced during the introduction and customer waiting time before and after IT deployment into the operations of the bank. 3.2 RESEARCH POPULATION The research design used in the study would limit the population to the customers and bank officials of the 22 rural banks in the Ashanti region. In this statistical investigation, a census is inappropriate since it would be difficult, costly or even impossible. It is therefore necessary to randomly choose a sample which is a population subset selected to suit the study.
24

The researcher eventually chosed the customers and officials of Nwabiagya Rural Bank which happens to be a subset of the general population under review as a sample for the study. A total of 55 customers and officials of Nwabiagya Rural Bank were randomly selected as a sample by the researcher which was made up of 15 officials and 40 customers. However, the researcher was able to retrieve only 35 questionnaires out of the 40 sent to customers of the bank and able to retrieve all the 15 sent to the bank officials. 3.3 DATA COLLECTION INSTRUMENTS According to the schedule, the researcher prepares a questionnaire which was drawn to be administered through personal interviews during the stay on campus. The questionnaire was patterned along the theoretical framework within which the bank was studied. The major part of the questionnaire includes: How the introduction of Information Technology (IT) or computerization benefited customers and bank officials. Why there is the need for Information Technology (IT) in rural banking? Which new delivery channel of products services do customers most operate on? What major problem(s) did the bank faced in the introduction of this Information Technology (IT)? What problem(s) did the customers faced in the introduction of this Information Technology (IT)?

3.4 DATA COLLECTION PROCEDURES

25

Two major approaches were used in data collection. The researcher adopted sourcing and analyzing documents and asking questions as the appropriate techniques for collecting information. Written materials (questionnaires), tables and charts were rich sources of documentary evidence used. They provided qualitative or textual data which the researcher used as data for content analysis. Asking questions was in two main forms. An unstructured interview was conducted for respondents. Their sequence of questions was limited not predetermined. Some of the bank officials of Nwabiagya Rural Bank were interviewed personally. Experiments, surveys and observations were inappropriate methods for the study since their validity and reliability depended much on the control that the researcher had over the variable that are to be studied. Data used was obtained from both primary and secondary data sources. The primary data was collected from the bank officials directly and the secondary data was collected from customers of the bank and personal interview of non-customers transacting business at the banking hall. 3.5 DATA ANALYSIS Data gathered were analyzed using descriptive statistics. The findings of the study were presented using appropriate tables and charts to ensure easy interpretation. Data analysis runs through the whole paper and is not limited to a single chapter. Broadly; the theoretical framework was used as a yardstick for analyzing the research report. Due to the nature of the data collected, the data was classified into mutually exclusive and comprehensive themes and sub-themes. The content analysis approach was therefore adopted in analyzing such qualitative or textual data.
26

3.6 LIMITATIONS During the administering and collection of the questionnaires, the researcher encountered the following problems: Some of the bank officials were not willing to give out some information since they consider such informations as confidential. Some customers too were unable to read the questions and write the answers as well. The researcher was unable to collect the questionnaires in time since some of the customers and officials did not enough time to read the questions and give answers. Some customers on the other hand did not understand the content of questionnaires. Some customers were not willing to corporate with the researcher in giving some information about their account.

CHAPTER FOUR

27

ANALYSIS AND INTERPRETATION OF DATA 4.0 INTRODUCTION This chapter is the presentation of findings and data analysis of the study. This project is presented in tables in order to bring a trend relationship between theoretical and practicality of the study. In order to facilitate the attainment of the project objectives, the project has been grouped using the following as a yardstick; importance of the system, information system of security, problems associated with invention, debiting and crediting of deposits account, savings on current account, services provided by the bank, withdrawals, inputs and processes and procedures. 4.1 TYPES OF ACCOUNTS OPERATED BY THE BANK CURRENT ACCOUNT This is a generic product. It enables customers (enterprises, societies individuals and corporate bodies among others) transact business and effect payments using cheques. The initial deposit for individual is GH 20.00 and for enterprises is GH 50.00.Balances above GH 100.00 will attract an interest. To apply, the customer completes and submits a standard application form.

4.1.1 Savings Account The savings account is usually a fund for future use. People would open savings account to accumulate funds in a safe place and at the same time generate some earnings. The initial deposit for individuals savings account opening is GH 10.00 with the minimum operating balance set at GH5.00.To start earning interest ones balance should be above GH50.00.
28

To apply, the customer fills and submits an application form in addition to two passportsized photographs. The standard savings account is available to all people. It could be an individual, joint, group or society account. 4.1.2 Overdraft and Loans Customers may need funds over and above what they currently have, either to expand their business or start new one. An overdraft facility may be provided in this instance. The following are options available to the customer: OVERDRAFT: The customer is allowed to draw monies to a specific amount with interest charged only on the amount overdrawn. 4.1.3 Consumer Credit Scheme The consumer credit scheme allows customers who are regular income earners to purchase domestic appliances, communication system, household furniture, personal computer and electronic gadgets from designated shops. Unlike other credit schemes, where the beneficiary makes a deposit before being considered for the facility, Nwabiagya Rural Bank makes the full payment on behalf of its customer to the vendor. The customer then picks up the required gadget while the bank makes monthly deductions from his/her income. Repayment is between 6 and 18 months. 4.1.4Susu Scheme Nwabiagya Rural Bank provides susu facility which enables low income earners to accumulate funds for future use. This is done by making daily deposit of specific amount ranging from GH 2.00 to GH5.00 for a specific period of time. The bank has the facility of switching from susu scheme to be a permanent account holder. 4.2 SECURITY WITH THE INFORMATION TECHNOLOGY (IT) SYSTEM

29

Financial transactions and banking environment, by their very nature require higher levels and gateways of security. In todays fast-paced and technical banking environment, it is impossible for bankers to ensure security unless they approach it holistically. And doing so requires that financial institutions of all sizes invest in software and hardware protection as well as channel and process solutions that shield them from other types of external attack. Such security controls include the following: Password: this is the use of phrase to turn it into a password by creating an acronym from the phrase. This helps strengthen the account balance and system from external attack. Such words should be confidential and easy to remember. Software access controls: these are first level of security that occurs at the network level and which protects the organizations communication system. 4.3 PROBLEMS ASSOCIATED WITH INFORMATION TECHNOLOGY (IT) INTRODUCTION Though the expected benefits in the introduction of information technology (IT) in rural banking industry are enormous, the bank adopting this new way of doing business can also expect some challenges as well. From the response or data obtained from the bank, the following are the problems or challenges associated with the information technology system or computerization system; Sometimes software products cost is very high to develop and this has become a setback to the bank. Cost of implementation. Small per capita income.

30

 Lack of technical /managerial skills. Perceived customer readiness. Limited information and technological infrastructure. Low level of economic development. 4.4 PROCESSES AND PROCEDURES With the introduction of information technology in the rural banking environment, the processes and procedures operated in the banking hall still remains two, which are manual operation and computer operation. These operations being manual and computer are used in the description of deposits (savings and current account) and loans together. Manual Procedures: Signature for verification. Opening of new customers account. Closure of customer account. Receipts and payment of cash. Charging of commission on charges returned unpaid. Computer Procedures: Production of bank statement for customers. Posting of transactions. Journal sheet preparation. Calculation of interest on both current and savings account. 4.5 IMPORTANCE OF INFORMATION TECHNOLOGY (IT) IN RURAL BANKING
31

There are various ways through which the computerization system in rural banking environment widely benefited both customers and bank officials. Among them are: The IT system has created a more prompt and reliable services that has increased customers satisfaction and some cases, it has been a source of competitive advantage to the bank over other financial institutions. The new technology in rural banking has assisted in automating previously or existing manually intensive work. This has helped save time and resulted in a similar workforce being required. The online banking further gives the evidence of excessive use of computers in banking sectors meaning that just in couple of seconds one can retrieve all his previous transactions in accounts. Transfer of money can also be made online through this computerization. The system has helped lessen the workload of bank officials which are to be executed at the banking hall. That is, it endorses the use of fast transactions of which example is the Xpress Money Transfer. The introduction of IT or computerization in rural banking has helped the bank to increase market share.

4.6 SERVICES PROVIDED BY THE BANK WHICH ARE COMPUTERIZED

32

Nwabiagya Rural Bank adopted the computerization system in 2005 firstly as a result of the fierce competition in the Ghana Rural Banking and the Banking Industry as a whole and secondly to increase deposits. The bank agreed that since the introduction of IT or computerization system in their operations, the bank has seen its turnover increased however, figures were not available to confirm this. The system introduced, has resulted in new delivery channel of banking products and services which include: 4.7 MONEY TRANSFER It is an electronic transfer and payment of funds at any branch of Nwabiagya Rural Bank. The product is restricted in Ghana and it is targeted at both customers of the bank as well as non customers. It uses code as mode of security. It is also targeted at traders who travel distances to buy or sell within the country. Its benefits and features include the following: Real time delivery of funds. Secure code as proof of transfer. No need to travel around with large volumes of money. It is convenient, that is, funds can be collected at any branch of the bank. 4.8 E-ZWICH E-zwich is the brand name for the national switch, under the new universal electronic payments (UEPs) technology which could ensure that all commercial banks, rural banks and savings and loan institutions in Ghana implemented a common payment platform and biometric smartcard. This has made the bank linked point of sale terminals to the national switch.

33

Its major importance is that, customers using E-switch cards can deposit and withdraw monies at the bank and any point of sale terminal. From the information obtained from the bank officials and customers transacting business at the banking hall, the following data was obtained as to which of the new delivery channel of products and services customers most operate on. Table 1: MOST HIGHLY USED DELIVERY CHANNEL Electronic Delivery Channel MONEY TRANSFER E-ZWICH TOTAL Frequency 35 I5 50 Percentage 70% 30% 100%

With respect to the type of IT innovations used by customers, money transfer appears to be the most widely accepted and highly used electronic delivery tool indicating 70% of the respondents. E-switch representing 30% and being the least used electronic delivery channel by bank customers. Since money transfer is the widely accepted and highly utilized channel, it is important at this point to ascertain the frequency of its usage among bank customers. This is shown below;

34

Table 2: FREQUENCY OF MONEY TRANSFER Number of Transfers per Frequency 06 10 12 22 50 Percentage 12% 20% 24% 44% 100%

month Once Twice Thrice Four or More TOTAL

The table above shows the results on the frequency of money transfers within a month. The results show that customers frequently enjoy the money transfer facility for bank transactions such as cash transfer 22 representing 44% of respondents who receive monies through the Xpress Money Transfer about four or more times in a month. However, 12%, 20% and 24% of respondents pointed out that, they receive monies through the Xpress Money Transfer once, twice and thrice respectively every month.

Table 3: LENGTH OF SERVICE OPERATED BY THE STAFF OF NRB Number of years 1-3 years 4-10 years 11 years and Above Frequency 4 5 6 Percentage 27% 33% 40%
35

TOTAL

15

100%

Four(4) management staff respondents representing 27% served the bank between 1-3 years, while five (5) served the bank between 4-10 years representing 33%.Six (6) of the general management respondents representing 40% served eleven (11)years and above. The views of respondents on the length of service/date they join the bank is very essential to the study since respondents who were part of the bank before and just after the IT was deployed by the bank are in a better position to assess the effects that IT is having on the operations of the bank and to tell how NRB is using IT as a competitive tool in its operations. The analysis revealed that, almost half of all the management respondents were part of the bank before IT was deployed into the operations of the bank. This inference is made based on the fact that IT was deployed in 2000 and so those who joined the bank in that year might have experienced the old state of the performance of the bank before full benefit could be harvested from the new technology. The sample groups are therefore deemed to be significant in providing a sufficient insight into the situation under study.

Table 4: DATE CUSTOMERS JOIN THE BANK Year 1997-1999 2000-2005 2006-2010 TOTAL Frequency 16 12 7 35 Percentage 45.7% 34.3% 20% 100%

36

From the table above, sixteen (16) customers representing 45.7% joined the bank before the introduction of IT into the banks operations, twelve (12) representing 34.3% joined the bank during the time of the introduction while seven (7) customers representing 20% joined the bank after the full introduction of IT, this analysis imply that many of the customers joined the bank before the deployment of IT into the banks operations. Those who joined the bank in the early stage of IT introduction might not have enjoyed the full benefit of IT in the bank as compared to those who joined around 2006-2010.These customers who joined the bank from 1997 -2005 are those in the best position to identify the full benefit of IT in the banks operations

Table 5: TYPE OF ACCOUNTS OPERATED BY CUSTOMERS Type of account Savings Account Current Account Fixed Deposit Account Other Account TOTAL Frequency 10 18 5 2 35 Percentage 29% 51% 14% 6% 100%

Reacting to the table above, ten (10) customers representing 29% operate savings account, eighteen (18) respondents representing 51% operate current account, five (5) representing
37

14% operate fixed deposit account while two (2) customers representing 6% also operate other account. Current account holders are those who can either withdraw or deposit money in their account severally within a week. They are therefore almost always transacting business with the bank; they usually experience the ups and downs of the IT system in the banks operations. They are also the customers who benefit from the IT operations in the bank.

CHART 6: EDUCATIONAL QUALIFICATON OF NRB STAFF

38

In reference to the above chart, six (6) management staff who responded were degree holders, four (4) also were holding MSC/MBA, three (3) were HND holders while two (2) were holding other qualification in connection with the banking industry. The educational qualification in the banking industry is very important. From the chart above, it is clear that almost all the management staff of NRB is abreast with the banking job. This will enable the bank to have managerial advantage over other rural banks that do not have these staff with these qualifications.

Table 7: RELATIONSHIP BETWEEN NRB AND OTHER RURAL BANKS IN TERMS OF INFORMATION TECHNOLOGY (IT)
39

Rating Extremely ahead of others Better than others Equal performance Not better than others TOTAL

Frequency 15 26 7 2 50

Percentage 30% 52% 14% 4% 100%

From the above table, fifteen (15) respondents representing 30% believes that NRB is extremely ahead of other rural banks in terms of IT in operations, twenty-six (26) representing 52% also believe that NRB is better than other rural banks, seven (7) representing 14% believes that NRB is of equal performance with other rural banks in IT operations while two (2) respondents representing 4% also believes that NRB is not better than other rural banks. It is clear from the analysis that almost all the respondents rates NRB ahead of other rural banks in terms of IT in rural banks operations. This means that the introduction of IT in the banks operations has helped both the customers and management staff of the NRB.

Table

8:

EFFICIENCY

OF

NRB

AFTER

THE

INTRODUCTION

OF

INFORMATION TECHNOLOGY (IT) Ratings Excellent Very Good Good Frequency 12 25 8

40

Percentage 24% 50% 16%

Average Very Poor TOTAL

4 1 50

8% 2% 100%

The table above indicates the efficiency ratings of NRB after the introduction of IT in the banks operations. twelve (12) respondents representing 24% rated NRB excellent, twentyfive(25) representing 50% also rated the bank very good, eight (8) also representing 16% rated the bank good, four(4)respondents representing 8% rated the bank average while only one (1) representing 2% rated the bank as being very poor in its operations after in the deployment of IT. It is therefore clear from the response that the introduction of IT has increased the efficiency level of NRB as indicated by the respondents.

Chart 9: THE NEED FOR COMPUTERIZATION IN RURAL BANKS

41

Major of the respondents clearly stated that the introduction of IT in rural banks is very important with almost all the respondents responding that YES there is the need for computerization in rural banks. Table 10: LESS WAITING TIME AS BASES FOR BANK ATTRACTION TO CUSTOMERS YES NO TOTAL Frequency 31 4 35 Percentage 88.6% 11.4% 100%

Reacting to how the bank was strategically using IT in its operations, thirty-one (31) respondents representing 88.6% said that the use of IT by NRB in its operations has helped to shorten their waiting time in the banking hall and has therefore attracted their attention of doing business with the bank while four (4) respondents representing 11.4% said the

42

deployment of IT in NRBs operations has not shorten their waiting time in the banking hall.

CHAPTER FIVE FINDINGS, CONCLUSION AND RECOMMENDATIONS 5.0. INTRODUCTION

43

The entire project was developed into a very keen issue that usually threatens the survival of many financial institutions. The project was conducted on the topic The impact of information technology (IT) on the operations, efficiency and customer satisfaction of rural banks; the case was Nwabiagya Rural Bank at Barekese in the Ashanti Region. Information technology (IT) was as the topic under the pretext to procure and gather relevant, sufficient and reliable information that will assist the researcher and other stakeholders to understand the various IT systems introduced by the bank available in the rural banking industry. This chapter therefore intends to provide the user with findings, conclusions and the recommendations relating to the project. 5.1 FINDINGS To analyze the number of rural banks in the Ashanti Region. It was discovered that, there are twenty-two (22) rural banks in the entire region. To analyze the most highly used delivery channel by the customers. The researcher discovered that, out of the two delivery channels, thus E-zwich and money transfer, money transfer is the most highly used by customers. To examine the length of service operated by the staff of Nwabiagya Rural Bank. The results revealed that, most of the staff of NRB who responded to the questionnaires have operated with the bank for more than eleven (11) years and are therefore able to identify the impact of information technology (IT) before and after IT introduction. To examine the frequency of money transfer in a month. It was discovered that customers uses the money transfer channel more than four times in a month.

44

To examine the type of account operated by the customers of Nwabiagya Rural Bank. It was revealed that more than half of the customers who answered the questionnaires operate current; these are therefore in the best position to evaluate the effects of IT in the banking system. To examine the educational qualification of the staff of NRB.The response obtained from the questionnaires administered revealed that most of the staff are degree holders and MSC/MBA holders which helps them to be abreast with the banking system. To analyze the relationship between Nwabiagya Rural Bank and other IT rural banks. It was discovered that both the customers and staff of the bank rates the bank as better than other IT rural banks. To examine the efficiency of Nwabiagya Rural Bank after the introduction information technology (IT).It was discovered by the researcher that NRB has been very efficient after the introduction of IT in banks operations. To examine the need for computerization in rural banks. The results revealed that major of the respondents answered YES there is the need for computerization in the rural banks. 5.2 CONCLUSION The study concludes that though NRB has limited technological tools in place, the bank was able to strategically use the very few technologies it has as a strong competitive tool to attract customers, deliver fast and convenient transactions, cut down on its operations cost, support efficient management decision making process, increase its productivity and profit levels since the deployment of IT into its operation.

45

On these bases, the study concludes that IT has a strong positive impact on the banks operations and therefore serves as a strategic tool to attain a competitive advantage in the banking industry in Ghana. 5.3 RECOMMENDATIONS Based on the findings and conclusions of the study the researcher recommend as follows: ONE, since the results of the study indicate that NRB like other rural banks in the country has a very limited innovative technologies in place, against the background that the banks operations have seen much improvement as result of the few IT tools it has deployed, the management of NRB should endeavour to bring on board more innovative technologies to help the bank survive the current wave of competition in the banking industry. TWO, the result of the study further indicate that though NRB has succeeded in strategically employing the few IT tools it has deployed, the technology is not very functional resulting in intermittent brake down in service delivery to customers. It is therefore recommended that the bank should take steps to consult experts on powerful tools that can support its technology to ensure efficient service delivery. THREE, with the findings that lack of fund and inappropriate policies were the principal causes of the slow rate of technology diffusion in the rural banking sector, the study recommend that the government should assist these banks with adequate funding to assist the acquire the necessary technologies to support their operations and remain competitive. Selected References

46

1. Abor Joshua (2008): Technological Innovations and Banking in Ghana: An evaluation of customers perceptions. Pp 2-6. 2. Agboola, Akinlolu (2007): Information and Communication Technology (ICT) in Banking Operations in Nigeria: an evaluation of recent experiences Journal of Public Administration and Management, January 2007, Pp 19-28. 3. Aziale, Afedo (2010): The Strategic Use of Information Technology in the Rural Banking Sector in Ghana, Journal of Polytechnics in Ghana, September 2010, Pp 20-39. 4. Banking Industry, Journal of Money, Credit Banking, and Pp 141-176. 5. Dr.V.B Kaujalgi, Bank Automationits a hold up. 6. Ume Lele, (1995) Design of Rural Development Lessons from Africa (World Bank Research Publication). 7. Berger, A.N. (2003): The Economic Effects of Technological Progress, Evidence from the Computer Word, August 16 1999. 8. Art Gillis, Automation in Banking 2007 Executive Summary. 9. Management Information Technology in E Business Enterprises. 10. Mr.Odame Boadu (1988), Third Anniversary of Bosomtwe Rural Bank-Kade, Daily Graphic, October 2001. 11. Bod-Millar, M. Developments in the Ghanaian Banking Sector. 12. Anin, T.E., (2000) Banking in Ghana, Woeli Publishing Services, Accra.Pp 176-182. 13. Alpar P. and Kim. M. (1990), Microeconomics approach to measurement of information technology value. Journal of Management Information Systems, Pp.2, 7, 5569. 14. Case Holley http//www.ehow.com/facts 4743500 disadvantages internet banking.html
47

15.

Bender, D. (1986) Financial impact of information Processing. Journal of

Management Information Systems, Pp 2, 3, 22-32. 16. Banks, Henry (2007) Telecom Technology Factors into Banks competitive strategies Bank Systems & Technology Career Center.Pp 1.http//www.banksystems.tech.bookmark 03/01/08.

APPENDIX i

SUNYANI POLYTECHNIC
48

(SCHOOL OF BUSINESS AND MANAGEMENT STUDIES) DEPARTMENT OF ACCOUNTANCY QUESTIONNAIRES PRESENTED TO THE MANAGEMENT OF

NWABIAGYA RURAL BANK

This research is being conducted to know the impact of information technology (IT) on the operations, efficiency and customer satisfaction of rural banks and your bank has been chosen as the case study of the research. This questionnaire seeks to gather relevant information on the computerized system being operated by the bank. Please we wish to inform all respondents that information provided will be treated confidential and will be used purely for academic purpose only. Please you may tick in box where appropriate. Thank you. 1. Sex male [ ] female [ ] 2.Position holding 3. Number of years worked with the bank. 4. Highest educational qualification Higher National Diploma (HND) [ ] Degree [ ] MDA/MSC [ ]

Professional, please specify. 5. Do you think there is the need for computerization to operate on? Yes [ ] No [ ]

Why 6. Has the introduction of information technology (IT) or computerization benefited you as Bank official? Yes [ ] No [ ]
49

If yes, how................................................................... 7. How efficient has your bank been since the introduction of information technology (IT)? Excellent [ ] Very Good [ ] Good [ ] Average [ ] Very poor [ ] 8. How does the bank relate to other banks in the networking system as far as information technology (IT) is concerned? Extremely ahead of others [ ] Better than others Equal performance Not better than others [ ] [ ] [ ]

9. Do customers really operate on this new delivery channel of products and services using information technology (IT)? Yes [ ] No [ ]

10. Which of the new delivery channel of service do customers really operate on? MONEY TRANSFER [ ] E-ZWICH [ ]

OTHER, please specify

11. How many times do customers operate on these systems every month with reference to question 10 above? Once [ ] Twice [ ] Thrice [ ] Four or more [ ]
50

12. What major problem(s) did the bank encountered in the introduction of information technology (IT)?.................................................................................................................... 13. Have you ever had a transaction with any other bank before with their new delivery channel of service? Yes [ ] No [ ]

14. If yes, how do you compare their services with Nwabiagya Rural Bank? Extremely better than Nwabiagya Rural Bank [ ] Better than Nwabiagya Rural Bank Equal performance Not better than Nwabiagya Rural Bank [ ] [ ] [ ]

15. If no, how do you rate Nwabiagya Rural Bank in terms of its operations, efficiency and customer satisfaction? Excellent [ ] Average [ ] Good [ ] Very poor [ ] 16. Do you as bank official think the introduction of information technology is necessary? Yes [ ] No [ ]

If yes, why?..................................................................................................................... If no, why?............................................................................................................................ APPENDIX ii

SUNYANI POLYTECHNIC
(SCHOOL OF BUSINESS AND MANAGEMENT STUDIES)

51

DEPARTMENT OF ACCOUNTANCY QUESTIONNAIRES PRESENTED TO THE CUSTOMERS OF

NWABIAGYA RURAL BANK

This research is being conducted to know the impact of information technology (IT) on the operations, efficiency and customer satisfaction of rural banks and your bank has been chosen as the case study of the research. This questionnaire seeks to gather relevant information on the computerized system being operated by the bank. Please we wish to inform all respondents that information provided will be treated confidential and will be used purely for academic purpose only. Please you may tick in box where appropriate. Thank you. 1. Gender Male [ ] Female [ ]

2. Type of account operating Savings account [ ] Current account [ ] Fixed Deposit account [ ] Other account, please specify 3. How many years have you been working with Nwabiagya Rural

Bank? ..................................... 4. Have you noticed the introduction of information technology (IT) in the banking system? Yes [ ] No [ ]

5. With this introduction of information technology (IT) in place, have your waiting time been reduced in the banking hall? Yes [ ] No [ ]

52

6. If yes, how do you access the operations of the bank after the introduction of information technology (IT)? Excellent Very Good Good Not good at all [ ] [ ] [ ] [ ]

7. Have you encountered any problem(s) since the introduction of information technology (IT) in the banks operations as a customer? Yes [ ] No [ ] 8. If yes, how do you lodge your complaints? Through suggestion box [ ] Telephone Through an e-mail Personal contact [ ] [ ] [ ] No [ ]

9. Have you tried any of their new delivery system? Yes [ ] 10. If yes, which of these new delivery do you operate on? Money transfer [ ] E-zwich [ ]

Other, please specify. 11. How do you compare the operations of Nwabiagya Rural Bank before the introduction of information technology (IT) and after the introduction of information technology (IT)? Extremely better than before [ ] Better than before [ ]

Equal performance as before [ ]

53

Not better than before

[ ]

12. How do you compare the operations of Nwabiagya Rural Bank to other IT rural banks? Extremely better than other IT rural banks Better than other IT rural banks [ ] [ ]

Average performance with other IT rural banks [ ] Not better than other IT rural banks [ ] 13. How do you rate Nwabiagya Rural Bank in terms of the following? Please tick where appropriate Excellent Reliability of operations Speed of service Reliability of data Your personal satisfaction Efficiency of the bank Very Good Good Poor Very Poor

14. Do you as a customer think it is necessary for non- IT rural banks to introduce IT? Yes [ ] No [ ]

15. If yes, why?............................................................................................................... And if no, why?.............................................................................................................. 16. Would you recommend Nwabiagya Rural Banks new delivery channel of service to any other person? Yes [ ] No [ ]

17. If yes, why?................................................................................................................ And if no, why?................................................................................................................ THANK YOU.

54

55