An Evaluation of the Role of Technology
BRAC University Journal, Vol. IV, No. 2, 2007, pp. 41-53
AN EVALUATION OF THE ROLE OF TECHNOLOGY AND RELATIONSHIP IN BANKING: STUDY ON BANGLADESH
S.S.M. Sadrul Huda, Kazi Khaled Shams Chisty and Mamunur Rashid
Business Administration Department East West University, 43 Mohakhali, Dhaka 1212 email: sadrul@ewubd.edu
ABSTRACT Banking has become increasingly competitive financial services industry with fragmented customer groups, their heterogeneous expectations and ever-changing global economic challenge. Besides, technology with sophisticated facility is making banking industry new every morning. To be fit against these challenges, it is necessary to appear close to the customers with technology driven long-term stable relationship. Reporting the attitude of the thirty banks’ towards technology and relationship, this study documents the imperative importance of technology and relationship in profit maximization, increase in quality of service, reduction in cost of bank operation and diversification of bank income sources. The report shows that Private and Foreign Commercial Banks are pioneers banking facilities with technological development maintaining better relationship with the customers, while local public banks (NCB) are lagging behind. Key Words: E-banking, Relationship, Relationship Banking, Relationship Index, Technology Index.
1. INTRODUCTION Banking is a financial service industry and any banking decision must be viable in terms of costbenefit aspects and attracting new customers. Since the market is increasingly covered with financially literate customers, it has been difficult for traditional banks to maintain their old standard (Howcroft & Durkin, 2000). Technological benefit is paying much because it provides the low cost creation and re-creation of financial services and it sets the upper scale for distribution of financial services to the customer against a speedy return of customer satisfaction (Howcroft & Durkin, 2003). Since banking is
AN EVALUATION OF THE ROLE OF TECHNOLOGY AND RELATIONSHIP IN BANKING: STUDY ON BANGLADESH
S.S.M. Sadrul Huda, Kazi Khaled Shams Chisty and Mamunur Rashid
Business Administration Department East West University, 43 Mohakhali, Dhaka 1212 email: sadrul@ewubd.edu
ABSTRACT Banking has become increasingly competitive financial services industry with fragmented customer groups, their heterogeneous expectations and ever-changing global economic challenge. Besides, technology with sophisticated facility is making banking industry new every morning. To be fit against these challenges, it is necessary to appear close to the customers with technology driven long-term stable relationship. Reporting the attitude of the thirty banks’ towards technology and relationship, this study documents the imperative importance of technology and relationship in profit maximization, increase in quality of service, reduction in cost of bank operation and diversification of bank income sources. The report shows that Private and Foreign Commercial Banks are pioneers banking facilities with technological development maintaining better relationship with the customers, while local public banks (NCB) are lagging behind. Key Words: E-banking, Relationship, Relationship Banking, Relationship Index, Technology Index.
1. INTRODUCTION Banking is a financial service industry and any banking decision must be viable in terms of costbenefit aspects and attracting new customers. Since the market is increasingly covered with financially literate customers, it has been difficult for traditional banks to maintain their old standard (Howcroft & Durkin, 2000). Technological benefit is paying much because it provides the low cost creation and re-creation of financial services and it sets the upper scale for distribution of financial services to the customer against a speedy return of customer satisfaction (Howcroft & Durkin, 2003). Since banking is