Question

6(a). The recent trend in the Banking industry is driven by the following technological innovations:
I. Speed/Technology
II. Accessibility through ATMs, POS, and e-banking
III. Convenience through kiosk banking, workplace and mobile banking
Discuss these developments in the banking landscape in Ghana.
6.b.) The growth of market share and performance of some new foreign owned banks tend to refute the argument that having numerous branch network across country wide is statistically insignificant as far as performance is concern. Do you support this argument and will you advise your Board & Management Team that there is no significant relationship between branch network & performance?

Answer 1

There are various development & technological innovation in the Banking industry, some of them are discuused below:-

1. Speed/Technology: In Sub-Saharan Africa, developments in information and communication technology (ICT) are radically changing the way business is done. Electronic commerce is now thought to hold the promise of a new commercial revolution by offering an inexpensive and direct way to exchange information and to sell or buy products and services. This revolution in the market place has set in motion a revolution in the banking sector for the provision of a payment system that is compatible with the demands of the electronic marketplace.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.

2. Accessibility through ATMs, POS, and e-banking:

The banking industry is constantly responding to changes in customer preferences and needs; increasing competition from non-banks, changes in demographic and social trends, information technologies advances, channel strategies, and government deregulations of the financial service sector.

The banking industry in Ghana is undergoing rapid growth with the liberalization of the financial sector by the Bank of Ghana and positive economic environment. Not only has the bank introduced Universal Banking but has also introduced the Ghana Interbank Payment and settlement System enabling common electronic platforms for payments across financial institutions With many banks offering common products and services, the focus of competition is now moving towards speed, customization of products and services and the opening up of more branches (branch banking) to add value to the core banking products and service

3. Convenience through kiosk banking, workplace and mobile banking:

It has great impact on the life style of people of Ghana as they also do work while sitting at home.

Despite the much heralded growth that digital finance has seen in places like Kenya, many markets, including Ghana, still have not moved far beyond the basic cash-in/cash-out business model, which places a heavy burden and significant amount of risk. More importantly, a cash-in/cash-out only model, though often an important first step, does not truly provide poor households the kinds of formal financial services that they need to grow their businesses, save for unexpected emergencies, and lead more resilient lives. In Ghana, USAID is focused on helping improve the country’s policy and regulatory environment. And the country has quickly established itself as a leader in this area, recently joining the Better Than Cash Alliance, which was co-founded by USAID in 2012 and is committed to transitioning government payments from cash to digital.

No i do not support the argument that the growth of market share and performance of some new foreign owned banks tend to refute the argument that having numerous branch network across country wide is statistically insignificant as far as performance is concern.This is because, numerous braches are equally important that a big branch is, thus it do matters that a branch which is statiscally insignicant as per the company. And because all braches contribute to the good performance & positive market share.