DIS FINAL DOC.

CHAPTER ONE: INTRODUCTION 1.1 Introduction Information Technology (IT) has major role in the business environment and the banking sector is no exception (Mahmood, Mahdi and Marziyeh, 2010:158). Amongst the banks available in Swaziland is, First National Bank. First National Bank (FNB) through the use of information technology offers different products and services, for example it has, internet banking, electronic wallet, cellphone banking to mention but a few. In the modern economy, organisations are increasingly seen as knowledge based enterprises in which proactive knowledge management is vital for competitiveness (Mahmood et al., 2010: 158). Information Technology has continuously played an important role in the success of banking institutions and the services provided by them; safekeeping of public money, transfer of money, issuing drafts, exploring investment opportunities and lending drafts, exploring investment being provided. It allows for rapid information exchange and increased responsiveness (Williams and Catsro, 2010: 124). Information technology enables sophisticated product development, better market infrastructure, and implementation of reliable techniques for control of risks and assists the financial intermediaries to reach geographically distant and diversified markets (Laudon and Laudon, 2008:18). Research indicates that information technology is the key ingredient for organisational success (Nyasatu, 2012: 13). This study sets out to establish through a survey, the contribution of information technology towards the achievement and hindrance of competitive advantage in the banking sector in Swaziland especially at First National Bank at the Mbabane branch. 1 1.2 Background to the Problem Prior to FNB going fully automated every individual branch was operating independently without much integration. Branch controllers had to move on stipulated periods to report at the Head Office in Mbabane, depending on the urgency of matters (Chavan, 2013: 19). For example, if a customer has lost a bank book or card, customers were unable to make a transaction in another branch of the bank other than the branch he or she opened the account. Due to a lack of information sharing and unsatisfactory service customers were induced to stop using the banks facility and preferred keeping their money at home, thus leading to reduced profits (Skhosana, 2007: 2). Information technology is increasingly moving from a back office function to prime assistant in increasing the value of a bank over time (Ahmed and Jamal, 2006: 72). IT does so by maximizing pro-active measures such as strengthening and standardising banks infrastructure in respect of security, communication connectivity, moving and towards networking, real time achieving gross inter branch settlement (RTGS) environment the forecasting of liquidity by building real time databases, use of Magnetic Ink Character Recognition and Imaging technology for cheque clearing to name a few (Nyasatu, 2012: 17). According to Ozuru, Chikwe and Uduma (2010: 5) the introduction of information technology at FNB, has brought many benefits amongst which include: Ø there are no barrier limitations; Ø it is convenient; Ø services are offered at minimal costs; Ø it has transformed traditional practices in banking Ø it has high performance through faster delivery of information from the customer and service provider 2 FNB’s management view information technology as one of many tools managers uses to cope with change (Laudon et al., 2012: 52). Using information systems effectively requires understanding of organisation, management, and IT shaping the system. Information system (IS) creates value for the firm as an organisational and management solution to environmental challenges (Laudon et al., 2012: 50). Perhaps, one can safely say advances in information provision have led organisations to develop information technology strategies which interrelate with their corporate strategies (Rogerson, 2004: 13). Telecommunications, hardware and software based information technology includes e-mail, extranet, internet, intranet, Local Area Network (LAN), Wide Area Network (WAN), data mart, data warehouse, microprocessor, and semiconductor (Nyasatu, 2012: 17). These are some of the broader IT innovations and applications, along with the availability of high-powered computers to most workers in companies and of course the internet greatly enhances communication of more accurate and value-added information to workers, managers, executives, and consumers, thus reducing uncertainty and downtime in conducting all types of business. FNB uses IT as a corporate resource and competitive weapon and the focus is on exploiting it for the purposes of gaining competitive advantage (Dïez, 2009: 600). Being competitive in the 21st century will depend on the effective use and application of IT to manage the information resources. IT assists organisations in reshaping themselves according to the changing environment and in this role IT with its strategic perspective helps organisations to achieve internal as well as external advantage (Mahmood et al., 2010: 158). 1.3 Problem Statement The dynamics of new information technologies in the banking sector in Swaziland especially FNB Mbabane are enormous and their impact ranges 3 from information technology officers, employees and customers of the bank (Bayat, 2010:160). As a result of these changes, FNB is increasingly becoming effective and efficient in providing its products and services than ever before, thus creating new bases of competition. Despite cyber space challenges, FNB remains competitive (Marakas and O’Brien, 2011:51). Quick adaptation to new ideas in IT has proved to be an ideal way to go for FNB to penetrate the market in the banking sector. The increasing demand of IS and IT has made the management of it more complex and difficult (Mahmood et al, 2010: 158). This research study is set to investigate the impact of IT in its quest of achieving competitive advantage. It will assist the bank in alleviating challenges brought by the integration of IT. Literature reviewed states that there is a flip side of the technological boom, it comes with serious challenges (Chavan, 2013:23). 1.4 Aim of the Study The aim of the study is to investigate the impact of information technology towards attaining a competitive advantage in the banking sector, a case study at FNB, Swaziland, Mbabane branch. 1.5 The Objectives of The Study · To assess the current information technology process in place at FNB. · To assess the impact of information technology on the attainment of competitive advantage at FNB. · To provide recommendations to the management at FNB and the relevant stakeholders. 4 1.6 · Research Questions What are the components of IT that are contributing towards attaining competitive advantage? · What are the challenges of IT hindering the attainment of competitive advantage? · What recommendations can be offered to the management of FNB and relevant stakeholders? 1.7 Significance of the Study This study is significant in that it will provide valuable insight to the management and staff and present a detailed analysis on the contribution of IT towards the achievement of competitive advantage at FNB. The knowledge generated will assist the management of FNB and the management in the banking sector in gaining an understanding of the components, services and products that have a better chance of providing an edge in the business. This study will further be an asset for those in management as they engage in future planning regarding the provision of banking services and it will also provide information on how the sector has integrated itself globally in the IT sector. 1.8 Format of the Study Chapter one – Introduction. This chapter presents the research problem and its background. The aim, objectives, research questions, significance of the study are also discussed. Chapter two – Literature Review. This chapter provides a comprehensive review of the literature sources that were consulted. Chapter three – Research Methodology. This chapter provides a summary of the theory and concepts surrounding research methodology for this study. 5 Chapter four – Results, Discussion and Interpretation of the findings. This chapter presents the results, discussion and interpretations of findings. Chapter five – Recommendations and Conclusions. This chapter presents the conclusions of the research and recommendations made to the organisation. 1.9 Conclusion Successful firms and managers understand the milestone IT entails and how it works and they take an active role in shaping its use and measure its impact on revenues and profits. Information systems often change an organisation as well as its goods and services, driving it into a new behavioural pattern. However successfully using Information Systems to achieve competitive advantage is challenging and requires precise coordination of Technology, Organisation and Management (Laudon et al., 2008). This chapter provided the introduction and background to the study. The aims, objectives, research questions, and significance of the study. Chapter two will provide an overview of the literature that is available to this study. 6 CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction A literature review discusses published information in a particular subject area, and sometimes information in a particular subject area within a certain time period (Boote and Beile, 2005: 4), or it might trace the intellectual progression of the field, including major debates. Depending on the situation, the literature review may evaluate the sources and advise the reader on the most pertinent or relevant information (Nyasatu, 2012: 18). Naidoo (2010: 8) states that the literature review is a very important part of the research process and make a very important contribution to almost every operational step involved. The literature review will cover information technology and information systems, the concept of competitive advantage in business, the components of IT with potential contribution to competitive advantage in banking and the contribution of products and services to competitive advantage in banking, the challenges brought by IT in organisations. Based on the literature review one may conclude that the banking industry has undergone a fundamental transformation through the expansion in IT (Charbaji, 2005: 229). 2.2 Information Technology Components and Competitive Advantage 2.2.1 Information Technology Developments in IT have caused a revolution in information distribution (Kotler and Keller, telecommunications, 2006:139). database IT consists management of hardware, and other software, information processing technologies used in computer-based information systems (Marakas et al., 2011: 678). IT plays a significant role in the growth of most industries. IT has given rise to new innovations in the product designing and their delivery in the banking and finance industries (Agrawal and Jain, 2012: 90). Its need in 7 consumer banking can be justified by the following consideration where only IT infrastructure can help handle these issues (Ahmed and Jamal, 2006: 71): Ø Fast application processing – by using IT, processing of customers’ application is fast. In this era of high competition, it is the better service that attracts customers towards doorstep. Ø Auditing and fraud detection – with IT framework, banks can closely monitor accounts for risk analysis. They are in a better position to identify fraudulent activities in time and prevent it, saving their money. Ø Reduce calculation errors and have efficient loan recovery – good consumer banking software reduces calculating time and error free. Efficient collection software is very useful to support the collections. Ø Mass consumer client record handling – at FNB the number of clients is very high and to keep records of all customers manually is hard to maintain, time consuming and resource intensive (Jamal et al., 2006: 4). 2.2.2 Information Systems Information system can be any combination of people, hardware, software, communications networks, data resources and policies and procedures that store, retrieve, transform and disseminate information in an organisation (McConnell and Brue, 2008: 312). It is a system that accepts data resources as input and processes them into information products (Marakas et al., 2011: 38). A potential usefulness of different kinds of Information Systems for environmental management is well recognised (Diez, 2009: 589). 2.2.3 Components of Information System (Development of Infrastructure and Human Capacity) 2.2.3.1 All information systems use people, hardware, software, data, and network resources to perform input, processing, output, storage, and control activities that transform data resources into 8 information products (Marakas et al., 2011:65-68). There is a requirement to develop infrastructure and human capacity in order to adapt to global technology (Chavan, 2013:22). 2.2.3.2 Hardware – this is the mechanical components of a computer system and is physical in nature (Fick, 2009: 4). O’Brien et al., (2011:67) says hardware consist of machines and media, physical devices and material that are used in information processing. These are computer systems and peripherals such as laptops, printers, and so forth. 2.2.3.3 Software – this refers to the instructions given to a computer in order to function in a certain way and these instructions consist of electronic data and one incorporeal in nature. Software resources include both software and procedures (Fick, 2009: 4). It is also important to note that computer components are used not only in computers, but also in various other devices such as cellular telephones (Fick, 2009:4). 2.2.3.4 People’s resources – this include the end users and IT specialist who uses information systems or the information it produces. These can be customers, salespersons, engineers, clerks, accountants or managers and are found at all levels of an organisation. 2.2.3.5 Network resources- the concept network resources emphasize that communications technologies and networks are fundamental resource components of all information systems. resources include communication media and Networks network infrastructure (Nyasatu, 2012:18). 9 2.2.3.6 Communication media – this included infrastructure like twisted pair, coaxial, fibre optic cables and wireless satellites which enables communication (Nyasatu, 2009: 18). 2.2.3.7 Network infrastructure – this is the generic category that emphasizes that many hardware, software and data technologies are needed to support the operation and use of a communication network. This includes processors such as modems and inter- network processors, and communications control software such as network operating systems and internet browser packages (Fick, 2009:28). 2.2.3.8 Data resources–data resources constitute valuable organisational resources. Examples can be smart cards. A smart card is a plastic card with a microchip embedded in it which enables it to store data and process information. The smart card has computer intelligence which performs various functions in respect of the stored data (Fick, 2009:4). 2.2.4 Types of Information Systems 2.2.4.1 Expert system – this is knowledge based system that provided expert advice and acts as a consultant to users. These can be credit application advisor or diagnostic maintenance system. 2.2.4.2 Knowledge management system – supports the creation, organisation and dissemination of business knowledge within the organisation. An example of this system is intranet access to best business practices, sales proposal strategies and customer problem resolution systems. 2.2.4.3 Functional business system – support a different operational and managerial applications of the basic business functions of the company. An example of this would be information system that 10 supports applications in accounting, finance, marketing, operations management and human resource management. 2.2.4.4 Strategic information systems – supports operations and management processes that provide an organisation with strategic products, capabilities and services towards competitive advantage. An example of this is internet; buying online and shipment tracking. Advances in in information provision have led organisations to attempt to develop Information Systems or Information Technology strategies which interrelate with business strategies which support corporate missions (Ahlemann, 2009:22). 2.2.5 Information Technology as a Competitive Advantage Tool Gaining a competitive advantage over competitors requires the innovative application of IT (Marakas et al., 2011: 43). Business must be competitive to stay in business. When profits begin to decrease, the business must look for ways to improve its profits. Installing new equipment and systems that allow workers to be more efficient and provide better services in less time is always guaranteed a solution, (Eggland, Dlabay, Burrow, Ristan, 2002:18). Mahmood et al., (2010: 159) argues that competitive advantage in the digital economy is even more important than in the old economy. He believes IT enables companies to gain competitive advantage and to greatly benefit at the expense of those that are subject to competitive disadvantage. Management in its quest to improve service delivery through IT need to state a number of reasons as to why they have interest in inventing into it. The most common includes the need to sustain and improve their competitive position, to increase revenue or reduce costs or to improve flexibility and responsiveness. While these are important, many organisations are driven simply by the need to maintain their position in a highly competitive market place with no exception to the banking sector (Chavan, 2013: 19). For example, FNB has installed automated teller 11 machines (ATM) to increase customer service. This is a result of rapid technological progress and development in the financial market (Johnson, 2005: 69). The banking environment has become highly competitive today. Financial innovations lower costs of capital, reduce financial risk, improve financial intermediation and enhance societal welfare (Agrawal et al., 2012: 90). To be able to survive and grow in the changing market environment banks are going for the latest technologies, which is being perceived as an ‘enabling resource’ (Agrawal et al., 2012: 90). For instance, the internet, competitors are a click away. If clients are not happy with the products, prices or services offered by a particular bank, they are able to change their banking partner much more easily than in the physical real bank-client relationship (Chavan, 2013: 20). An example, is the value use of cellphone banking, customers can pay all their utility bills while at their comfort zone. From the bank’s point of view, the use of internet has significantly reduced the physical cost of banking operations. As discussed by Turner (2001), progress in IT has slashed the cost of processing information while the internet has facilitated its transmission, thus facilitating change in the essence of banking business (Mahmood et al., 2010:158). Innovation in IT has taken an important place in the future development of financial services, especially banking sector transitions are affected more than any other financial institutions (Chavan, 2013: 19) 2.2.6 Business and Information Technology Nyasatu (2012:17) assets that, technology has continuously played an important role in the success of banking institutions through the provision of these services; safekeeping of public money, transfer of money, issuing drafts, exploring investment opportunities and lending drafts, exploring investment being provided. Technology enables sophisticated product development, better market infrastructure, and implementation of reliable techniques for control of risks (Johnson, 2005: 70). IT helps the financial 12 intermediaries to reach geographically distant and diversified markets (Ozuru et al., 2010: 2). The internet has significantly influenced service delivery channels in the banking sector. The internet has emerged as an important medium for delivery of banking products and services and staying ahead of the rivals (Charbaji, 2005: 229). Through the use of internet, the bank is now well informed about their customer’s needs. The customers transact online; get account statements, transfer funds and pay bills by just punching a few keys on their gadgets (Chavan, 2013: 20). The smart card’s such as, cards with microprocessor chips have added new dimension to the scenario. Payments of electricity and telephone bills have become easier. The upgradeability and flexibility of internet technology offer unprecedented opportunities for the banks to reach out to its customer (Andreeson, Grillo and Wyatt, 2013: 1). IT is increasingly moving from a back office function to a prime assistant in increasing the value of a bank over time (Braga, de Freire Fuentes, Freitas, de Carvalho, de Sousa and Bastos (2005:78). IT maximizes banks proactive measures such as strengthening and standardising banks infrastructure in respect of security, communication and networking, achieving inter branch connectivity, moving towards Real Time Gross Settlement (RTGS) environment. The forecasting of liquidity by building real time databases, use of Magnetic Ink Character Recognition and Imaging technology for cheque clearing to name a few (Nyasatu, 2012: 22). The key driver to date has largely been the increasing sophistication in technology and the growing popularity of the internet. The shift from traditional banking to electronic banking is changing customer’s expectations (Agrawal et al., 2012: 90). Customers no longer wait in long queues and spend hours in banking transactions. This change in customer attitude has gone hand in hand with the development of ATM’s, Mobile phone and net banking along with availability of services right at customer’s door step (Agrawal et al., 2012: 90) 13 2.2.7 Competitive Advantage The term competitive advantage is often used when referring to a firm that is leading an industry in some identifiable was. This is when a firm sustains profits that exceed the average for its industry (O’Brien et al., 2011:87). Tompson, Peteraf, Gamble and Strickland (2012: 54) argues that competitive advantage comes from an ability to meet customer needs more efficiently, with products or services that customers value more highly or more efficiently at lower costs. Meeting customers’ need more cost effectively can translate into being able to charge lower prices and achieve higher sales volumes, thereby improving profits on the revenue side as well as the cost side. One of the major factors management in competitive environment is knowledge and companies for achieving the competitive advantage should concentrate in information system. Competitive advantage is the edge that a firm has over its competitors (Salehi, 2010:158). When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. FNB’s goal, like any firm is to achieve a sustainable competitive advantage (Turban, King, Kyu Lee and Viehland, D. 2006:18). Competitive advantage allows the firm to generate greater sales or margins and/or retain more customers than its competitors. The key to winning and keeping customers is to understand their need better than competitors do and deliver more value. (Kotler et al., 2005:270). He also says developing products and services, processes or capabilities that give a company a superior business position relative to its competitors and other competitive forces. There can be many types of competitive advantages, including the firm's cost structure, product offerings, distribution network and customer support. Competitive advantages provide a company with an ability to generate greater value for the firm and its shareholders. The more 14 sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage. 2.2.8 Strategies for Competitive Advantage Mahmood et al., (2010:158) presented the following strategies as cited by Turban (2006): 2.2.8.1 Cost leadership strategy: Produce products and/or services at the lowest cost in the industry. A firm achieves cost leadership in its industry by thrifty buying practices, efficient business processes, forcing up the prices paid by competitors, and helping customers or suppliers reduce their costs. 2.2.8.2 Differentiation strategy: Offer different products, services, or product features. By offering different, “better” products companies can charge higher prices; sell more products, or both. 2.2.8.3 Niche strategy: Select a narrow-scope segment (niche market) and be the best in quality, speed, or cost in that market. 2.2.8.4 Growth strategy: Increase market share, acquire more customers, or sell more products. Such a strategy strengthens a company and increases profitability in the long run. 2.2.8.5 Alliance strategy: Work with business partners in partnerships, alliances, joint ventures, or virtual companies. This strategy creates synergy, allows companies to concentrate on their core business, and provides opportunities for growth. 2.2.8.6 Innovation strategy: Introduce new products and services, put new features in existing products and services, or develop new ways to produce them. Innovation is similar to differentiation except that the impact is much more dramatic. Differentiation “tweaks” existing products and services to offer the customer something 15 special and different. Innovation implies something so new and different that it changes the nature of the industry. 2.2.8.7 Operational effectiveness strategy: Improve the manner in which internal business processes are executed so that a firm performs similar activities better than rivals (Porter, 1996). Such improvements increase employee and customer satisfaction, quality, and productivity while decreasing time to market. Improved decision making and management activities also contribute to improved efficiency. 2.2.8.9 Customer-orientation strategy: Concentrate on making customers happy. Strong competition and the realization that the customer is king; is the basis of this strategy. Web-based systems that support customer relationship management are especially effective in this area because they can provide a personalized, one-to-one relationship with each customer. 2.2.8.10 Time strategy: recognise time as a resource, then manage it and use it to the firm’s advantage. “Time is money,” “Internet time” (that is, three months on the internet is like a year in real time), first-mover advantage, just-in-time delivery or manufacturing, competing in time (Keen, 1988), and other time-based competitive concepts emphasize the importance of time as an asset and a source of competitive advantage. One of the driving forces behind time as a competitive strategy is the need for firms to be immediately responsive to customers, markets, and changing market conditions. A second factor is the time-to-market race. By introducing innovative products or using IT to provide exceptional service, companies can create barriers to entry from new entrants. 2.2.8.11 Lock in customers or suppliers strategy: Encourage customers or suppliers to stay with you rather than going to competitors. 16 Locking in customers has the effect of reducing their bargaining power. 2.2.8.12 Increase switching costs strategy: Discourage customers or suppliers from going to competitors for economic reasons. 2.2.9 Michael Porter two types of Competitive Advantage Porter (2009:62-68), identified two types of competitive advantage as cost advantage and differentiation advantage which both are utilised by FNB. Cost and differentiation advantages are known as positional advantages since they describe the firms’ position in the industry as a leader in either cost or differentiation. 2.2.9.1 Cost Advantage A cost competitive advantage exists when the firm is able to deliver the same benefits as its competitors but at a lower cost. Cost leadership translates into above-average. 2.2.9.2 Differentiation Advantage -Differentiation advantage exists when a firm is able to deliver benefits that exceed those of competing products. 2.2.10 Competitive Advantage Sustainability. Turban et al. (2006) suggest some ways to accomplish competitive sustainability with the help of IT as follows: Ø Using inward systems that are not visible to the competitors. Ø If a company uses outward systems to sustain competitive advantage, one way to protect those systems is to patent them. Ø Developing a comprehensive, innovative, and expensive system that is very difficult to duplicate. Ø Using modified approach. 17 2.2.11 Impact of the internet in the Banking Industry The internet is globally widespread in use, becoming an integral of IT as well as many households. (Oluwagbemi, Joshua and Philip, 2011: 63) According to Turban et al. (2006), because the internet has changed the nature of doing business, it has also changed the nature of competition. Porter (2009) himself argues that the internet does not change the model, but that it is only another tool to be used in seeking competitive advantage. In his words, “The internet per se will rarely be a competitive advantage. Many of the companies that succeed will be the ones that use the Internet as a complement to traditional ways of competing, not those that set their Internet initiatives apart from their established operations” (Porter, 2001:64). Mahmood et al. (2010) again presents discussions by Porter (2001) and Harmon et al. (2001) where they presented some ways the internet influences competition in the five factors: Ø The threat of new entrants. Ø The bargaining power of suppliers. Ø The bargaining power of customers (buyers). Ø The threat of substitute products or services. Ø The rivalry among existing firms in the industry. Porter (2006) concludes by saying that the overall impact of the internet is to increase competition, which negatively impacts profitability. According to Porter, (2006: 66), “The great paradox of the internet is that it’s very benefits—making information widely available; reducing the difficulty of purchasing, marketing, and distribution; allowing buyers and sellers to find and transact business with one another more easily—also make it more difficult for companies to capture those benefits as profits”. The internet has also its own disadvantages; one of the major disadvantages is cybercrime – illegal activity committed on the internet 18 (Mahmood et al., 2010:165). The internet, along with its advantages, has also exposed the society to security risks that come with connecting to a large network. Computers today are being misused for illegal activities like e-mail espionage, credit card fraud, spams, software piracy and so on, which invade our privacy and offend our senses. Criminal activities in the cyberspace are on the rise and FNB is not spared to these challenges (Chavan 2013:19). 2.2.11.1 Internet Banking Reviewed literature defines internet banking as the use of internet to deliver banking activities such as fund transfer, paying bills, viewing current and savings account balances, paying mortgages and purchasing financial instruments and certificates of deposits (Ahasanul et al., 2009: 1877). Singhal (2008) states that internet banking is now used for new age banking system (Chavan, 2013:20). Internet banking or online banking refers to the performing of transaction and payments over the web through the bank. The customer are allowed to do the banking out banking hours and from anywhere through the internet (Awamleh, 2003). The use of internet banking has brought many benefits amongst which include: Ø No barrier limitations, Ø It is convenient to use; it saves time and makes it possible to access the use of innovative product or service at a low transaction fees, Ø It has transformed traditional practices in banking in that it encourages queue management which one of the important dimensions of e-banking service quality (Khan, Mahapatra and Sreekrumah, 2009: 33). Ø Through internet applications is the only way to stay connected to the customers at any time and any place. Ø It results in high performance in banking industry through faster delivery of information from the customer and service provider. 19 2.2.11.2 Automated Teller Machines Automated Teller Machines are computer controlled devises that dispenses cash, accept cash and provide and other customer services for customers who identify themselves with secret pin numbers of their ATM cards. They dispense cash at any time of the day anywhere, where there is an FNB ATM, inside and outside Swaziland. This is a migration from the traditional methods where customers were to queue for a long time in order to get cash or deposit cash (Chavan, 2013:22). ATMs became major revelations for customers, since it offered the facility to avoid long queues in front of the cashiers in banks (Chavan, 2013:22). 2.2.11.3 Cellphone and On-line Banking Cell phone banking is a mode of internet banking that allows customers to operate their accounts with the bank from mobile phones to a large extent as long as their phones and network support short messaging services. Oluwagbemi et al. (2011:63), assets that internet banking also known as ebanking uses Global System Mobile Communication (GSM). He argues that GSM has improved the operational efficiency of many banks. With the aid of information technology, on-line banking provides the ability to pay all their utility bills while at their comfort zone and also for balances (Nyasatu, 2012:42). 2.2.11.4 Electronic Mail Information technology has given rise to electronic mail which enables communication easily across employees, individuals external and across various geographical boundaries. This makes it possible to deliver enhanced customer centric services (Abah, 2011:67). 20 2.3 Information Technology Challenges Information technology especially the internet has given rise to new opportunities in every field society can think of – be it entertainment, business, sports or education (Braga, 2005:138). Innovation in IT has taken an important place in the future development of financial institution, especially in the banking sector (Chavan, 2013: 19). With the fast growing of internet, interest in computer crime, ethics and privacy has increased. These include identity theft, child pornography on websites and credit cards numbers posted on chat rooms (Cullom, 2001: 2). Andreesen et al. (2013:1), argues that there are significant challenges facing IT leaders in the financial sector. Andreesen et al., (2013:1) further mention some of the major challenges include mobile commerce, social media, the safeguarding of client and employee data, risk management, management classification of data, IT infrastructure planning, business continuity and employee retention with the IT field (Mohlala, Goldman and Goosen, 2012:1). There are several classes of activities which may also harm information technology such as viruses, worms, Trojan horse, time bomb logic bomb and trapdoors (Cullom, 2001: 4). “As information and communications technology become even more pervasive and aspects of electronic crime feature in all forms of criminal behaviour, even those matters currently regarded as ‘traditional’ offences (Gordon and Ford, 2006:14). The growth in information society is accompanied by new and serious threats, it involves drugs trafficking, people smuggling and money laundering (Etter, 2001: 23). Essential services such as water and electricity supply heavily rely on ICTs. Attacks against information infrastructure and internet are high and are causing enormous financial damage (Andreesen et al., 2013: 2). 2.3.1 Cybercrimes Cybercrime is a growing threat in a world where most individuals and organisations rely upon the internet and connected technologies, opening 21 themselves up to the attack risk from global criminals around the world (Sommer, 2011:3). Jiabao (2010:4) defines cybercrime as an economic crime committed using computers and internet. It includes distributing viruses, illegal downloading files, phishing and pharming, and stealing personal information like bank details. Criminal actions accomplished through the use of computer system, especially with internet to defraud, destroy or make authorised use of computer system resources (Marakas et al., 2011:672). BaFin, the German financial services regulator asserts that the risk arising from any abuse of the financial system for money laundering purposes apply equally if criminals seek to embroil it in the financing of terrorism or in acts of the fraud (Sommer, 2013: 3). It, is therefore especially important that financial institutions do their utmost best to combat and prevent cyber-crimes (Veter, Cho and Sidebottom, 2012: 6). Cyber-crime is becoming more intense as there is an increase in Net’s growth business. Criminals are doing everything from stealing intellectual property and committing fraud to unleashing viruses and committing acts of cyber terrorism (Marakas et al., 2011:568). Thieves have at their fingertips a dozen tools form “scans” that ferret out weakness in website software programs to “sniffers” that snatch passwords (Marakas et al., 2011:569). Dlamini (2014) in a report adopted on Cybercrime in Commonwealth countries in Botswana stated that Cybercrime is estimated to cost the global economy US$200 billion (R2 trillion) and is regarded as a serious concern to both developing and non-developing countries. In endorsing the report, ministers recognised that Commonwealth is leading the way in developing mechanisms to combat cybercrime (Dlamini, 2014: 18). Criminals now use the internet for extortion, fraud, money laundering and theft because IT lets them carry out these crimes more efficiently and with less risk (Fick, 2009: 1). Internet provides criminals a way to move money rapidly among bank accounts and countries. This nature of internet makes 22 it difficult for police to follow transactions to gather evidence, and national laws differ enough to make prosecution difficult (Fick, 2009:1). Cybercrimes can be basically divided into 3 major categories (Williams, 2008:3) 2.3.1.1 Cybercrimes Against Persons Cybercrimes committed against persons include various crimes like transmission of child-pornography, harassment of any one with the use of a computer such as e-mail. The trafficking, distribution, posting, and dissemination of obscene material including pornography and indecent exposure, constitutes one of the most important cybercrimes known today (Olusola, Samson, Semiu and Yinka, 2013:20). This is one cybercrime which threatens to undermine the growth of the younger generation as also leave irreparable scars and injury on the younger generation, if not controlled (Fick, 2009:7-8). 2.3.1.2 Cybercrimes Against Property Cybercrimes against all forms of property are crimes that include computer vandalism (destruction of others' property), transmission of harmful programmes such as virus or denial of the entire property (Olusola et al., 2013:20). An example of this is the Mumbai-based upstart engineering company lost a large amount of money in their business operation when their rival company, an industry major, stole the technical database from their computers with the help of a corporate cyber spy. 2.3.1.3 Cybercrimes Against Government The category third of Cyber-crimes relate to Cybercrimes against Government. Cyber terrorism is the leveraging of organisations computers and information particularly via internet to cause physical hard or disruption of infrastructure (Marakas et al., 2011: 571). The growth of internet has shown that the medium of Cyberspace is being used by 23 individuals and groups to threaten the international governments as also to terrorise the citizens of a country (Olusola et al., 2013:20). This crime manifests itself into terrorism when an individual "cracks" into a government or military maintained website. 2.3.2 Card Skimming ‘Card skimming’ is the illegal copying of information from the magnetic strip of a credit or ATM card which FNB is also a victim of (Fick, 2009: 9). South African Banking industry has experienced a high volume of incidents of card skimming. Criminals when skimming they use devices which has a software program that is designed to overcome security measures on ATMs (Fick, 2009:9). Smart (2013), says card fraud has doubled over the year 2009. “Even we were surprised,” Pieter du Toit, CEO of FNB said, “We expected an increase—but a 100% increase is frightening.” This specifically relates to cheque and debit card fraud as credit card fraud has actually decreased by around 40% (Du Toit, 2010:8). Dube (2014) said the most common fraud in Swaziland is card skimming, whether at ATMs or points of sale. At ATMs, fraudsters tamper with the ATM so customers can’t insert their cards. The fraudster then “assists” the customer by “cleaning” the card and skimming it, unjamming the ATM in the process and “shoulder-surfing” to get the PIN. Another trick is to wait until a customer has completed a transaction, then calling the customer back and saying the transaction isn’t complete. The customer then has to put his card into the ATM once again, and enter his pin. Once again, the fraudster “shoulder-surfs” the PIN. The fraudsters can use a high-tech skimming device on a Saswitch machine. The ATMs are jammed, so customers are directed to the Saswitch, where the card is skimmed and the PIN is viewed by either camera or Bluetooth device (Du Toit, 2010 :8). 24 2.3.3 Macro-environmental Effects (Political, Ethical, Economic, Social Technological) 2.3.3.1 Ethical controversy Information technology has caused ethical controversy in the areas of intellectual property rights, customers and employees’ privacy, security of company information and workplace safety (Marakas et. al., 2011: 565). The legal, technical and institutional challenges posed by the issue of cybercrime are global and far-reaching. It can only be addressed through a coherent strategy taking in to account the role of different stakeholders and existing initiatives, within a framework of international cooperation (Andreesen et al., 2013:2). Confidentiality, integrity, and authentication are very important features of the banking sector and were successfully managed over the pre-internet times. Communications across an open and thus insecure channels such as internet might not be the best for bankclient relations as trust might partially be lost (Chavan, 2013: 24). 2.3.3.2 Cyber Law – Political and Legal This term describes law that intends to regulate activities over the internet via the use of electronic data communication. However, integration between technology and law is controversial. Cyber law encompasses a variety of legal and political issues related to the internet and other communication technologies, including intellectual property, privacy, freedom of expression and jurisdiction. Legal and regulatory compliance is inadequate (Chavan, 2013:22). The criminal abuse of information technology and the necessary legal responses are issues that still challenging in the constant technical development as well as the changing methods and ways in which offences are committee (Gercke, 2012:12). Technological boom is not only susceptible to, but may exacerbate some of risk, particularly governance, legal, operational and reputational which is inherent in traditional banking. This poses new challenges; however some economies have modified their regulations to achieve their main objective; 25 ensuring the safety and soundness of their banking systems (Fick, 2009:3). Law enforcement with regard to investigating crimes and handling evidence, dealing with offenders, and assisting victims, poses complex new challenges (Chavan, 2008:8). Chavan (2008) further argues that, there is an unprecedented need for international commitment, coordination and cooperation since cyber-crime is truly a global phenomenon. The legal concepts are hardly designed to cope with today’s advancing technology, nor the traditional methods of detection, investigation and prosecution of crime designed to bring cyber criminals in to book (Fick, 2009:3). 2.3.3.3 Economic Challenges This includes factors at the local, state, national, or international level that affect firms and industries. These include the rate of economic growth, unemployment rates, inflation rates, interest rates, trade deficits or surpluses, savings rates, and per capita domestic products (Skhosana, 2007:8). Some industries, such as banking, are particularly vulnerable to economic downturn but are positively affected by factors such as low interest rates. Others, such as discount retailing, may benefit when general economic conditions weaken, as consumers become more price – conscious (McConnell et al., 2008). Ø Inflation – this is continual rise in the general price level (Mohr, Philip and Associates, 2008: 140), inflation introduces uncertainly into decision making for Shoprite. Inflation can be demand pull or cost push. Demand pull occurs when the demand for goods and services is higher than the supply (too much money chasing a few goods) while cost push inflation occurs when costs of production continually increases, resulting to increasing the selling price. Inflation then reduces production which Shoprite is also not immune to do. 26 Ø Business cycle this is the pattern of expansion and contraction of economic activation around a long-term growth (Mohr, 2012). Shoprite and its customers must make certain value adjustment during the various phases of the business cycle in order to adapt to emerging economic realities. So in these phases Shoprite profit decline during recession and grow during business boom. Ø Interest rates – this is price paid for money (Mohr et al., 2008: 140). In times of recession or business boom the reserve bank uses interest rather to influence the money supply. For Shoprite to increase its production he has to increase capital or investment. Interest rates have an inverse relationship to investment (McConnell et al., 2008: 56). Mohr (2012), highlight the following implications of higher interest rates; Debt financing becomes more expensive and places Shoprite’s liquidity under pressure. High interest rates can dissuade the consumers from buying durables products like furniture, electrical and household appliances. Shoprite allows consumers to buy these items on hire- purchases basis and these higher interest rates discourages such purchases and thus leading to slow business for Shoprite. 2.3.3.4 Social Challenges This includes the societal values, altitude cultural factors and lifestyle that will or does impact on Shoprite business (Saunders, Lewis and Thornhill, 2009:151). Social forces vary by local and charge overtime. Innovations lower costs of capital, reduce financial risks, improve intermediation, and enhance welfare while on the other hand increase unemployment (Olugwabemi et al., 2011: 91). 2.3.3.5 Technological advancement challenges This increase in innovations are a regulations, globalization, result of number of government’s integrations with financial markets and 27 increasing risk in the domestic financial markets (Olugwabemi et al., 2011: 90). 2.3.3.5.1 Software Piracy Software piracy is theft of software from computers by thieves who illegally copy software on line (Marakas et al., 2011: 565). Some cyber criminals compel users to download certain software, while such software is presented as a antivirus, after some time it starts attacking the user’s system. Then the user has to pay the criminals to remove such viruses (Bajaj, 2008: 6). 2.3.3.5.2 Computer viruses and worms This is a major computer crime performed by thieves by creating computer viruses. (Marakas et al., 2011: 576). A virus is a program code that cannot work without being inserted into another program. It typically enters computer systems through emails or file attachments via internet and affects the storage devices of a computer or network, which then replicate information without the knowledge of the user (Bajaj, 2008:6). 2.3.4 Employee Retention within the Information Technology is a Challenge The IT industry in Southern African Banks is faced with a shrinking pool of skilled employees causing demand to increase for these employees (Mohlala et al., 2012: 1). This common dependency of IT employees could be devastating to a business if some of the key employees were to leave. The business impact may include loss of corporate memory, disrupted projects that may over-run on defined schedules and budgets and quality (Mohlala et al., 2012:1). In order to stay abreast of this decline, technologically advanced organisations are increasingly on the lookout for highly skilled workers, whilst the labour market is dominated by people with limited skills (DPRU, 2006:1). 28 2.3.4.2 Advancing Technology According to Gaylard, Sutherland and Viedge (2005:8) the life span of information technology knowledge is approximately 2.5 years, and is rapidly decreasing all the time. This decrease is the result of advancing technology that is now used to store, organise and easily retrieve existing information (Mohlala et al, 2012:2). Hira (2008:1) raised a concern that skills shortages must not be confused with the shortage of unique skills required to support the emerging technologies, because skills, by definition will always be short in supply. 2.3.4.3 High Employee Turn-over Employee turn-over has also been identified by information technology experts as one of the reasons that a retention strategy in needed. Fheili (2007:69) argues that employers need to focus on the causes of employee turnover in an attempt to eradicate the effects thereof. 2.3.4.4 Lack of employee development The lack of employee development has led to a major debated in the information technology industry. Experts who oppose the view of skills shortages state that the existing skills gap problem can be attributed to employees not being willing to train their employees (Mohlala et al., 2012:2). Dubie (2008) explains that one of the contributing factors to information technology skills shortages it that organisations are not willing to invest time and money to train their employees. 2.3.5 Bandwidth Problems (if network present) There are some banks where network already exists but they do not have enough bandwidth to bear the traffic load (Ahmed et al., 2006:73). When bandwidth is not enough there is usually a traffic jam and customers have 29 challenges of failed transactions when doing internet banking. This also poses the threat of hacking by criminals (Andreesen et al., 2013: 8). 2.4 Conclusion The twenty-first century has brought about an all-embracing convergence of computing, communications, information and knowledge information has emerged as an agent of integration and the enabler of new competitiveness for today’s enterprise in the global marketplace. Due to that strategic IS supports or shapes competitive strategies, the concepts of information system is so important. IT can be used to support a variety of strategic objectives, including creation of innovative applications, changes in business processes, links with business partners, reduction of costs, acquiring competitive intelligence, and others. According to above subject it can say one of the important factors in new challengeable business environment is emphasis on strategic IT and this is no ended research topic. The growth of high speed networks, coupled with the reducing cost of computing power, is making possible applications undreamed of in the past. Multimedia, and video are now easily transferred around the world in micro-seconds. This explosion of technology has changed the banking industry in Swaziland from traditional to digital and networking banking services has changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems First National Bank use to interact with their customers. All over the world, banks are still struggling to find a technological solution to meet the challenges of a rapidly-changing environment. FNB with the ability to invest and integrate information technology has become competitive. This chapter reviewed literature relevant to the study. The next chapter discusses the research design and methodology adopted in this study. 30 CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Introduction Research methodology is a way to systematically solve the research problem (Pearson, Wiechula, Court, and Lockwood, (2005: 10). Research is defined as a scientific and systematic search for pertinent information on a specific topic or an art of scientific investigation (Redman and Mory, 2009:10) while Abrahams (2011:1) assets that research is organised, structured and purposeful investigation aimed at discovering, interpreting, and revising human knowledge on different aspect of the world by someone first hand. This chapter outlines the research design adopted and the research methodology employed in the investigation. A description of the participants and the data gathering technique employed is provided, explaining how the data were gathered and analysed. The chapter concludes with details regarding ethical considerations and the measures employed to ensure the trustworthiness of the study (Nyasatu, 2012:2). 3.2 3.2.1 The Research Philosophy Quantitative Research According to Bennett (2003:97), quantitative research is the use of data which uses numbers and can be analysed by statistical techniques if drawn from a wide sample. Quantitative research is predominantly used as a synonym for any data collection technique such as questionnaires or data analysis procedure such as graphs or statistics that generates or uses numerical data (Saunders et al., 2009:151). 3.2.2 Qualitative Research Qualitative research is used predominantly as a synonym for the data collection technique such as interviews or data analysis procedure such as categorising data that generates non-numerical data (Saunders et al., 2009: 31 151). Qualitative research denotes the type of enquiry in which the characteristics, qualities and or properties of a phenomenon are examined for better understanding (Henning, Van, Rensburg and Smith, 2005: 5). For the purpose of this study, the quantitative research methodology was adopted. The use quantitative methodology is important to explore real organisational goals, processes, weaknesses and links (Gerhard, 2004:10). It is often assumed that quantitative research is precise and easy comparable to that it is based on hard evidence, which is usually acquired through questionnaires and surveys (Moodley, 2011:34). 3.3 Research Strategies A research strategy is a plan or blueprint for conducting the study that maximises control over factors that could interfere with the validity of the findings (Nyasatu, 2012:20) while Saunders et al. (2009:136), states that research strategy is the general plan of how a researcher go about answering research questions. Research strategy is the conceptual structure which research would be conducted and contains clear objectives derived from the research questions which are intended to collect data, considering constrains will be encountered and also discussing ethical issues (Kumar, 2005:19). According to Moodley (2011:32) there are five research designs as follows; exploratory, correctional, descriptive, explanatory and casual-comparative research design. He (2011), further assets that most researchers utilise three types of research design to achieve its objectives, namely; exploratory, descriptive and or explanatory research. Surveying involves gathering information from individuals using a structured or open-ended questionnaire or an interview (Nyasatu, 2012:24). 32 3.3.1 Exploratory Research Exploratory research refers to finding out what is happening to find new insights, ask questions and assess phenomena in the new light (Saunders et al., 2009:139). According to Copper and Schindler (2008), an exploratory research assists researchers in developing concepts more clearly, establishes priorities and developing operational definitions while improving final research designs. Exploratory is useful when a researcher wish to clarify an understanding of a problem (Kuvaas, 2008:2). The purpose of this type of research is to narrow the scope of the research topic progressively as the research progresses (Cant, Gerber-Nel, Nel and Kotze, 2005:18). There are three ways of conducting exploratory research, being; a search for literature; interviewing experts in the subject and conducting focus group interviews (Saunders et al., 2009: 140). 3.3.2 Explanatory Research Explanatory research studies the casual relationship between variables, it emphasises on studying the situation in order to explain the relationship between the variables (Saunders et al., 2009:141). Moodley (2011:33) argues that explanatory research attempts to go above and beyond exploratory and descriptive research to identify the actual reasons a phenomenon occurs. 3.3.3 Descriptive Research The objective of descriptive research is to portray an accurate profile of persons, events or situations. It may be an extension of, or a forerunner to, a piece of exploratory research or, more often, a piece of explanatory research (Robson, 2009:140). According to Kumar (2005:10), descriptive research attempts to systematically describe a situation, phenomenon, service or program, or describes attitudes towards an issue. Moodley (2011:32), asserts that there are two types of descriptive research methods; 33 qualitative and quantitative research. Both qualitative and quantitative methods may be used appropriately with any research paradigm. The study used the quantitative approach through questionnaires and surveys. 3.4 Target Population Target population is defined as the universe of units from which a sample or data is to be collected (Bryman, 2008:697). He (2008), further describes target population as the source of population or people from which cases and controls are selected, while Saunders et al. (2009:212) describe population as the full set of cases from which a sample to taken. This part of research involves analysis of data taken from a total population of three hundred and twenty four (324) employees from First National Bank Mbabane. 3.5 Sampling Sampling design is the procedure of selecting non-overlapping sample units to be included in a sample (Nyasatu, 2012:22) while Kumar (2005:24) describes a sample as a segment of the population selected to represent the population as a whole. Ideally, the sample should be representative and allow the researcher to make accurate estimates of the thoughts and behaviour of the larger population. Moodley (2011:35) argues that when conducting research it is not always possible to include the entire study population in the study, hence a representative sample must be chosen from the population. Small sample size may yield results that are not conclusive, while, large sample size usually yields more reliable results (Moodley, 2011:35). For this research a total of 50 respondents were chosen, with forty nine (49) questionnaires being administered to FNB employees from the ICT and service centre department and one (1) Police from Fraud and Commercial 34 Unit (CID). For the purpose of this study, the researcher used the probability sampling technique applying random sampling. Random sampling involves selecting the sample at random from the sampling frame using a number of tables, a computer or an online random number generator, such as research randomizer (Saunders et al., 2009:222). 3.6 The Research Instrument A questionnaire was designed and developed as shown in appendix A. The questionnaire was preferred because of the following advantages: Ø The questionnaire offers a great sense of anonymity to the respondents and at the same time the researcher getting an opportunity to collect the respondents’ thoughts and facts and to give consideration to their replies (Moodley, 2011:35). Ø The questionnaire has less pressure, feasibility and attainable means of collecting data (Pramal, 2004:102). However, there are disadvantages when using questionnaires (Pramal, 2004:102-103). Ø The organisations due to work pressure are often not able to utilise company time to complete questionnaires, The illiterate respondents will be unable to respond to the questionnaire Ø because of difficulties in reading and writing and the researcher is not having the opportunity to correct misunderstanding where the respondents may have. 3.7 i) Questionnaire Construction The likert scale is the most widely used questionnaire and most convenient when one wants to measure a construct (Maree, 2008:167). 35 ii) The questionnaire was presented using a Likert-scale with strongly agree forming one end of the continuum and strongly disagree at the other end. iii) The questionnaire used is divided into three sections, starting with the biographical followed by the contributing factors and lastly challenges hindering the attainment of competitive advantage. 3.8 Pilot Study A pilot study was conducted with six respondents from the Central Bank of Swaziland staff members who are FNB customers. Benefits of conducting a pilot study is that it may give warning on possible failure of the main research project, guidance on where protocols may not be flowed, or whether research instruments are inappropriate (Moodley, 2011:37). Piloting a questionnaire is crucial as the researcher needs to assess how long it will take to expose any items that will not generate usable data (Naidoo, 2010:35). Comments on representation and sustainability of the questions should be sought from experts by the researcher and also allowing suggestions on the structure of the questionnaire (Saunders et al., 2007:386). 3.9 Questionnaire Administration According to Saunders et al. (2007:389), administration of the questionnaire includes gaining access to the sample and attempting to increase the rate of response. Personally distributing the questionnaires to individuals helps in establishing rapport with respondents and utmost confidentiality assurance (Moodley, 2011:37). The questionnaire was personally distributed by the researcher to the respondents by hand delivery and through emails. Whilst personally handing out the questionnaire, the nature and objective of the study was explained to the 36 respondents and they were assured of confidentiality. The respondents were very enthusiastic afters realising that the questionnaire did not entail their identification. The researcher collected the questionnaire from respondents’ upon completion. 3.10 Data Analysis Data obtained through questionnaire, interviews and observations or through secondary sources need to be analysed for deductions (Thompson, et al., 2012:414). Data analysis can be referred to the conversation of a raw data into useful information that will provide most value to the organisation (Hanuman, 2006:63). The data obtained in this research was analysed using Statistical Package for Social Science (SPSS). Each questionnaire was given a unique identification number for entry and analysis in SPSS. 3.10 Validity and Reliability 3.11.1 Validity Validity is defined as the degree to which the researcher has measured what it set out to measure (Kumar, 2005:153). Saunders et al. (2009: 372) asserts that validity determines whether the research truly measures that which it was intended to measure or how truthful the research results are. Generally, validity is determined by asking a series of questions, and often looks for the answers in the research of others (Nyasatu, 2012: 28). Cooper and Schindler (2008: 154) mention three classifications of validity that are widely accepted being content validity; predictive validity and construct validity. Ø Content validity refers to the extent to which measurement device, in our case it is the questionnaire, provides adequate coverage of investigative questions (Cooper et al., 2008: 154). 37 Ø Predictive validity, sometimes known as criterion-related validity, is concerned with the ability of the measure, in this case, it is the questionnaire to make accurate predictions (Cooper et al., 2008: 154). Ø Construct validity refers to the extent to which measurement questions actually measure the presence of those constructs you intend them to measure. Moodley (2011: 43) says construct validity refers to a measure that may be valid for one population or group but not another. Questionnaire biasness was minimised through extensive literature survey conducted to identify variables that should be included in the questionnaire. The design of the questionnaire and results of the pilot study were considered to ensure that the terms were non-leading and not ambiguous. Effort was made to get maximum response from respondents. 3.11.2 Reliability Reliability is the extent to which a test produces similar results under constant conditions on all occasions or scenarios (Sutherland, 2006: 47). Sutherland (2006) further defines it as the consistency in measurement. In a nutshell, reliability is the extent at which different administrations or experiments will give the same results. While, on the other hand Johansson (2010: 21) assets that reliability is determined when different threats to reliability are considered; which include participant bias and error, observer bias and error. Saunders et al. (2009: 373) defines reliability as the extent to which results are consistent over time and an accurate representation of the total population under study is referred to as reliability and if the results of a study can be reproduced under a similar methodology, then the research instrument is considered to be reliable. From the results obtained it was evident that respondents answered in the same consistent manner despite being from different branches. This showed the consistency and reliability of the research instrument design, content and administration. 38 3.12 Limitations of the research The research was only limited to information communication technology personnel and service centres not all at FNB staff in Mbabane. As such, even though the choice of longitudinal horizon could have added value to the findings of the study, it is not feasible in this context. However, the sample represented all the same level staff in all the FNB branches all over the country, as they all have similar experiences in similar work environments. 3.13 Elimination of Bias Saunders et al. (2007: 267) state that bias can be either internationally distorting data or change the way data is collected. Biasness was minimised through extensive literature survey conducted to identify variables that should be included in the questionnaire. The design of the questionnaire and results of the pilot study were considered to ensure that the terms were non-leading and not ambiguous. The organisation the which was chosen to research, is not the researchers’ work place, which means there is no conflict of interest which may lead to compromise to the study. In this case study, the sample included people of all ages, position levels, different educational background and both ladies and gentlemen. 3.14 Ethical Considerations According to Schindler (2008: 87), ethics is a standard of behaviour that guides moral choices about our behaviours and relationship with others. Saunders et al. (2007:104) further asserts that the ethics of a research design has very important implications for the negotiation of access to people and organisations and the collection of data. The study complied with ethical principles of beneficence, respect for persons and justice, protecting the right of the informants and the institution as well as scientific integrity of the research. The principle of beneficence means that 39 the study does not harm others intentionally through lack of knowledge or by negligence (Saunders et al., 2007: 268). The researcher is aware of the importance of minimising the subject’s level of anxiety or stress, and of the absolute requirement of not divulging any information obtained from interviews. Efforts were made to explain the purpose and significance of the study and to assure subjects about confidentiality of the information was sought. The names of respondents were not be sought or used in relation to the information provided. 3.15 Conclusion The research methodology for this research has been explained. The rational for the study as well as research strategy have been described. The research instrument and the sampling methods used have been specified, as well as the data collection process and data analysis was discussed. The elimination of biasness and ethical considerations were included in the chapter. The next chapter, presents the results, discussions and interpretations of the findings of the study. 40 CHAPTER FOUR: RESULTS, DISCUSSIONS AND INTERPRETATION OF FINDINGS 4.1 Introduction This chapter reports on the results of this study. According to Grosshans (1992), data analysis is more than number crunching, but it is an activity that permeates all stages of a study (Saunders et al., 2009:451). Each response has been graphically presented in accordance to the questionnaire. This allows identification of problem areas that require attention, starting with the biographical followed by demographics. Contributing factors and challenges hindering the attainment of competitive advantage were scrutinised in terms of their distribution and percentage responses, transforming the data into across range of its categories. The findings of the research study are linked to the literature review. The findings information, are presented components in three contributing main towards sections, demographic achieving competitive advantage and challenges thereof. 4.2 Response Rate Table 4.1 : Response Rate Details # of questionnaires Percentage represented Questionnaires distributed 50 100% Returned 49 98% Not returned 1 2% As reflected in Table 4.1 above, forty nine out of fifty (total sample) respondents took part in the survey. Questionnaires were delivered by hand to the respondents. A response rate of 98% was achieved. 41 4.3 Biographical Data 4.3.1 Ages of Respondents Figure 4.1 : Age 14% 6% 4% 27% Below 21 21-30 31 - 40 41 -50 50+ 49% Figure 4.1 above indicates that only 4% of the respondents represent the age group below 21 years; 27% represent the age group between 21 to 30 years. The figure shows that 49% of the respondents represent the middle age group ranging between 31 to 40 years; while 6% and 14% represent age group 41 to 50 and 51 and above respectively. Due to the difficulty of being able to retain IT personnel, it is crucial for employers to devise retention strategies in order to retain these skills (Mohlala et al., 2012:1). In order stay abreast of this challenge, technologically advanced organisations are increasingly on the lookout for highly skilled workers, whilst the labour market is dominated by individuals with limited skills (DPRU, 2006:1) 42 4.3.2 Gender of Respondents Figure 4.2 : Gender 60 57% 43% 40 20 0 MALE Gender FEMALE Figure 4.2 above indicates that 57% of respondents are males while only 43% are females. Women are needed on any organisational teams because of their coordination preference more than their male counterparts (Zoogah, Vora, Richard and Peng, 2008:11). 4.3.3 Positions of Respondents Figure 4.3: Positions Held 2% 10% 39% Supervisory Middle management Senior management Other 49% Figure 4.3 above indicates that 39% of the respondents are at supervisory level, 49% represents middle Management. The figure further shows that 43 10% of the respondents represent senior management while 2% represent the only interviewed police officer. A chain of command is an effective business tool to maintain order, enforces responsibility and accountability (McDonough, 2011: 3). 4.4 Demographics 4.4.1 Highest Education Level Figure 4.4: Educational Level 60% 41% 40% 20% 16% 29% 12% 0% 2% Matric Diploma Degree and below Post Graduate Other Figure 4.4 above indicates that 16% of respondents hold only matric and 2% represent other qualifications. The figure also shows that 41% of respondents represent diploma holders, 29% represents respondents with degrees while 12% represents respondents with post graduate qualification. Employees who pursue post- secondary education are perceived to be more ambitious, motivated, self-confident and trainable than those who are nondegree holders (Silman, 2011:1). Nadiadwala (2010:2) attests to that academic qualification are essential in order to gain good exam grades or a degree. The level of education affects the way people work and think in any organisation (Nyasatu, 2012 :18). 44 4.4.2 Which branch are you based in? Figure 4.5 : Branches 37% 33% 40% 24% 30% 20% 4% 10% 2% 0% Figure 4.5 above indicates that 33% of interviewed respondents are based at First National Bank Head Office, 37% of respondents represent employees based at Corporate Place branch while 24% and 4% are based at Swazi Plaza and the Mall respectively. The remaining 2% represents the only police officer questioned who is based at Mbabane Police Station. 4.5 Components of Information Technology that are Contributing towards Attaining Competitive Advantage. 4.5.1 Information Technology is a Competitive Tool Figure 4.6: Information Technology 4% Strongly Agree 20% 37% Agree Neutral Disagree Strongly Disagree 39% 45 Figure 4.6 above indicates that 37% of respondents strongly agree that Information Technology is a competitive tool in the financial sector and 39% agree to same. A further 20% of the respondents neither agree nor disagree to the statements while only 4% of respondents disagree that IT is a competitive tool in financial sector. IT is one of many tools managers use to cope with change (Laudon et al., 2012:52). Perhaps one can safely say advances in information provision have led organisations to develop IT strategies which interrelate with their corporate strategies (Nyasatu, 2012:4). 4.5.2 Business and Information Technology Play an Important Role Figure 4.7 : Business and Information Technology 18% Strongly agree 43% Agree Neutral Disagree Strongly disagree 39% Figure 4.7 above indicates that 43% of respondents strongly agree that business and IT play an important role in success of financial institutions, while 39% agree. Only 18% of respondents neither agree nor disagree while none of the respondents disagree. Gaining a competitive advantage over competitors requires the innovative application of IT (Marakas et al., 2011:43). This is evidenced by FNB being declared the winner by “The Banker, 2014” (Shongwe, 2014:21). 46 4.5.3 Well-developed Information Technology Infrastructure and Software impact positively to competitive advantage of the organisation. Figure 4. 8: Infrastructure and Software 70.0 59% 60.0 50.0 40.0 30.0 25% 20.0 12% 10.0 2% 2% Disagree Strongly disagree 0.0 Strongly agree Agree Neutral Figure 4.8 above indicates that 25% of interviewed respondents strongly agree that a well-developed IT infrastructure and software impacts positively to competitive advantage. The figure also shows that 59% of the respondents agree, 12% neither agree nor disagree while 2% strongly disagree and disagree respectively. Thomas (2014:18) asserts that to become effective in this new driven world, organisations must move to the next generation of automation, one that understands the requirement of business applications and responds to these requirements in real time. Old fashioned software often leads to ineffective, underutilised infrastructure and diminishes the ability of the IT to respond to the business needs effectively (Thomas, 2014:18). 47 4.5.4 Human Capacity Contributes Immensely to Competitive Advantage in the Banking Sector Figure 4.9: Human Capacity 4% 20% Strongly Agree 25% Agree Neutral Disagree Strongly disagree 51% Figure 4.9 above indicates that 20% and 51% of interviewed respondents strongly agree and agree respectively that human capacity contributes immensely to competitive advantage. The figure shows that 25% of the respondents neither agree nor disagree, while only 4% of respondents disagree that human capacity contributes to competitive advantage. Mohlala et al. (2012) argue that the IT personnel are crucial. Bogatsu (2014:11) applauds FNB staff members being the drivers of the various innovation that have been launched in the past, which qualified First National Bank to be the Banker of the year. 48 4.5.5 Internet has impacted positively on the success of the banking industry towards attaining competitive advantage. Figure 4.10: Internet positively impacting to competitive advantage 4% 4% 33% 20% Strongly Agree Agree Neutral 39% Disagree Strongly disagree Figure 4.10 above shows that 33% of the interviewed respondents strongly agree that internet has impacted positively on the success of the banking industry. 39% of the respondents agree, while 20% remain neutral. Only 4% of respondents both represent those who disagree and strongly disagree respectively. The internet has moved real banking behaviour closer to neoclassical economic theories of market functioning (Chavan, 2013:20). The ability of most modern organisations to use IT efficiently, significantly contributes to their success. (Mohlala et al., 2012:1). The financial products and services have become available over the internet which has thus become an important distribution channel for a number of banks (Chavan, 2013:21). 49 4.5.6 ATMs have become the major revelation for customers Figure 4.11: ATM’s 6% 2% 25% 18% Strongly Agree Agree Neutral 49% Disagree Strongly disagree Figure 4.11 above indicates that 25% of the respondents strongly agree that ATMs have become the major revelation for customer while 49% agree. The figure indicates that 18% of the respondents remain neutral while 6% and 2% of the respondents represent those who disagree and strongly disagree respectively. Known for its slogan “How can we help you”, FNB still maintains its benchmark as the bank that currently has the largest ATM network in Swaziland with 65 full ATMs countrywide (Shongwe, 2014:21). According to the country’s business year book (2014), the bank also boasts four mini ATMs in small towns like Bhunya, Mhlambanyatsi, Ezulwini, to name a few, and 35 slimline ATMs. Sourced from the FNB website, the Mini ATM is similar to a normal ATM, except instead of dispensing cash, it issues a voucher redeemable for cash in store where it was purchased for areas without ATM infrastructure. Meanwhile, the slimline ATM is an innovative touch screen ATM installed in retail spaces that allows you to perform a variety of transactions. The slimline ATMs do not dispense cash. Rather, a slip is issued and then cashed at the retailer’s till (Dlamini, 2014: 21). 50 4.5.7 Cellphone banking is widely accepted by customers. Figure 4.12 : Cellphone Banking 10% 12% Strongly Agree Agree 20% 31% Neutral Disagree Strongly disagree 27% Figure 4.12 above indicates that 12% of the respondents strongly agree that cell phone banking is widely accepted by customers, while 31% agree. The figure shows that 27% of the respondents remain neutral, while 20% and 10% disagree and strongly disagree respectively. According to FisherFrench, (2007) and Masocha et al., (2011), cellphone banking is considered the way of the future. 4.5.8 Electronic mail contributes to competitive advantage Figure 4.13 : Electronic Mail 43% 45.0 40.0 33% 35.0 30.0 25.0 20.0 15.0 14% 10% 10.0 5.0 0.0 Strongly Agree Agree Neutral Disagree Strongly disagree 51 Figure 4.13 above indicates that only 14% of the respondents strongly agree that electronic mail contributes to competitive advantage. The figure further indicates that 43% of the respondents agree, while 33% remain neutral. Only 10% of the respondents disagree. The availability of banker’s information provides bankers and customers with a powerful vehicle for research (Oluwuagbem et al., 2011:66). 4.5.9 More customers prefer using over the counter services than ATMs and Internet Banking Figure 4.14: Over the Counter Service 12% 25% Strongly agree Agree 27% Neutral Disagree Strongly disagree 20% 16% Figure 4.14 above indicates that 12% of the respondents strongly agree that more customers prefer using over the counter services than internet services. A further 27% of the respondents agree, while 16% remained neutral. The remaining 20% and 25% of the respondents respectively disagree and strongly disagree. Some facilities lack user friendliness or lack of the online facility in the current bank they are using (Brodie, Winkjofer, Coviello and Johnston, 2007:23). Agrawal et al. (2012) argues that many customers still prefer to have a personal touch with their branches. A study by IAMAI (2013), it was found that the people that are not doing financial transactions on the bank’s internet sites because of reasons such 52 as security concerns (43%), preference for face-to-face transacting (39%), lack of knowledge about transferring online (22%), lack of user friendliness (10%) and lack of facility in the current bank (2%) (Chavan, 2013: 22). 4.5.10 Expenditure on development of Information Technology and immense training contribute to attaining competitive advantage Figure 4.15 : Expenditure on Information Technology 8% 8 16% Strongly agree Agree Neutral 19% Disagree Strongly disagree 49% Figure 4.15 above indicates that 16% of the interviewed respondents strongly agree that expenditure on information technology development and immense training contribute to competitive advantage. A further 49% of the respondents agree while 19% remain neutral. The figure further shows that 8% of the respondents both disagree and strongly disagree respectively. Thomas (2014:18) asserts that you cannot shift to software defined data centre overnight, neither sticking to old labour intensive ways. Thomas (2014), further says infrastructure within data centres has become increasingly heterogeneous and complex to manage, but that must not stop organisations to invest in the development of infrastructure and software. 53 4.6 Challenges Hindering the Attainment of Competitive Advantage 4.6.1 Information Technology through internet has given rise to cybercrime Figure 4.16: Cybercrime Increase 8% 22% Strongly Agree Agree 27% Neutral Disagree Strongly disagree 43% Figure 4.16 above indicates that 22% of the interviewed respondents strongly agree that IT has given rise to cybercrime. 43% of the respondents agree, while 27 % remain neutral. Only 8% of the respondents disagree. Cybercrime has become a global phenomenon and has a serious potential for severe impact on our lives, society and economy because our society is becoming information society where communication takes place in cyber space (Olusola et al., 2013:19). It is therefore especially important that the management of FNB do their best to combat and prevent cyber-crimes (Veter et al., 2012: 6). 54 4.6.2 Information Technology through internet has led to card skimming Figure 4.17: Card Skimming 8% 6% 19% Strngly Agree Agree 16% Neutral Disagree 51% Strongly Disagree Figure 4.17 above indicates that 19% of the respondents strongly agree to that information technology leads to an increase in card skimming. From the above figure, it further shows that 51% of the respondents agree, while 16% remain neutral. Only 6% and 8% of the respondents disagree and strongly disagree respectively. This is a course of concern for the management of FNB to keep their customers safe from criminals. Standard Bank Swaziland Managing Director informed the public that card skimming was rife towards the end of the year, giving an example of one customer lost an amount of E27,200 to card skimming (Motau, 2014 : 5). For the financial year 2013/14 the Swaziland Royal Police annual report revealed that there were 40 cases of card skimming reported only on the Hhohho Region, where FNB Mbabane lies. Out of these 40 cases, only 3 were successfully prosecuted and arrest was made (Dube, 2014:8), 55 4.6.3 Information Technology has caused ethical controversy in the security of company information and workplace safety Figure 4.18: Ethics 27% 37% Strongly Agree Agree Neutral Disagree Strongly Disagree 37% Figure 4.18 above indicates that 37% of the respondents strongly agree that information technology has caused ethical controversy and 37% agree, while only 26% respondents remain neutral. Information technology has caused ethical controversy in the areas of intellectual property rights, customers and employees’ privacy, security of company information and workplace safety (Marakas et al., 2011:565). Chavan (2013), asserts that confidentiality, integrity, and authentication are very important features of the banking sector and need to be successfully managed over the preinternet times. Communications across websites and thus insecure channels such as internet might not be the best for bank-client relations as trust might partially be lost (Chavan, 2013: 24). 56 4.6.4 Law enforcement with regard to investigating crimes and handling evidence, dealing with offenders, and assisting victims is complex and challenging Figure 4.19: Law enforcement 4% 20% Strongly agree 31% Agree Neutral Disagree Strongly Disagree 45% Figure 4.19 above indicates that 20% of the respondents strongly agree that law enforcement is a complex and challenging phenomenon with the use of information technology. The figure further indicates that, 45% of the respondents agree while 31% remain neutral. Only 4% of the respondents disagree with the statement. Fick (2009:1) on McFee Virtual Criminology Report assets that, “the successes of cyber criminals pose new and difficult challenges for law enforcement. The online engagement of criminals reduces the risk of capture and prosecution and makes the job of law enforcement that much harder. Some sources estimate 5% of cyber criminals are ever caught and convicted (Fick, 2009:1). He further argues that it is difficult for police to follow up transactions in order to gather evidence and national laws differ enough to make prosecution more difficult. Alusola et al. (2013: 24) strongly believes that the following are contributing factors to the challenges of law enforcement and prosecution of cyber criminals: 57 Ø Reliance on terrestrial laws is an untested approach. Most countries still rely on standard terrestrial law to prosecute cybercrimes. Ø Global patchwork of laws creates little certainty. Little consensus exist among countries regarding exactly which crimes need to be legislated against. Across jurisdictions without coordinated efforts by law enforcement officials to combat cybercrime, it will remain complicated. 4.6.5 Retention of Information Technology Personnel is a challenge Figure 4.20: Staff Retention 4% 31% 22% Strongly agree Agree Neutral Disagree Strongly disagree 43% Figure 4.20 above indicates that 31% of the respondents strongly agree that retention of information technology personnel is a challenge and 43% agree. Only 22% remain neutral while 4% disagree. Information technology employees are regarded as a strategic resource (McConnell et al., 2007:1). In McGee’s (2005) interview with companies, Gagne reports that 53% of respondents companies were experiencing a shortage of information technology employees (Mohlala et al., 2012:1). Mohlala et al. (2012) further asserts that the increasing demand for skilled information technology employees has placed organisations under pressure to start devising retention strategies in order to retain the targeted employees (DPRU, 2006 58 :1). One of the contributing factors to leading skills shortage for ICT is organisations that are not willing to invest time and money to train their employees (Mohlala et al., 2012:2). 4.6.6 Bandwidth Problems (if network present) pose a challenge of hacking by criminals Figure 4.21: Bandwidth 2% 6% 23% 22% Strongly agree Agree Neutral Disagree Strongly disagree 47% Figure 4.21 above indicates that 23% strongly agree that bandwidth poses a challenge of system hacking by criminals. 47% of the respondents agree while 22% remain neutral. Only 6% and 2% of the respondents disagree and strongly disagree respectively. There are some banks that have the networks already but they do not have enough bandwidth. When bandwidth is not enough there is usually a traffic jam and customers have challenges of failed transactions while undertaking internet banking which pose the threat of hacking by criminals (Andreesen et al., 2013: 8). This is also a cause of concern for the management of FNB to ensure sufficient bandwidth to avoid chances of systems hacking. 59 Conclusion This chapter presented the analysis of the data collected through the self – administered questionnaires that were distributed to staff. The responses were presented using figures and charts. The results of the study indicated that information technology is indeed a competitive tool in the banking sector. Whilst, some strengths were identified, there is a concern that in most questionnaires a plus minus 25% of respondents are neither agreeing or disagreeing. This shows that there is little team cohesiveness prevalent and must be a cause of concern for the management of FNB to ascertain the reasons for these staff members remaining neutral. The next chapter presents the conclusions, recommendations and scope for further research. 60 CHAPTER FIVE: CONCLUSIONS AND RECOMMENDATIONS 5.1 Introduction This chapter summarises the findings of the study and offers recommendations to the management of FNB and employees. The key to this chapter is the evaluation of the linkages between the literatures reviewed and study findings, in order to offer recommendations. Areas of the future research related to the study is identified and proposed. In this chapter conclusions and recommendations are linked to the research objectives. 5.2 The Objectives of the Study · To assess the current information technology process in place at FNB. · To assess the impact of information technology on the attainment of competitive advantage at FNB. · To provide recommendations to the management at FNB and the relevant stakeholders. 5.3 Findings from the Study The findings from this study are discussed under two headings; key findings from literature review and findings from primary research. 5.3.1 Key Findings from the Literature Review The use of internet banking has brought many benefits amongst which include: Ø No barrier limitations, it is convenient to use; it saves time and makes it possible to access the use of innovative product or service at a low transaction fees (Chavan, 2013 : 21). 61 Ø Information Technology has transformed traditional practices in banking in that it encourages queue management which one of the important dimensions of e-banking service quality (Khan et al., 2009: 33). Ø Utilising internet applications is the only way to stay connected to the customers at any time and any place (Shingal et al.,2008 :102). Ø Information technology results in high performance in banking industry through faster delivery of information from the customer and service provider (Oluwagbemi et al., 2011: 63). Ø Development in information technology has caused a revolution in information distribution (Kotler et al., 2006:139). Ø Information technology has given rise to new innovations in product designing and their delivery in the banking and finance industry (Agrawal et al., 2012:90). Ø Information technology is a competitive tool which has made the banking industry highly competitive today (Nyasatu, 2012:6). Ø Business and Information Technology has been proven to assist financial institutions to reach geographically distant and diversified markets (Ozuru et al., 2010:2). Ø It is proven that the use of internet makes it possible to access the use of innovative products and services at low costs (Chavan, 2013:22). Ø ATMs have become a major revelation for customers since it offers facility to avoid long queues in banks (Chavan, 2013:22). Ø Vast growth of information technology fast growing has increased interest in computer crimes, ethics and privacy challenges. Ø It is proven that through the increased use of information technology, there is an increase in cybercrimes scandals (Fick, 2009:4). Ø It is proven that cyberspace criminals skills are ahead of information security measures and makes organisations vulnerable (Charney, 2009: 20). 62 Ø It is proven that there are challenges in relation to laws (Fick, 2009:1). 5.3.2 Key Findings from the Primary Research Ø A collective 80% age group is less than 40 years which is a cause of concern as labour force around this age group is highly mobile and FNB may face a challenge of staff turnover. This is an indication that the bank has to develop a staff retention strategy. Ø Research shows that 57% of the respondents are male and 43% of the respondents are female. Ø A collective 84% of the FNB staff members’ possess a tertiary level qualification which affords the institution ambitions, motivated and self-confident staff members. Ø Research indicates collectively, 61% of respondents disagree that customers prefer using over the counter services than ATMs. A collective 74% of respondents agreed that ATM’s are the most favoured facility. Ø A collective 65% of respondents agree that a well-developed information technology together with immense training contributes to competitive advantage. Training is very important because it assists employees to conceptualise. Ø A collective 65% of the respondents agree that information technology has given rise to cybercrime, which is a cause of concern to FNB as it hinders competitive advantage. Ø A collective 70% of the respondents agree that information technology leads to an increase in card skimming, which is a cause of concern to the management of FNB to be embraced with the pace of the criminals. Ø A collective of 73% of the respondents agree that information technology has caused ethical controversy in the security of company information and workplace safety. Ø A collective 65% of the respondents agree that with information technology has caused challenges for law enforcement. This is also 63 agreed by Fick (2009), on McFee Virtual Criminology Report when he says “the success of cyber criminals pose new and difficult challenges for law enforcement”. Ø A collective 74% of the respondents agree that retention of Information Technology personnel is a challenge. Ø One of the contributing factors to Information Technology skills shortage is that organisations are not willing to invest time and money to train their employees (Mohlala et al., 2012: 2). Ø A collective of 69% of the respondents agree that bandwidth poses a challenge of systems hacking by criminals. When bandwidth is not enough there is usually a traffic jam and customers have challenges of failed transactions when doing internet banking which pose the threat of hacking by criminals (Andreesen et al., 2013: 8). 5.4 Areas for Future Research The direction for future research in this area of study is wide. Many other institutions in the financial sector rely heavily on information technology to carry out their everyday functions. Therefore, this study can be carried out with other commercial banks based in Mbabane, including Standard Bank Swaziland, Nedbank Swaziland, Swazi bank as well as Swaziland Building Society. 5.5 Conclusion to the study This chapter highlights the overall conclusions obtained from the study and highlights the research questions and objectives. The primary findings assisted in answering the questions that were formulated for this study. The study concluded that despite challenges, it is proven that IT is a tool that benefits banks towards attaining competitive advantage. It is evident from both the primary and secondary findings that information technology impacts significantly on survival of organisations. Information technology enables the interaction between customers, bank and products of FNB. 64 The overall disagreements propel an urgent need for management to do more research and development in order to map out new and effective strategies to stay at a competitive edge. 5.6 Recommendations The recommendations include the following: 5.6.1 Staff Retention It is important for the management to maintain the right balance between young and older employees. The finding revealed that only 20% of staff are in the group of 41 – 60. From this age group staff are closer to their retirement and will take with them a strong work ethic, absolute dependability and stability, as well as continuity, vast knowledge, expertise, experience , and invaluable ability as couches to upcoming talent (Mohlala, et al., 2012: 3). Therefore, it is important for the management to focus on the future growth and deployment of the 21 – 40 age groups in order to avoid major disruptions to the current teams. Findings indicate that in most organisations there is an inability to retain the type of employees with skills that are essential to the organisation (DPRU, 2006: 1). FNB should develop a retention strategy as it faces a difficulty in the information technology environment to retain (younger) staff. Younger staff want a challenge, they want to work on new technology and if given that opportunity, the company again must bring in newer person to train and after few years they want to leave (Mohlala et al., 2012: 8). 5.6.2 Coaching of young staff Newly qualified younger graduates bring to teams a ‘cutting edge’ in terms of technology and other “current” practices, which enhances team 65 effectiveness, but need the guidance of the older group. The younger staff members still needs coaching from the group who have vast experience. Older staff can coach using the GROW model that was developed by Graham Alexander and John Whitmore (2008). The name is an acronym, with each letter standing for a different phase of the model. GROW stands for: G – Goal R – Reality O – Options W – Way Forward · Goal refers to the object or target for the team member. This is not just a list of goals given but a mutually agreed upon vision for the team member. · Reality refers to taking an inventory of where the team member is in relation to the goals that have been identified. This helps ascertain what is needed to complete the journey. · Options refer to the various ways that there are to move from vision to reality. The team member can assist by discussing what options are available and which ones are most effective. · Way forward refers to when the coach and team member come up with an action plan for exactly how the chosen options will be implemented. During this process agreement will have to be reached on specific timelines and deadlines, details deliverables and expectations, resources that will be provided or made available, what level of help the coach will provide and when and how communication will be provided. 5.6.3 Addressing the Gender Imbalance The staff compliment comprises of 43% females. The 57% male compliment was hired during the era when gender parity was not in existence. The 66 gender equity plan has to be gradual implemented as the long serving male staff exit the bank on retirement. The researcher recommends selective hiring during natural attrition. 5.6.4 Secure Networked Information. It is recommended that the management of FNB should strive to ensure secure network and information. Laws to enforce property rights work only when property owners take reasonable steps to protect their property at first place (Olusola et al., 2013:24). Olusola et al. (2013) further assets that even where laws are adequate, firm depending on the network must make their own information and systems secure. FNB management should work cooperatively to strengthen legal frame works for cyber security. National government remain the dominant authority for regulating criminal behaviour in most places in the world (Olusola et al., 2013:24). The government should ensure that the laws are composed in a technologically neutral manner that would not exclude the prosecution of cyber criminals. FNB should ensure that much of population as possible is banked for financial inclusion, as currently the economy still have millions of savers and investors who still do not use a bank (Agrawal et al., 2012:95). This would also address the financials inclusion problems of using electronic products and enhance launching of more products that will ensure that wherever one is in Swaziland will be able to access FNB products without necessity travelling hundreds of kilometres to their nearest branches (Shongwe, 2014: 21). 5.6.5 Develop Regulatory Compliance Plan Ø It is important that the management of FNB design and execute a plan to move towards heightened standards. The plan must articulate responsibilities accountabilities, goals, and milestone with 67 specific dates, potential results and steps to deal with contingencies. The plan must be developed in consultation with line – of business executive, risk manager and assurance function and there must be consensus for the defined plan from the board and executive management on down. Ø FNB should embank on both public and private police partnership in the market place and the emergence of civil society on the internet combined with public awareness. In particular, government and private sector, with information technology companies in a leading role should work together to ensure the development of strong criminal laws and capability to enforce them, to share information that will enhance security and also support the security education and training of citizens (Charney, 2009: 20). 5.6.6 Reward Recognition The annual recognition is imperative because it recognises the innovative spirit that they put in place in order to ensure customers are served with consistent superiority (Mohlala et al., 2012: 9). 5.7 Conclusion The primary and secondary findings assisted in answering the research questions that were formulated to the study. The study aimed at evaluating the impact of information technology towards attaining competitive advantage in the banking sector in Swaziland. It is clear from both primary and secondary findings that regardless of the challenges that come with it, information technology impacts advantage in the financial sector. positively in attaining competitive The growth of high speed networks, coupled with the reducing cost of computing power, is making possible applications undreamed of in the past. It is now fundamentally changing 68 the delivery systems FNB use to interact with their customers. The study also revealed that all over the world, banks are still struggling to find a technological solution to meet the challenges of a rapidly-changing environment. FNB with the ability to invest and integrate information technology has become competitive. 69 Bibliography Abah, J. (2011). The Impact of Information Technology in Nigeria’s Banking Industry. Journal of Computer Science and Engineering, 7 (2), 63 -79. Agrawal, S. and Jain, A. (2012). Technological Advancement in Banking Sector in Indian: Challenges Ahead. 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Zoogah, D.B, Vora, D. Richard, O and Peng, M. W. (2008). Strategic Alliance Team Diversity, Coordination, and Effectiveness. University Of Texas) Unpublished. 80 ANNEXURE A : COVERING LETTER c/o Regent Business School Khangezile P. Mkhonta P. O. Box 296 Lobamba The Manager First National Bank Mbabane Swaziland Dear Sir MBA – DISSERTATION I am currently studying for a Master’s Degree in Business Administration at Regent Business School in Durban. My area of research is in the banking sector with particular focus on the impact/contribution of information technology towards attaining competitive advantage. I have chosen FNB as a bank with a mark to do the research on. I therefore request for your permission to do my investigation. All information gathered will be treated with confidentiality. Findings and recommendations will be forwarded to FNB by means of a copy of the dissertation. Thanking you in advance. Yours faithfully Khangezile P. Mkhonta MBA 81 ANNEXURE B : QUESTIONNAIRE Section A – Biographical Data This section aims to get your biographical information. Mark an “X” in the relevant box. 1. Gender : [ 2. Your age group ] Male [ ] 20 -30 [ ] Female [ ] 31 – 40 [ ] 41 -50 [ ] 51 -60 [ ] Over 60 Section B – Demographics This section aims to get your demographic information. Mark an “X” in the relevant box. 3. Level of position occupied [ ] Clerical [ ] Supervisory level [ ] Middle Management [ 4. ] Senior Management Others (Please specify): ___________________ Highest Level of Education [ [ 5. ] Matric ] Post Graduate [ ] Diploma [ ] Other (Please specify): ___________________ [ ] Degree Place of work (Branch) [ ] Head Office [ ] Corporate Place [ ] Swazi Plaza [ ] The Mall [ ] Other (Please specify): ___________________ Section C – Components of Information Technology towards achieving competitive advantage. This section aims to assess the components of Information Technology that are contributing towards competitive advantage. Kindly indicate your level of agreement or disagreement by marking an “X” in the relevant box. Questions Strongly Disagree 6. Information technology is a competitive tool in the financial sector 7. Business and important role institution. 8. Well-developed Information Technology infrastructure and Software impact positively to competitive advantage of the organization. Disagree Neutral Agree Information Technology play an in the success of financial the 82 Strongly Agree 9. Human Capacity contributes immensely to competitive advantage in the banking sector. 10. Internet has impacted positively on the success of the banking industry towards attaining competitive advantage. 11. ATMs have become the major revelation for customers. 12. Cellphone banking is widely accepted by customers. 13. Electronic mail contributes to competitive advantage. 14. More customers prefer using over the counter services than ATMs and Internet Banking. 15. Expenditure on development of Information Technology and immense training contribute to attaining competitive advantage Section D – IT Challenges This section aims to assess the components of Information Technology that are constrains towards competitive advantage. Kindly indicate your level of agreement or disagreement by marking an “X” in the relevant box. Questions Strongly disagree disagree neutral agree 16. Information Technology through internet has given rise to cybercrime 17. Information Technology through internet has led to card skimming. 18. Information technology has caused ethical controversy in the security of company information and workplace safety. 19. Law enforcement with regard to investigating crimes and handling evidence, dealing with offenders, and assisting victims is complex and challenging. 20. Retention of Information Technology Personnel is a challenge. 21. Bandwidth Problems (if network present) pose a challenge of hacking by criminals. 83 Strongly agree ANNEXURE : C – DATA OF RESPONDENTS 1. Age Frequency Percent Valid Percent Cumulative Percent Valid 0-21 2 4.1 4.1 4.1 22-30 13 26.5 26.5 30.6 31-40 24 49.0 49.0 79.6 41-50 3 6.1 6.1 85.7 7 14.3 14.3 100.0 49 100.0 100.0 51 and above Total 2. Gender Frequency Percent Valid Percent Cumulative Percent Valid Male 28 57.1 57.1 57.1 Female 21 42.9 42.9 100.0 Total 49 100.0 100.0 3. Level of Position occupied Frequency Percent Valid Percent Cumulative Percent Valid 4. Supervisory 19 38.8 38.8 38.8 Middle Management 24 49.0 49.0 87.8 Senior Management 5 10.2 10.2 98.0 Other 1 2.0 2.0 100.0 Total 49 100.0 100.0 Highest Level of Education Frequency Percent Valid Percent Cumulative Percent Matric 8 16.3 16.3 16.3 Diploma 20 40.8 40.8 57.1 Degree 14 28.6 28.6 85.7 Post Graduate 6 12.2 12.2 98.0 Other 1 2.0 2.0 100.0 Total 49 100.0 100.0 Valid 84 5. Branch Based in Frequency Percent Valid Percent Cumulative Percent Head Office 16 32.7 32.7 32.7 Corporate place 18 36.7 36.7 69.4 Swazi Plaza 12 24.5 24.5 93.9 The Mall 2 4.1 4.1 98.0 Other 1 2.0 2.0 100.0 Total 49 100.0 100.0 Valid 6. Information technology is a competitive tool in the financial sector Frequency Percent Valid Percent Cumulative Percent Valid 7. Strongly agree 18 36.7 36.7 36.7 agree 19 38.8 38.8 75.5 neutral 10 20.4 20.4 95.9 disagree 2 4.1 4.1 100.0 Total 49 100.0 100.0 Business and Information Technology plays an important role in the success of Financial institutions. Frequency Percent Valid Percent Cumulative Percent Strongly agree 21 42.9 42.9 42.9 agree 19 38.8 38.8 81.6 neutral 9 18.4 18.4 100.0 Total 49 100.0 100.0 Valid 8. Well-developed Information Technology infrastructure and Software impacts positively to competitive advantage. Frequency Percent Valid Percent Cumulative Percent Strongly agree 12 24.5 24.5 24.5 agree 29 59.2 59.2 83.7 neutral 6 12.2 12.2 95.9 disagree 1 2.0 2.0 98.0 Strongly disagree 1 2.0 2.0 100.0 Total 49 100.0 100.0 Valid 85 9. Human Capacity contributes immensely to competitive advantage in the banking sector Frequency Percent Valid Percent Cumulative Percent Valid Strongly agree 10 20.4 20.4 20.4 agree 25 51.0 51.0 71.4 neutral 12 24.5 24.5 95.9 disagree 2 4.1 4.1 100.0 Total 49 100.0 100.0 10. Internet has impacted positively on the success of the banking industry towards attaining competitive advantage Frequency Percent Valid Percent Cumulative Percent Strongly agree 16 32.7 32.7 32.7 agree 19 38.8 38.8 71.4 neutral 10 20.4 20.4 91.8 disagree 2 4.1 4.1 95.9 Strongly disagree 2 4.1 4.1 100.0 Total 49 100.0 100.0 Valid 11. ATMs have become the major revelation for customers Frequency Percent Valid Percent Cumulative Percent Strongly agree 12 24.5 24.5 24.5 agree 24 49.0 49.0 73.5 neutral 9 18.4 18.4 91.8 disagree 3 6.1 6.1 98.0 Strongly disagree 1 2.0 2.0 100.0 Total 49 100.0 100.0 Valid 86 12. Cellphone banking is widely accepted by customers Frequency Percent Valid Percent Cumulative Percent Strongly agree 6 12.2 12.2 12.2 agree 15 30.6 30.6 42.9 neutral 13 26.5 26.5 69.4 disagree 10 20.4 20.4 89.8 Strongly disagree 5 10.2 10.2 100.0 Total 49 100.0 100.0 Valid 13. Electronic mail contributes to competitive advantage Frequency Percent Valid Percent Cumulative Percent Valid Strongly agree 7 14.3 14.3 14.3 agree 21 42.9 42.9 57.1 neutral 16 32.7 32.7 89.8 disagree 5 10.2 10.2 100.0 Total 49 100.0 100.0 14. More customers prefer using over the counter services Frequency Percent Valid Percent Cumulative Percent Strongly agree 6 12.2 12.2 12.2 agree 13 26.5 26.5 38.8 neutral 8 16.3 16.3 55.1 disagree 10 20.4 20.4 75.5 Strongly disagree 12 24.5 24.5 100.0 Total 49 100.0 100.0 Valid 15. Expenditure in information technology development and immense training contributes in competitive advantage Frequency Percent Valid Percent Cumulative Percent Strongly agree 8 16.3 16.3 16.3 agree 24 49.0 49.0 65.3 neutral 9 18.4 18.4 83.7 disagree 4 8.2 8.2 91.8 Strongly disagree 4 8.2 8.2 100.0 Total 49 100.0 100.0 Valid 87 16. Information technology has given rise to cybercrime Frequency Percent Valid Percent Cumulative Percent Valid Strongly agree 11 22.4 22.4 22.4 agree 21 42.9 42.9 65.3 neutral 13 26.5 26.5 91.8 disagree 4 8.2 8.2 100.0 Total 49 100.0 100.0 17. Information Technology leads to increase in card skimming Frequency Percent Valid Percent Cumulative Percent Strongly agree 9 18.4 18.4 18.4 agree 25 51.0 51.0 69.4 neutral 8 16.3 16.3 85.7 disagree 3 6.1 6.1 91.8 Strongly disagree 4 8.2 8.2 100.0 Total 49 100.0 100.0 Valid 18. Information technology has caused ethical controversy Frequency Percent Valid Percent Cumulative Percent Strongly agree 18 36.7 36.7 36.7 agree 18 36.7 36.7 73.5 neutral 13 26.5 26.5 100.0 Total 49 100.0 100.0 Valid 19. Law enforcement is complex and challenging with the use of Information Technology Frequency Percent Valid Percent Cumulative Percent Valid Strongly agree 10 20.4 20.4 20.4 agree 22 44.9 44.9 65.3 neutral 15 30.6 30.6 95.9 disagree 2 4.1 4.1 100.0 Total 49 100.0 100.0 20. Retention of Information Technology Personnel is a challenge 88 Frequency Percent Valid Percent Cumulative Percent Valid Strongly agree 15 30.6 30.6 30.6 agree 21 42.9 42.9 73.5 neutral 11 22.4 22.4 95.9 disagree 2 4.1 4.1 100.0 Total 49 100.0 100.0 21. Bandwidth if network available) poses a challenge of system hacking by criminals Frequency Percent Valid Percent Cumulative Percent Strongly agree 11 22.4 22.4 22.4 agree 23 46.9 46.9 69.4 neutral 11 22.4 22.4 91.8 disagree 3 6.1 6.1 98.0 Strongly disagree 1 2.0 2.0 100.0 Total 49 100.0 100.0 Valid 89 ANNEXURE D - AUTHORITY LETTER First National Bank P. O. Box 261 Eveni, Mbabane Dear Ms Mkhonta Regent Business School First National Bank is hereby granting you permission to conduct research in its organisation towards your Master of Business Administration (MBA) qualification at Regent Business School in the following research area. Contribution of information technology towards competitive advantage in the banking sector: Case Study of First National Bank, Mbabane Swaziland. I trust all information will be treated with confidentiality. Eve Dunn 90 ANNEXURE E : ETHICAL FORM ETHICAL CLEARANCE FORM Section 1 : Personal Details 1.1 Full Name and Surname KHANGEZILE P. MKHONTA 1.2 Student Number MBA1120257F 1.3 Contact Details: · Telephone Number +268 25177035 · Cell Number +268 7802 4119 · Email: Khangezilem@centralbank.org.sz Supervisor’s Details: · Name: Ms Xolelwa Linganiso · Telephone Number +27313044626 · Email research3@regent.ac.za 91