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How Financial Firms Decide on Technology

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Author Info
Lorin M. Hitt
Frances X. Frei
Patrick T. Harker

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Abstract

The financial services industry is the major investor in information technology in the U.S. economy; the typical bank spends as much as 15% of non-interest expenses on IT. A persistent finding of research into the performance of financial institutions is that performance and efficiency vary widely across institutions. Nowhere is this variability more visible than in the outcome of the IT investment decisions in these institutions. This paper presents the results of an empirical investigation of IT investment decision processes in the banking industry. The purpose of this investigation is to uncover what, if anything, can be learned from the IT investment practices of banks that would help in understanding the cause of this variability in performance along with pointing toward management practices that lead to better investment decisions. Using PC banking and the development of corporate Internet sites as the case studies for this investigation, the paper reports on detailed field-based surveys of investment practices in several leading institutions.

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File URL: http://fic.wharton.upenn.edu/fic/papers/98/9834.pdf
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Publisher Info
Paper provided by Wharton School Center for Financial Institutions, University of Pennsylvania in its series Center for Financial Institutions Working Papers with number 98-34.

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Date of creation: Nov 1998
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Handle: RePEc:wop:pennin:98-34

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  1. Panapoulou, Maria, 2002. "Technological and Structural Change in the European Banking Industry," EIFC - Technology and Finance Working Papers 13, United Nations University, Institute for New Technologies. [Downloadable!]
  2. Anthony M Santomero & David L. Eckles, 2000. "The Determinants Of Success In the New Financial Services Environment: Now That Firms Can Do Everything, What Should They Do And Why Should Regulators Care?," Center for Financial Institutions Working Papers 00-32, Wharton School Center for Financial Institutions, University of Pennsylvania. [Downloadable!]
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This page was last updated on 2009-12-6.


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