THE IMPACT OF INFORMATION TECHNOLOGY ON BANKING SALES PERFORMANCE CASE STUDY IN TECHCOMBANK

NATIONAL ECONOMICS UNIVERSITY
NEU BUSINESS SCHOOL
----------------------------------------

NGUYEN VAN HAI

THE IMPACT OF INFORMATION TECHNOLOGY
ON BANKING SALES PERFORMANCE
CASE STUDY IN TECHCOMBANK

MASTER OF BUSINESS ADMINISTRATION THESIS

HÀ NỘI-2020


NATIONAL ECONOMICS UNIVERSITY
NEU BUSINESS SCHOOL
----------------------------------------

NGUYEN VAN HAI

THE IMPACT OF INFORMATION TECHNOLOGY
ON BANKING SALES PERFORMANCE
CASE STUDY IN TECHCOMBANK

MASTER OF BUSINESS ADMINISTRATION THESIS

SUPERVISOR: Assoc.Prof. Dr. VU DINH HIEN

HÀ NỘI-2020

ACKNOWLEDGEMENT

First, I would like to send thanks to my thesis supervisors, Associate
Professor Doctor Vu Dinh Hien, who instructed and taught me a lot, gave me his
valuable time and preciuos comments to contribute much to my thesis.
Second, I send my sincere thanks to managers and colleagues at
Techcombank Vietnam for catering me in collecting full and accurate data in
research process.
Finally, I also would like to thank my family and friends for their support in
finishing this thesis.
Thank you very much!
October 2020

Nguyen Van Hai


TABLE OF CONTENTS


ABBREVIATION

CRM:

Customer relationship management

EFA:

Exploration Factor Analysis

FSIs:

Financial institutions

IT:

Information Technology

NFI:

Net fee income

NII:

Net interest income

ROA:

Return on Asset

ROE:

Return on Equity

Techombank (TCB): Viet Nam Technological and Commercial Joint stock
Bank
TOI: Total operating income


LIST OF TABLES

Table 2.1 Aspect of Performance.............................................................................28
Table 3.1 TCB business results from 2015 to 2019.................................................46
Table 3.2 Response Rate..........................................................................................47
Table 3.3. Time works with current bank.................................................................49
Table 3.4. Adoption of IT in the Improvement of Banking Sales Performance.......52
Table 3.5. Importance of Adoption of IT Innovation in the Improvement of Banking
Sales Perfomance...................................................................................52
Table 3.6 Extent to Which IT Adoption has Improved the Sales Performance of the
Bank.......................................................................................................54
Table 3.7 Rating the Adoption of Various Technological Innovations.....................54
Table 3.8 Cronbach alpha of IT (Time 1).................................................................56
Table 3.9 Cronbatch’s Alpha Banking Sales Performance (Time 2)........................56
Table 3.10 EFA........................................................................................................57
Table 3.11 Regression Analysis...............................................................................58
Table 3.12. Coefficient Results................................................................................59


LIST OF FIGURES
Figure 1.1: Research process...................................................................................12
Figure 2.1. TOI Structure.........................................................................................26
Figure 2.2. NFI Structure.........................................................................................27
Figure 2.3: Model of Organization..........................................................................31
Figure 2.4: The theory of Technology Acceptance Model.......................................33
Figure 2.5: Research Model.....................................................................................34
Figure 3.1: Oganizational structure of TCB.............................................................39
Figure 3.2 Working Experience in the Banking Industry.........................................48
Figure 3.3 Position Held in the Organization..........................................................50
Figure 3.4 Level Education.....................................................................................51

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EXECUTIVE SUMMARY
The increased demand for information technology (IT) in banking sector
became imminent and unavoidable in the world at large and Vietnam in particular.
Invariably, the future lies in the IT driven banking systems and services. Banks have
embarked on deployment of IT based banking products and services such as
automated teller machine (ATM), internet banking, mobile banking solutions, point
of sale terminals… TCB has to recognize the current impact of information
technology on Sales Performance so that the author decided to do my final research
named “The impact of information technology on Banking Sales performance. Case
study in Techcombank”
The aims of this study were (1) To review theoretical backgrounds of Information
Technology on Banking sales performance; (2) To analyze the impact of Information
Technology adoption on the Sales performance of TCB; and (3) To give some solutions
and recommendations based on the findings emanated from the study.
In order to get the research objectives above, the author implemented the
study based on the Model of Organization (Leavitt, 1965) and Technology
Acceptance Model (TAM) (Davis, 1989) to develop the survey with 3 independent
variables to measure current information technology components, 1 dependent
variable to measure overall TCB Sales Performance. The research also used both
quantitative methods and qualitative methods to analyze the impact of information
technology to TCB sales performance.
From doing this research, the author found out the adoption of IT had
improved TCB operations, not only increased their market coverage but also
remained competitive in the market. The usage of IT can lead to lower costs, but the
effect on profitability remains inconclusive, owing to the possibility of IT effects
that arise as a result of consistence high demand of skilled work force, issues of
increasing demand to meet customer's expectation for customer service delivery,
trustworthiness of the information system and competition in financial.

9

Through understanding deeply, the impact of information technology on TCB
sales performance, the author proposed to implement following solutions in order to
improve TCB Sales performance: TCB seeking to improve Sales performance
should embrace IT. Some financial innovations decrease risk and volatility
associated with globalizing markets. With greater globalization, firms, investors and
governments are exposed to new risks such as exchange, interest rate and political
risks which IT seek to manage. TCB should proactively monitor customers
preferences with regard to technological innovations such as ATMs and try to
implement these preferences in their features in order to enhance their
functionalities leading to enhanced Sales performance. TCB should Improve the
current the information technology services to help customer get better experience
and more using the information technology products. TCB shoul also invest more in
human resources in order to enhance responsiness factor, should focus on training
staffs as well as constantly improving the ability of serving customers of employees.
The author hopes that this study will be considered and implemented in TCB
to invest move in Information technology in the future to increase its Sale
performance.


10

CHAPTER 1: INTRODUCTION
1.1.

Rationale
Banking can simply express as the business of keeping, lending, exchanging

and issuing money. The Key business priorities of the banking and financial
services industry are Efficiency, Growth and Resilience. The technology helps the
sector to fulfill the requirements of the business priority areas.
Implementation of information technology began in right earnest in the
sector. Starting from back office automation, which was aimed largely at processing
of voluminous data and automation of cheque clearing operations; the technology
moved to the front desk in the form of total branch automation.
At the same time, the development in communication technologies made
technology implementation more widespread and it became cost effective to
network bank branches. Investments in information technology also helped cut
down operational costs drastically.
Technology means application of knowledge or a technical process method
or emerged as powerful tool to reduce operating costs, making it viable for financial
institution to expand into rural and low-income areas. Technology plays an
important role in Financial Services for monitoring and controlling of their services;
currently some of the technology use by financial institutions (FSIs)
These help FSIs to provide efficient, better customer service, greater product
variety, shorter response time, enhanced product quality and better customization of
products and services.
There are about 4 billion unbanked people in the world which is more than
two third of the population of low- and middle-income countries financial


11

institution such as commercial bank is still unable to reach poor population, because
of high cost for building and maintain branch network and developing.
According to Nielsen's Insights 2017 Report, Vietnam thein Vietnam in 2017
was 84%, an increase of 6% from the previous year. More notably, in rural areas,
68% of the population now use smartphones. The above figures show an impressive

trend – the ubiquity of smartphones and tablets. Habits and behaviors of people in
all regions, of all classes and ages are changing. Online services, whether for
shopping, making friends, exchanging information, or dating, are becoming more
popular. The Banking sector is no different. Users expect to be able to access and
use banking services at anytime, anywhere and on any device.
Each bank has its own approach to digital banking, which focuses on the
customer experience or the ability to provide online services. However, these
options can only be successful when delivering the best value to the customer. Right
from the start, Techcombank has focused on technology, believing it to be the best
way to serve customers and promote business development. During 26 years of
operation, Techcombank has continuously strengthened its systems and capacity to
best meet the needs of customers. In recent years, Techcombank’s application of
technology has delivered remarkable progress, creating breakthroughs to improve
operational efficiency and customer satisfaction.
The aim is to identify and understand the changes that IT is causing on the
banking sector, in order to examine in detail how the recent (and foreseeable) advances
in IT are affecting the sector and can affect its future evolution. As IT is having a strong
influence on the evolution of the banking, the study investigates the influence IT has on
the banking sector and the payments system. Therefore, the purpose of this study was
to investigate the relationship between IT and Banking sales performance, and case
study in Viet Nam Technological and Commercial Joint stock Bank (Techcombank)
1.2. Research objectives
-

To review theoretical backgrounds of Information Technology on Banking Sales

-

performance
To analyze the impact of Information Technology adoption on the Sales

performance of TCB.


12

-

To give some solutions and recommendations based on the findings emanated
from the study
1.3.

-

Research questions

What is theoretical framework of information technology applied for the Sales
Performance at Techcombank?

-

How is the impact of Information Technology factors influencing on Techcombank
Sales performance?

-

What are the main factors which affect to Sales performance at Techcombank?

-

What should Techcombank do to improve Sales Performance via Information

Technology?
1.4.
Research methodology
1.4.1. Research process

The research conducts with the following process:
Identify
Select
Build
Cronbach
Questionnaire
A
E
Regression
Analyze
Some
djustscales
solutions
theotical
the
Problem,
current
alpha
scales
analysis
of Information
Framework
to
Technology
of

Objectives
improve
Information
Sales
Technology
Information
Technology
Performance
at Techcombank
at Techcombank
and main
via Information
inluenced factors
Technology

Figure 1.1 Research process
Source: author


13

1.4.2. Data collection

To achieve the research objectives, several data collection methods were
applied in the research, including secondary data collection methods and primary
data collection method.
Secondary data collection
Secondary data was collected in this research from:
-

Textbooks, journals, magazines and newspapers, publish researches, internet, etc.

-

Relevant documents, reports from TCB from 2016 to 2019
Primary data collection
Staffs survey:

− Survey objectives: To evaluate the importance of information technology on TCB

sales performance
− Respondents: Staffs of TCB with positions:

+ IT Manager
+ Financial Manager
+ Business Manager
− Sample size: 200
− Sampling method: Convenience sampling by directly surveying staffs who have

been working at TCB are concerned to introduce their evaluation on the importance
of information technology on TCB Sales Performance.
− Questionnaire design: questionnaire is designed with 2 main parts including survey

content and personal information as Annex attached. In order to make convenience
for staffs who answer the questionnaires, all questions were designed with closed
questions under 5-point-Likert-scale (in which 1 indicating very no extent to 5
indicating very great extent). Respondents who answered the questionnaires only
circle on the suitable levels that reflected truly the situation asked. Among 200
questionnaires sent, there were 170 valid answers, reaching the ratio of 85%.
− Questionnaire distribution: The researcher distributed customers questionnaire

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papers at TCB offices. The researcher helped them to fulfill the questionnaire
papers. Then the researcher got back immediately.
1.4.3. Data analysis

Findings data are systematically linked to the format of self-developed
questionnaire attached in the appendix. Data are collected by using questionnaire
and distributed with link through Email and also hard copies around the area of Ha
Noi. Collected data are analyzed to identify, describe and test the impact of
Information Technology in banking sector via survey TCB’employees. The author
use “Excel” and “Word” software to process the data.
1.5.

Research scope
 Research object: The impact of information technology on TCB Sale

Performance as the research object.
 Research location: the research was implemented in Hanoi. All the

primary data was gathered in Hanoi, Viet Nam.
 Timing for research:
-

Secondary data was collected from the Viet Nam Technological and Commercial
Joint stock Bank in the range from 2016 to 2019

-

Primary data was gathered from the 15th of June, 2020 to 20th of August, 2020.
1.6.

Thesis Structure outline
The thesis includes 4 chapters:
Chapter 1: Introduction
Chapter 2: Theoretical background on IT
Chapter 3: Current Information Technology at TCB
Chapter 4: Some solutions and Recommendations for TCB


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CHAPTER 2: THEORETICAL BACKGROUND ON
INFORMATION TECHNOLOGY
2.1 Information Techonology
2.1.1 Definition of Information Techonology
Information Technology (IT) is the use of any computers, storage,
networking and other physical devices, infrastructure and processes to create,
process, store, secure and exchange all forms of electronic data. Typically, IT is
used in the context of enterprise operations as opposed to personal or entertainment
technologies. The commercial use of IC encompasses both computer technology
and telephony.
•

IT IN BUSINESS

Information technology drives innovation and innovation is the path to
business success. Innovation in business has the same impact that steam had on the

industrial revolution. In fact, it’s hard to imagine any business that has not benefited
from the digital revolution. Even something as hands on as agriculture uses
computers. Farmers use computers for production records, financial planning,
research on technical issues, and procurement.
Nowadays the formula for business success is simple: drive innovation with
information technology. So, the first thing startups in any industry try to figure out
is how to make smart IT recruiting choices. Without a backbone of information
technology, a business is not going to go far.

2.1.2 Significance of information technology (IT) in the banking industry
The revolution in IT has distorted the normal banking culture and created the
avenue for banks to emerge into various markets thereby creating value where
customer needs are sorted into various categories for prompt attention (Aliyu and
Tasmin, 2012). Through this means, the banks are able to sell other products such as


16

insurance and securities together with the banking products they already sell which
are all unique to the particular firm. (Delgado and Nieto, 2004). However, the basic
reason for making use of the internet and other IT tools as delivery channels is
its power to reduce operational expenses by eliminating the cost of running
physical branches. This becomes relevant in the Spanish banking system which
has too many branches across Europe since the banks using the internet and other
IT tools as delivery increase their income drastically than those using normal
distribution channels DeYoung (2005) and Delgado et al (2006) ... Haq (2005) posits
that financial institutions are able to survive by maximizing income through the
reduction of operational costs. The unit cost of using IT tools in banking reduce rapidly
than the cost associated with physical branch deliver as income grows. Thus, Internet
banking has become the only innovation that can substitute physical branches in the

service delivery of banks (DeYoung et al 2007). Birch and Young (1997) posit that
expectations of consumers are about comfort ability, prompt and quality service
delivery and transactional security. The introduction of IT tools in banking has raised
the awareness of customer to the existence of a fast and efficient customer service
delivery.
In Viet Nam, Banking industry is a backbone of Viet Nam financial system
and it is afflicted by many challenging forces. One such force is revolution of
information technology. In today’s era, technology support is very important for the
successful functioning of the banking sector. Without IT and communication, we
cannot think about the success of banking industry, it has enlarged the role of
banking sector in Viet Nam economy. For creating an efficient banking system,
which can respond adequately to the needs of growing economy, technology has a
key role to play. In past 10 years, banks in Viet Nam have invested heavily in the
technology such as Tele banking, mobile banking, internet net banking, ATMs,
credit cards, debit cards, electronic payment systems and data warehousing and data
mining solutions, to bring improvements in quality of customer services and the fast
processing of banking operation. Heavy investments in IT have been made by the


17

banks in the expectation of improvement in their performance. But important in the
performance depends upon, differences in the deployment, use and effectiveness of
IT.
In the development of Viet Nam Economy, Banking sector plays a very
important and crucial role. With the use of technology there had been an increase in
penetration, productivity and efficiency. It has not only increased the cost
effectiveness but also has helped in making small value transactions viable.
Electronic delivery channels, ATMs, variety of cards, web-based banking, and
mobile banking are the names of few outcomes of the process of automation and

computerization in Viet Nam banking sector.

2.1.3 Challenges of integrating IT in banking operations
Information Technologies has proved to be a valuable tool to business for
that matter banking. Notwithstanding, implementing IT has not been without
challenges. The following are some reviewed papers in relation to the challenge’s
banks encounter with the integration of IT. Related literatures on the challenges of
integrating IT in banking operations were reviewed extensively in this particular
section. Kevin et al (2013) investigated into the impact and Challenges of
Information Technology Adoption in the Tanzanian Banking Sector. Descriptive
research design was employed as it facilitated collection of information from
various categories of bank managers i.e. Customer relations manager who informed
the study on how customers use technology to relate with the bank, Cash manager
who informed the study on how cash flows using technology and the IT managers
who informed the study on technical issues and challenges and allow them to state
their perceptions on impact and challenges on IT adoption in the banking sector.
Their research instruments captured under the methodology was categorized
into two sections; that is the first part comprising the demographic
characteristics/profile and the second part exploring positive impacts of IT adoption


18

in banking sector, bankers and banker’s opinions on the need, what encouraged
them to adopt IT and section two which consisted of 8 questions on challenge’s
facing IT adoption. The main data collection they adopted was questionnaire. From
the empirical findings, they discovered that majority of the respondents agreed that
IT has a major impact in banking. Other findings included; information
technologies like mobile banking products, internet banking products help
customers and bankers have remote access of banking solutions; IT related internet

banking products like digital financial services saves time in making transactions
and can be accessed from any anywhere at any time; IT has a positive impact where
by it enables ;wider networking and links banks globally therefore enhancing smart
banking solutions and services to the customers and also enabling wider
networking, global links of banks. They therefore outlined a number of challenges
in their study in including; slowing down of IT systems and equipment’s, network
communication errors; ignorance by majority of the customers about IT usage
especially online services and they don’t own IT gadgets which can enable them
access online services;
Sonja (2010) investigated the effects of computerization on savings and
credit cooperatives in Uganda. They found out that, majority of the respondents
agreed that information technology has really promoted microfinance sustainability,
reaching the poor people and Management information systems. However, one of
the challenging aspects of the usage of IT revealed as lack of human resource
capacity in the banks in Uganda to man the administration of the computing
services. They therefore suggested that more training should be required to ensure
human resource capacity.
Information technology has become the engine block of every banking
institution worldwide and Viet Nam banking institutions are not exempted. They
adopted the historical and survey research methods. Data were collected from both
primary and secondary sources using chi-square and regression analysis were used in


19

the aspect of formulated Hypothesis testing. They discovered that, banking system is
not in line with global trends and that the application and usage of information
technology in the banking system is necessary for efficient service delivery. They also
realized that, the usage of electronic banking contributes to significantly
revolutionizing service delivery to improve customer satisfaction through the various

electronic fund transfer and payment services such as the automated teller machine
(ATM).
The study recommends that, TCB and other financial institutions should
embark upon training program for all operational staff of all banks and public
awareness should be instituted to improve the knowledge of information technology
and for performance adequacy to support the much-needed efficiency and
operational effectiveness and also to control the regular system failure that
customers face. They used both qualitative and quantitative approaches in gathering
the relevant information for the study. In order to address the challenges faced by
the TCB based on the adoption of IT, a survey was conducted on some of the staff
of the banks. A cross sectional comparative analysis approach was adopted through
sampling a cross section of workers in TCB.
2.2

Banking Sales Performance
Profitability has been widely examined as a performance measure of the

banking sector in developed countries (Sufian & Habibullah, 2010). Profitability
ratios are financial metrics used by analysts and investors to measure and evaluate
the ability of a company to generate income (profit) relative to revenue, balance
sheet assets, operating costs, and shareholders’ equity during a specific period of
time. They show how well a company utilizes its assets to produce profit and value
to shareholders. A higher ratio or value is commonly sought-after by most
companies, as this usually means the business is performing well by generating
revenues, profits, and cash flow. The ratios are most useful when they are analyzed


20

in comparison to similar companies or compared to previous periods.

The widely used indicators to assess commercial banks performance are
return on total assets (ROA) and return on total equity (ROE).
ROA is the ratio between the profit after tax to total/average assets and is the
profitability indicator that determines the efficient utilization of any bank's assets
and revenue generation proficiency from the assets of any enterprise. The higher the
ROA ratio, the better bank profits (Rasiah, 2010).
ROE is expressed as the ratio of profit after tax to total/average equity. This
ratio is used as a profitability indicator that determines the ability of a bank to use
the money invested by shareholders to make a profit.

2.3 IT and Banking sales performance
Worldwide, in the last few years, a massive investment has been done in the
banking sector and its impact on performance is still a paradox. Numerous
studies, using alternative methodologies, have been done on different country
banking systems. Following section is a synoptic view of some representative
banking sector related studies.
•

Positive relationship in profitability and IT
A lot of studies have found positive impact of IT on the performance of
banking sector. Shaukat (2009) examined the impact of IT investments on
profitability and employee productivity in Pakistani banking sector over a period of
1994-2005. They found that IT has a positive impact on performance of the banking
sector. Parsons, Gotlieb and Denny (1993) reached at the same conclusion after
studying the impact of IT on banking productivity in Canadian banking industry.
Using data from 1974-1988, a trans-log cost model has been estimated. The
research found a 17-23 percent increase in productivity with the use of IT.
Cooke (1998) studied some new and fast-growing financial innovations
linked to IT investment, e.g., assets securitization and derivatives in US banking

21

sector.

The

study found that IT has enabled the banks to offer new products, expand into
nontraditional areas, operate more efficiently and minimize risks. Deyoung, R.
(2006), analyzed the impact of investment in information technology (IT) systems
on bank’s profitability in UK. Using panel data, the study supported the view that
IT has a positive impact on bank’s profitability through several factors such as
reducing the labour costs and transactions costs. Claudia et al. (2002), empirically
examined Italian banks based on univariate and multivariate regression models and
found a significant relationship between offering of internet banking activities and
bank’s profitability.
Eyadat and Kozak (2005) investigated the impact of IT on the profit and cost
efficiencies in U.S. banking sector during 1992-2003. They found a positive and
significant correlation between the levels of implemented IT and both, profitability
and cost savings. Hung Viet Nguyen (2005) studied Vietnamese commercial
banks in terms of their efficiency change, productivity growth and technological
change during the period 2001-03. The Study used Data Envelopment Analysis
(DEA) and Malmquist Index with four inputs (labour, capital, technology and
deposits) and two outputs (interest income and non interest income). It shows
that total factor productivity increased by 5.7 percent in 2003 relative to 2001.
Aghdassi, M. (2008) analyzed the strategic value of e-banking for Iranian banks
and revealed that bank manager’s performance through e-banking is quite
positive and effective. They also concluded that information technology stock
contributes to value added growth significantly and use of information network
shows positive impacts on TFP.

Rahman, I.U. (2007) analyzed the financial statements for 26 banks from
1991
through 2001. They used ROA, ROE and net profit as performance variables,
and computer budget ratio and capital budget ratio as the information technology
investment variables. The results revealed the strongest relationship between


22

computer budget ratio and ROE/ROA. Similarly, Malhotra and Singh (2006), M.
Chandrasekhar (2010) analyzed the implications of internet banking for the
Indian banking industry for the period 1998-2005 and found that internet banks
are larger banks and have better operating efficiency and profitability as
compared to non-internet banks.
Agboola (2007) used Likert-type ratings to measure and analyze the degree
of utilization of identified technologies and the variations in their adoption rate in
Nigerian banks. The study revealed that the adoption of IT in banks has improved
customer services, facilitated accurate records, provided home and office banking
services and enhanced faster services.


23

Illyas-Ur Rahman (2007) examined the role of information technology in
banks

and

studied

the

perception

of

bank

employees

towards

the

implementation of information technology. The study considered different
information technology variables like net banking, credit cards, mobile
banking, electronic funds transfer, phone banking, card to card funds transfer.
The study found a positive relation between implementation of information
technology and delivery of services.
Ahmad Mashnour (2009) investigated the way in which information
technology investment created value in the Jordanian banks. The study measured
some variables which determine financial information system performance i.e.
(a) IT integrated in IS; (b) software quality; (c) investment in training; (d)
customer services; (e) productivity; (f) user satisfaction; and (g) cost benefit
analysis. The study concluded that information system provides a competitive
advantage to the banking industry and the effectiveness of information systems
has a positive impact on Jordan banks.
Ombati and Magutu (2010), analyzed the relationship between technology
and service quality in the banking industry in Kenya. The research is a crosssectional survey and the respondents of the study are customers of banks using ebanking services (Internet banking, mobile banking and ATMs). The findings
revealed

that

e

banking has improved the service quality of banks. Madume Stella (2010)
analysed the impact of information and communication technology on the
productivity of the Nigerian banking sector using CAMEL and the transcendental
logarithmic production function also called Translog. The study found that bank
output such as loans and other assets increase significantly due to increase in
expenditure on information and communication technologies.
Leckson and Leckey (2011) ascertained and documented the extent to which
investment in information technology may affect profitability in Ghana banking
sector. The study used an enhanced Balanced Scored Card (BSC) approach


24

proposed by Kaplan and Norton and used the extensive panel data set of 15 banks
over

a

10

year period (1998-2007). The study found that higher IT level banks have the
tendencies of increased profitability. Alpar and Kim (1990) studied 759 US banks
during 1979-1986 to analyze the impact of IT on economic performance.
Applying cost function approach, they found that IT was able to reduce
operating costs, increase capital expenditures of banks, save personnel costs, reduce

demand deposits, and increase time deposits. Ekata, G.E. (2012), examined
technological change, its relationship to firm size, and its impact on the efficient
scale of output and product mix for large US commercial banks. The results
suggest that technological change lowered real costs by about 1 percent per
year, increased the cost minimizing scale of outputs, and affected product mix.
To study the efficiency and productivity of banks, many researchers used
DEA
model. Das et al., (2000) used DEA approach for all the three types of ownership—
public, private and foreign. Kamakura & Ratchford, (1996) used DEA with translog
cost function to measure efficiency of multiple retail stores. While applying DEA,
different IT related input specifications have been noticed. Some studies used
computer (hardware) as input measure (Oral and Yolalan, 1990; Vassiloglon &
Giokas, 1990) whereas some others have taken Number of ATMs (Zenios et
al.,1999). Choudhari & Tripathy, (2004) used DEA with a lot of variables like
profitability, financial management, growth, productivity, and liquidity. Many other
users of this approach were Mukherjee et al. 2002; Kumar & Verma 2003; Sathye
2003; Gunjan M. Sanjeev; 2006; Gupta et al., 2008; Rezvanian et al., 2008; Awdeh &
Moussawi, 2009; Sunil & Rachita, 2010 etc. Review of studies is indicative of the fact
that the relation of information technology input and performance is a tricky one. It
needs proper metrics or quantification of the two prime variables, the IT and
performance. There are very few studies that quantitatively indexed both the
information technology and the performance of banks. This work is a step ahead to fill


25

this.

Trend of Growth in Earnings and IT useage at TCB
The following section of the study sought to show the trend in growth of

earning for the last three years since the bank adopted IT. The following table 3.7
shows the growth in earnings. Figure 1.2 shows the change in TOI structure at
Techcombank, the percentage of Net Fee income (NFI) have been increasing since
2016.
TCB’s TOI structure showed an obvious shift since 2014 with Non-NII
proportion continuously surging. The proportion of NII reduced but still increased
in value, which means TCB's strategy of diversifying revenue sources through noninterest activities is prioritized, and has achieved impressive results. By the end of
2018, the proportion of Non-NII reached 39.4%, the highest in the banking system.