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Sri Lankan Banks: Gaining a Competitive Advantage with IT Essay Sample

  • Pages: 3
  • Word count: 667
  • Rewriting Possibility: 99% (excellent)
  • Category: bank

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Introduction of TOPIC

Today’s business organizations are information based. The major driving force is IT which increases the usage of information in an around organisations. It also leads to a greater shrinkage of time and distance effects and greater inter relatedness within an industry and organization. Business finds new ways to exploit information technology to be effective. In this endeavour they, in addition to the conventional methods, try to exploit all available communication technologies, computer-aided designs and sophisticated computing technologies, to gain competitive advantage.

Banking is one of the industries, which involve both high information content of the product and high information intensity of process. The nature of the industry implies that it is highly competitive. Therefore, in order to cope up with the rising competition Banks can reflect on the use of IT as a competitive tool. Hence, this study deals with the research question whether Sri Lankan Banks use IT to gain competitive advantage.

The study was carried out in four public quoted commercial Banks in Sri Lanka, namely Bank A, Bank B, Bank C and Bank D. The answer to the research question was given by research findings. Two banks namely A and C use IT to gain competitive advantage, while Bank B and D do not use IT efficiently to gain competitive advantage. Some branches are not equipped with ATM facilities and IT related services hav

e to develop to compete with other banks. In bank A and C profitability is higher than bank B and D.

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According to the second objective of the research usage of IT increases the profitability. Further, IT related services such as Internet banking and Credit card have brought the competitive advantage to these banks as a whole. Almost all the banks provide better ATM services, Tele-banking and Money transfer to the customers. Hence they have to develop Internet banking and make it convenience to use the Credit card.

The study too revealed that a Sri Lankan banking customer (potential) considers stability, reliability, accessibility/convenience, service factor, pricing, capable employees/staff, safety of money, and banking image when selecting their banking partner. They too expect different kind of quality in IT related services. This was evidenced by the choice of the bank, based on preferences. Competitor attractiveness and poor quality service had lead to a change in the customer base of certain banks. Therefore the strategic use of IT plays a vital role in retaining existing customers and attracting new customers.

The information age is also changing the face of banking. In keeping with the customer demands and competitiveness, banks have no option but to keep up with the most modern changes in technology. All the banks in the sample compete with each other to provide better services, since a good customer service is vital in developing a loyal customer base. In order to stay ahead of their competitors these banks focused on differentiation rather than cost leadership. By differentiating their services they are able to lock in the customer, and thereby reduce bargaining power of customer. In relation to entry barriers, other than huge investment they are unable to prevent new entrants in the market. Hence, it can be concluded that the Sri Lankan Banks have to give further thought to gain competitive advantage through IT.


Arif, A. A.,& Mammu, M. A. (1997). “Exploitation of information technology for competitive advantage”:An experience of ready-made Garment Industry, South Asian Journal of Management, Apr-Jun 31-41

Arun Kumar Jain, “competitive excellence, critical success factors”, Vikas publishing house pvt ltd

Bradmore, D. (1996). “Competitive advantage: concepts & cases”. Prentice Hall of Australia

Clemons, E. K., & Weber, B. W. (1996). Special section: “Strategic and competitive information system”. Journal of Management information system, Vol.13, No.2, ( 5-8)

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