The Role of New Economy Indicators on Banking Sector Performance in Ghana: Trend and Empirical Research Analysis of Banks’ Clients and Experts Perception

Seniha Alev Söylemez¹ and Abdul-Hamid Ahmed^2,

¹Economics Department, Ankara Haci Bayram Veli University, Ankara, Turkey

²International Economics Department, Gazi University, Ankara, Turkey

Cite this paper:
Seniha Alev Söylemez and Abdul-Hamid Ahmed. The Role of New Economy Indicators on Banking Sector Performance in Ghana: Trend and Empirical Research Analysis of Banks’ Clients and Experts Perception. Journal of Finance and Economics. 2019; 7(1):23-35. doi: 10.12691/jfe-7-1-3

Abstract

The revolution of the new economy is contemporaneous with an improvement in the financial sectors all over the world, while financial innovations make the sector more productive. The banking sector plays an important role in supporting economic growth especially in allocating funds from savers to borrowers. The productivity level of the banking system is of great importance for the whole economy to operate more effectively. Electronic banking has been the center-stage of modern banking with enormous benefits. From this point of view, this research paper contains an effort to critically examine the activities of the banks and make concrete suggestions in the new economy process also at the same time called the information economy, the network economy and the computer age. The research employed a research questionnaire from a survey that sought to seek opinion from customers and experts regarding the banking sector and the new economy in Ghana. Within the scope of the survey, bankers and customers from ADB, GCB, Fidelity Bank, Access Bank and Bonzali Rural Bank, as well as experts from the banking industry and entrepreneurs were interviewed. The findings of the study shows that in the adoption of the new economy in the banking sector, many challenges such as high charges, e-crime and fraud are of great importance. To deal with the challenges of adopting e-banking services, the research paper recommend that the universal banks or commercial banks should undertake rigorous internal control measures to reduce the high charges so as to establish a judicial banking system and also the bank of Ghana should develop a robust regulatory framework to avoid cyber risk and Ponzi banking schemes. Auditing fraud and forensic banking programs will also contribute immensely to macroeconomic stability. After all, even though such difficulties persist, customers and experts mainly use new economy products such as mobile banking, internet banking, and ATM service for ultimate purpose of withdrawing cash, checking account balance and bank statement request. In view of this, the new economy appears to have positively affected the banking sector's activities in Ghana, and the banks are beginning to equip their operations with the latest technology.

Keywords:
new economy indicators banking sector performance Ghana

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]	Investing Answers. “New Economy” Financial Dictionary Retrieved from https://investinganswers.com/financial-dictionary/economics/new-economy-546.
[2]	J. Abor. Technological Innovations and Banking in Ghana: An Evaluation of Customers' Perceptions. Legon: University of Ghana, 2004.
[3]	F. A. Eshun. The role Telecommunication on banking services in Ghana. https://publications.theseus.fi/bitstream/handle/10024/4513/Abeku_Edited_Thesis.pdf?sequence, 2009.
[4]	W. D Nordhaus. Technology, Economic Growth and the New Economy, Yale Univerisity, 13th June, 2000.
[5]	S. A. Söylemez Yeni Ekonomi, Boyut Kitaplari, Boyut Matbaacilik ve Boyut Yayin Grubu ISBN 975-521-430-5 PP 21-23, 2001.
[6]	O.Kwabena., K. Roderick, and O. K. Kwame. The Role of Information on Banking Service Delivery: A Perspective from customers in Ghana, International Journal of Innovative Research in Management, 2 (6): ISSN 2319-6912, 2013.
[7]	M. Piatkowski. The Economic and Institutional Determinants of the New Economy in Transition Economics, Aeta Oeconomica, 53 (1): 1-27, 2003.
[8]	Saunders, Lewis, and Thornhill .Research for Business Students.Pearson-Prenticehall. London, 2009.
[9]	O. O. Vincent and B. K Gemechu, Determinants of Financial Performance of Commercial Banks in Kenya, International Journal of Economics and Financial Issues, 3(1): 237-252, 2013. ISSN: 2146-4138.
[10]	Beck, T. A. Demirgue, and Rose Lenine. A new Database on the Structure and Development of Financial Sector, World Bank Economic Review, 14(3): 597-605, 1999.
[11]	S.K. Dangolania. The impact of Information Technology in Banking System: A case study in Bank of Keshavarzi, Iran, 30: 13-16, 2011.
[12]	S. Blili. & L. Raymond. Information technology: Threats and opportunities for small and medium-sized enterprises”, International Journal of Information Management. 13(6), 439-448, 1993.
[13]	A. A. Agboola. Impact of Electronic Banking on Customer Services in Lagos, Nigeria” in Ife Journal of Economics and Finance. Department of Economics, O.A.U, Ile-Ife, Nigeria, 5 (1&2), 2001.
[14]	L. G. Tornatzky; R. J. Klein. Innovation characteristics and innovation adoption implementation: A meta-analysis of findings, IEEE Transactions on Engineering Management, EM-29: 28-45, 1982.
[15]	Two Decades Later, is the “New Economy” Finally Here? [Internet]. Harvard Business School, Business Research for Business Leaders. 2018 [cited 2018 Nov 23]. p. 1. Available from: https://hbswk.hbs.edu/item/two-decades-later-is-the-new-economy-finally-here
[16]	Lau LJ, Li K-T. The Impact of the New Economy on Developing Countries [Internet]. Stanford University; 2000 [cited 2018 Nov 23]. Available from: https://web.stanford.edu/~ljlau/Presentations/Presentations/NBS.PDF.
[17]	Pohjola M. The New Economy: facts, impacts and policies. Inf Econ Policy [Internet]. 2002 Jun 1 [cited 2018 Nov 23]; 14(2): 133-44.
[18]	Shapiro AH, Wilson DJ. What’s in the News? A New Economic Indicator [Internet]. 2017 [cited 2018 Nov 23]. Available from: https://www.frbsf.org/economic-research/files/el2017-10.pdf.
[19]	Nanclares NH, Lera López F. The So Called New Economy and the ICT: Concept and Measurement**. In: Global Consequences of the Information Technology [Internet]. London; 2000 [cited 2018 Nov 23]. p. 1-16.
[20]	Atkinson RD, John Wu J. The Center for Data Innovation | Open Data In the G8 0 [Internet]. 2017 [cited 2018 Nov 23]. Available from: www.itif.org.
[21]	Bank of Ghana, Banking Sector Report P a g e | i [Internet]. 2018 [cited 2018 Nov 23]. Available from: https://www.bog.gov.gh/privatecontent/MPC_Press_Releases/Banking_Sector_Report_May_2018.pdf.
[22]	Owusu-Antwi G, Mensah, Lord, Crabbe M, Antwi J. Determinants of Bank Performance in Ghana, the Economic Value Added (EVA) Approach. Int J Econ Financ [Internet]. 2014; 7(1). Available from: http://www.ccsenet.org/journal/index.php/ijef/article/view/29698.