Impact of technological innovation with products and processes on banking in Myanmar

Impact of technological innovation with products and processes on banking in Myanmar

The developments in the information and communication technology sector have had a significant impact on the banking sectors in many parts of the world including Myanmar. Despite a history of political and economic turbulence in the past, Myanmar's banking sector has been at the forefront in the adoption of modern technologies to facilitate the delivery of banking services. The aim of this study was to determine the impact of technological innovation with products and processes on banking in Myanmar with a focus on profitability, operational efficiency, and customer satisfaction and loyalty among banks in Myanmar. In order to determine the impacts of technological innovations on Myanmar's banking sector, a mixed methods approach was adopted involving a survey of 205 bank customers and in-depth interviews with 8 senior managers of four banks in Myanmar. A structural equation model approach was adopted to assess the impacts of the technological innovations on customer satisfaction and customer loyalty while the thematic analysis of interview data revealed the impacts on profitability and operational efficiency. The findings of this study reveal a strong positive and significant correlation between usage of technological innovations, perceived usefulness of the innovations, perceived service quality, and customer satisfaction and loyalty (p<0.05). Similarly, technological innovations were found to have a positive impact on profitability of banks in Myanmar by increasing the banks’ revenues and reducing the cost of service delivery. Technological innovations were also found to have a beneficial role in boosting operational efficiency of Myanmar banks by improving the quality of service, speed of service delivery, dependability of services, cost savings, economies of scale, employee productivity, improved communication, and compliance with 'know-your-customer' (KYC) practices. Overall, the findings of this study demonstrate a positive role of technological innovations in the performance of banks thus suggesting a need for greater innovation among Myanmar banking institutions.