Does Technology Lead to Better Financial Performance? A Study of Indian Commercial Banks

It has been a matter of debate whether Technology provides better financial results and improves productivity. The present paper attempts to study the inter-group comparison of financial performance of Indianbanks by classifying the banks on the basis of usage of Technology. Further,for the purpose of temporal comparison, the period for the studyhas been divided into two parts, i. e. low technology induction periodand high technology induction period. Findings of the paper show thatthe fully IT oriented banks are financially better off than the partiallyIT oriented banks. Moreover, the performance of almost all the banksunder study has tremendously improved in the high technology inductionperiod. However, for the Indian banking industry, the correlationbetween Technology induction and financial productivity is negativethough statistically insignificant and low.