This dissertation examines the impact of Information Technology and internet banking on the financial performance of Jordan banks. It is an indubitable fact that our world is rapidly changing. The change is occurring in all fields of life from household to wider industrial sectors. Banking and other financial services are also subject to the change. Today, banks are enjoying the benefits of the new information technology by revolutionizing their relation with customers through e-banking. In this paper, an effort is made to examine the impact of IT investment and internet on the financial performance of Jordan banks. Along with this, an argument will be made whether the Jordan banks are successfully converting their IT investments into useful output or not. In the literary review part of this paper, the benefits of e-banking on the Jordan economy will also be discussed because the internet is rapidly killing the distance in the retail banking. Furthermore, the reasons and factors behind the unsuccessful conversion of IT investments into useful output will be noted down while conducting interviews with the selected bank personnel. The data to assess whether the company’s total IT investments are being efficiently utilized to create profits or not will be collected employing financial ratio i.e. Return on IT (ROIT). To obtain the objectives of the research different tools of data collection like the use of questionnaire and interviews with the bankers will be adopted. In addition to this, a brief overview of the current banking structure of the Jordan will also be discussed, for example which banking services are being followed by Jordan banks and why the outdated services are not being replaced by new services like electro banking. For the assessment of the impact of IT investment and internet on the financial performance of Jordan banks, the current tools of IT employed by Jordan banks will also be discussed. The dissertation will conclude by analyzing the collected data on the impact of IT investment and internet on the financial performance of Jordan banks.Following are key objectives of the research:
- To examine the relationship between IT and financial performance by estimating the contribution of IT investment to banks performance measured by financial ratios, in the same year of investment, the second year (one-year lag effect), or the third year of the investment (two-year lag effect).
- Another important objective is to examine the impact of the internet banking on the financial performance of the Jordan banks.
- To examine the effectiveness of banks in converting IT investments into useful outputs.